Queen’s Speech 2015: what can employers expect? | Practical Law

Queen’s Speech 2015: what can employers expect? | Practical Law

Many of the new government’s proposals had been signposted in the Conservative party’s general election manifesto and were indeed confirmed as issues that it intends to pursue during 2015 and 2016. But aside from revised income tax thresholds and changes that payroll teams will need to get to grips with, the Queen’s Speech revealed several other proposals for the forthcoming Parliament that will affect employers.

Queen’s Speech 2015: what can employers expect?

Practical Law UK Articles 2-616-6205 (Approx. 4 pages)

Queen’s Speech 2015: what can employers expect?

by Naeema Choudry, Eversheds LLP
Published on 25 Jun 2015
Many of the new government’s proposals had been signposted in the Conservative party’s general election manifesto and were indeed confirmed as issues that it intends to pursue during 2015 and 2016. But aside from revised income tax thresholds and changes that payroll teams will need to get to grips with, the Queen’s Speech revealed several other proposals for the forthcoming Parliament that will affect employers.
The first Queen's Speech following the 2015 general election was particularly keenly awaited as it promised some significant reforms, including headline issues such as replacing the Human Rights Act 1998 (1998 Act) and a referendum on whether the UK remains in the EU.
Many of the new government's proposals had been signposted in the Conservative party's general election manifesto and were indeed confirmed as issues that it intends to pursue during 2015 and 2016. But aside from revised income tax thresholds and changes that payroll teams will need to get to grips with, the Queen's Speech revealed several other proposals for the forthcoming Parliament that will affect employers.

British Bill of Rights

Despite some speculation that the government had had a last-minute change of heart over scrapping the 1998 Act in favour of a new British Bill of Rights, the issue remains on the government's agenda, although it was not raised in the Queen's Speech itself.
The proposal would curtail the powers of the European Court of Human Rights and clarify the rights under the European Convention on Human Rights (the Convention). The timescale for this proposal is uncertain and is likely to await consultation. As and when it goes ahead, the impact will be limited if the UK stays in the EU because being a signatory to the Convention remains a pre-requisite for EU membership. Even then, the primary effects for employers are likely only to arise in certain areas, such as privacy, discrimination and trade union issues. However, there are many obstacles to overcome to put this proposal into effect.

Referendum on EU membership

The prospect of a referendum on whether the UK is to remain within the EU was a significant feature of the general election campaign. Because there is no pre-existing legislative mechanism for a referendum, a specific Act of Parliament is needed in order to bring that prospect to reality. As anticipated, within a week of confirming that it would produce legislation to that effect, the government had published the EU Referendum Bill 2015-16 (www.publications.parliament.uk/pa/bills/cbill/2015-2016/0002/16002.pdf).
The proposed timeframe for a referendum is by end of 2017. However, there is already speculation that both government and businesses would prefer a conclusion on the issue before 2017.
Inevitably, thought is already being given to the potential impact for UK businesses of a withdrawal from the EU. Commercially, the implications are uncertain but, even if the UK were to withdraw, it is inconceivable that it would give rise to significant changes to current laws in the short to medium term. Instead, one can anticipate a gradual divergence of laws as between the UK and the EU through case law and future legislation (see News brief "The possible Brexit: an uncertain path").
However, the fundamental protection mechanisms for both employers and employees would no doubt remain. Possible exceptions for employers might be certain aspects of the Working Time Regulations 1998 (SI 1998/1833), the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) and the Agency Workers Regulations 2010 (SI 2010/93).

Reforms for trade unions

Among the most prominent legal issues in the Queen's Speech were proposed changes to strike and trade union laws. Legislation will be drafted to ensure that strikes should only result from a ballot in which at least half the workforce has voted. In addition, the government is likely to seek to introduce tougher thresholds in respect of strikes by workers in essential public services, such as health, education, fire and transport. In those sectors, proposed amendments to existing legislation would require the support of at least 40% of all those entitled to take part in the ballot, as well as a majority of those who actually turn out to vote, before a strike is considered legal.
Although not specified in the Queen's Speech, additional changes expected in this context include the removal of restrictions on the use of agency workers to provide essential cover during strikes, the introduction of a time limit on the validity of a strike ballot and changes to trade union subscription processes.
While, in the future, trade unions will require a clear mandate before balloting for strike, it is also vital that employers maintain a constructive dialogue with unions if they are to avoid alternative forms of protest.

Cutting red tape and creating jobs

The government recognises that a significant reduction in red tape and bureaucracy for employers will be needed in order to achieve its ambitious plans to create two million jobs and three million apprenticeships over the course of the Parliament.
It seems likely that the principal vehicle to reducing levels of bureaucracy will be a new Enterprise Bill that will aim to reduce the cost of red tape by £10 billion through a continuation of the former government's Red Tape Challenge and so-called "one in-two out" rule. Where these changes will arise is currently unknown but, previously, these projects have led to various changes for employers; the most recent employment law examples include the removal of third-party harassment claims and discrimination questionnaires.
It seems likely also that the Enterprise Bill, when it emerges, will introduce the improved business rates system before the 2017 revaluation and create a small business conciliation service to handle business-to-business disputes without the need for court action, tackling late payment issues in particular. In addition, it seems likely that the Enterprise Bill will curb public sector exit payments and the freedom of departing public sector workers to return to the public sector following paid exit.
In reality, however, the various proposed reforms and incentives will need to work in combination if employers are to be in a position to recruit and offer sufficient training opportunities. A freeze on rates of income tax, National Insurance contributions and VAT for five years should assist businesses in achieving this goal. Extended childcare support should also increase the flexibility of working parents, with pilot programmes for the tax-free provision of 30 hours of childcare per week due to start later in 2015.

Immigration

The Queen's Speech also proposed further measures to control immigration. An Immigration Bill is expected to include a new offence preventing business and recruitment agencies from recruiting abroad without first advertising the position in the UK and to improve the enforcement of immigration laws. In addition, it is proposed that illegal working will become a criminal offence, which will allow the pay of illegal workers to be seized as the proceeds of crime.

Devolution

There was confirmation in the Queen's Speech of forthcoming legislation to increase or clarify devolved powers to Scotland and Wales. This will affect businesses either based, or operating, in those locations. Reference to the City Devolution Bill could also prove significant in due course. Increasingly, more powers are to be devolved to English cities, starting with Greater Manchester. Employers in those regions, particularly those involved in transport, planning and policing, may start to encounter future regional policy differences and practices.
Naeema Choudry is a partner at Eversheds LLP.