Changing Shape of Employment Law
By Alex Lock
Posted: 9th May 2016 09:40Employment law is where politics meets economics meets social policy. Every political party has a policy on employment law and every government since the 1970s at least has managed to tinker with legislation, if not stamp its mark on the employment law landscape. The last 20 years saw a huge expansion of rights and entitlements under the New Labour government, through to their curtailment under the Coalition. This is reflective of the approach that governments have taken, with a swinging pendulum moving towards – and then away from – perceptions of what should be done to protect workers and what business needs as an environment in which to thrive.
This context means that the employment law framework can change incredibly quickly and assertions about what the law is quickly become out-of-date. For example, within the course of just two years, employees wishing to challenge a dismissal as being unfair found that the service qualification had doubled from one to two years; compensation was restricted to one year’s pay; an early conciliation certificate needed to be obtained from Acas before a claim could be submitted; and fees of £1,200 would need to be paid as a condition of the claim proceedings. And that was before one grappled with re-written rules of procedure and case management. In those circumstances, the fact that employment tribunal claims against employers dropped from around 200,000 each year to 50,000 is not surprising.
Employment law is not, however, all about dispute and challenge. There are over 30 million work relationships in the UK. Whether the number of claims is 50,000 or 200,000, the difference is somewhere between 0.16 and 0.6% of working relationships ending in a formal dispute and employment tribunal proceedings.
The next 12 months will undoubtedly bring challenges to employers on a number of fronts. It is likely the thorny issue of pay will move to centre-stage. Some may find this odd: given its fundamental position at the heart of the employment relationship, one might question whether there is much more to be said on the issue. The introduction of the National Living Wage, however, will likely mean that employers will need to review their pay structure and reward/incentive programme. This significant change at the bottom of the pay scale is likely to mean knock-on effects further up the ladder in order to preserve status and differentials. The issue is already becoming politicised, with the government asking to be told about employers cutting employee benefits elsewhere in order to fund this change.
Gender pay reporting is being introduced. Employers will need to start taking advice and reviewing pay data across their organisation(s) and then learn about how and when they will need to report on pay differences by reference to gender. One assumes that the government believes the “disinfectant” of transparency will highlight significant differences in a very public way, forcing employers to make changes on a voluntary basis.
Much of the hospitality and catering industry relies upon service charges, tipping and gratuities to supplement or fund pay for staff. It is estimated there are over a quarter of a millions waiters and waitresses in the UK. Much publicity was generated in 2015 over the policies of a number of restaurant chains in respect of tipping, service charges, deductions and table fees. The government has responded to this by starting a consultation on changes to ensure greater transparency and ensuring tips left for staff reach them. A new voluntary code is certain and legislation likely.
The question of Britain’s continued membership of the European Union will be resolved in 2016 but the employment law issues that flow from it will not. Much of the UK’s employment protection legislation is derived from EU law, so at first blush a vote to leave the EU would call much of this legislation’s future existence into question. Many commentators, however, have indicated that this legislation is more bound up with the UK’s entry into the Single European Market, rather than its membership of the EU, so will remain in any event.
Those are political questions to debate and answer but, for employers, a vote to leave the EU will trigger a two-year notice period, meaning nothing will change quickly as a consequence, although there may be quite profound changes following that.
If the UK votes to remain part of the EU, there are still significant discussions to be had and changes to follow. New data protection legislation will have a significant impact on how employers collect, store and use data in relation to employees. The Trade Secrets Directive will provide increased protection for companies in relation to their confidential information, but may restrict or even give an added layer of technicality to what is already complex legislation in respect of protected disclosures - otherwise known as whistleblowing.
That most debated and complex legislation, the Working Time Directive – covering, as it does, everything from paid annual leave to rest breaks - is due for a review and the UK’s opt-out from various of its provisions will come under rigorous scrutiny from the European Parliament and the UK’s trading partners. This may herald significant changes for employers, including a requirement to limit the number of hours worked in a week, with no exceptions.
For most employers, their workforce remains their most significant asset, their greatest cost, their means of return and their biggest liability. Employment law will continue to evolve at a fast pace and it remains vital for employers to be expertly advised and remain one step ahead of the politicians.
Alex has provided specialist employment advice and guidance on all aspects of employment law to public and private sector employers for more than 15 years.
He has considerable experience of Employment Tribunal and Employment Appeal Tribunal work on behalf of major companies, both preparing cases and regularly appearing as an advocate.
He is well known for his expertise on TUPE, especially its application to outsourcing of services. He has spoken at seminars, on the radio and television and has contributed articles on employment law to several journals.
Alex is a member of the Employment & Pensions Group Employee Relations Unit providing thought-leadership on employers' relations with trade unions and employees.
Alex Lock remains a standout employment practitioner, noted for his extensive experience of contentious employment matters. Clients are forthcoming in their praise of his practice: "Straightforward and honest - he tells it like it is, including what the potential pitfalls are, and where I can take risks. He has got to know my style of work. He also knows how to nicely slaughter the opposition in a tribunal - it's impressive!"
Chambers and Partners UK 2015 Edition, Employment