2017 Employment Law Election Special

Martin Stephen

Published by
Martin Stephen

5th June 2017

Welcome to this month's 2017 Election Employment Law bulletin.

If you have any questions about any of the topics covered or would like to meet with our Employment team please call Martin Stephen on 0141 248 3434 or email mss@wjm.co.uk

2017 Election, Parties' Stance on Employment Issues

Immigration and Brexit

The Conservatives have said they will stick by pledges made in David Cameron’s 2010 manifesto to cut net migration to “tens of thousands” – latest figures from the Office for National Statistics show the current level to be 273,000. The Tories would double the immigration skills charge levied on companies employing migrant workers to £2000 by 2022. The Party would also enact the Great Repeal Bill, which converts EU law into UK law, meaning existing workers’ rights would continue to be available in UK law at the point at which we leave the EU.

UKIP want to cut net migration levels to zero within five years, by asking skilled workers and students to get visas and banning migration into the UK for unskilled and low-skilled workers.

Labour has promised to legislate to ensure that employers recruiting workers from abroad do not undercut workers at home. Mr Corbyn has said he would replace the Great Repeal Bill with a EU Rights and Protections Bill, which would safeguard workers’ rights handed down from the EU.

Liberal leader Tim Farron has pledged to “unilaterally guarantee the rights of EU nationals in the UK, ending their ongoing uncertainty”, as well as secure the same rights for UK citizens living in EU countries. This  would also protect rights enshrined in EU law, such as 52 weeks’ shared parental leave.

The SNP has said it would retain control over immigration and fight to stay in the single market.

Diversity and inclusion

Both the Conservatives and the Liberal Democrats would extend current pay gap reporting requirements if they got into power; larger employers would be obliged to publish a “race pay gap” as well as  a gender pay gap. The Liberal Democrats are also considering whether employers should publish data on sexual orientation, employment levels and the gap between the highest and lowest paid. The Conservatives would aim to get one million more people with disabilities into employment over the next decade, providing employers the support needed to hire and retain those with disabilities. The Conservatives would also look into ways to make civil service recruitment more diverse, in terms of gender, race and social class.

The Liberal Democrats have vowed to bring an extra one million women into the workforce by 2025, and to introduce name blind recruitment into the civil service.

Labour would introduce a civil enforcement system to ensure compliance with gender pay gap reporting.

Taxes and pensions

The personal income tax allowance would be increased to £12,500 under a Tory government, with the higher tax rate starting at £50,000. After abandoning proposals to increase national insurance contributions for the self-employed, Chancellor Philip Hammond has not ruled out future rises in the next Parliament.

Shadow chancellor John McDonnell said his Party would lower the threshold for the 45p additional rate to £80,000 from its current level of £150,000.It would also reintroduce the 50p rate of income tax on earnings above £123,000. Scotland would not be affected as it has devolved powers in respect of income tax rates.

The Liberal Democrats have proposed a 1% rise in income tax which they say would enable them to ringfence an extra £6 billion of funding per year for the NHS.

SNP First Minister Nicola Sturgeon has confirmed in her party’s manifesto that she would raise the top rate of income tax for those earning more than £150,000 from 45% to 50%. She has also promised there would be no tax or national insurance rises for the lower paid.

Labour, the Liberal Democrats and the SNP have vowed to protect the “triple lock” on state pensions, which will ensure that state pensions rise in line with wages, inflation, or by 2.5% – whichever is highest. The Conservatives' promise is for a "double lock" - rises in line with the higher of wages or inflation.  Labour has also said it would amend company takeover rules to protect employees’ pensions.

Wages and holidays

The Conservative Party has confirmed that the national living wage will rise “in line with average earnings by 2022”. Its commitment to this rate increasing to 60% of median hourly earnings by 2020 (around £8.75) remains.

The Labour Party has promised to increase the national living wage to “at least” £10 per hour by 2020. Its manifesto confirms that this would apply to all workers aged 18 and over, not just those aged 25 and over, as it is for the current national living wage.

The SNP’s manifesto includes a pledge to make the minimum wage £10 an hour by the end of parliament.

The Green Party would also ”make the minimum wage a living wage for all”, aiming for it to be £10 an hour by 2020 and Plaid Cymru has pledged to introduce a “real, independently verified Living Wage”. The Green Party has also said it would move towards a four-day working week.

Labour would introduce four new public holidays – bringing England, Wales, Scotland and Northern Ireland together to mark all four national patron saints’ days. These will be additional to statutory holiday entitlement so that “workers in Britain get the same proper breaks as in other countries”.

Both Labour and the Liberal Democrats have pledged to end the 1% pay cap on public-sector pay and ensure these workers receive pay rises in line with inflation.

The Labour Party would introduce an “excessive pay levy” on salaries above £330,000. The measure would mean that companies paying staff more than this figure will pay a 2.5% surcharge, while salaries above £500,000 will be charged at 5%. Under Labour, there would also be a maximum pay ratio in public sector organisations of 20:1. This means if the lowest salary was £18,200 (£10 per hour, 35 hours per week), the highest possible salary would be £364,000. This rule would also apply to private sector companies bidding for public sector contracts.

Workers’ rights

Theresa May has claimed that her Party will deliver the biggest expansion of workers’ rights by any Conservative Government. This includes a statutory right to a year’s unpaid leave to care for a relative, measures to protect employees’ pensions, and a guarantee that workers’ current rights will remain unchanged through the Brexit process. The Prime Minister also reiterated her Budget pledge of worker representation on boards for listed companies, although there will not be a requirement for a specific worker representative on the board – this “voice” can be achieved through an advisory panel or a non-executive director whose remit it is to monitor employees’ concerns.

Labour’s manifesto boasts a 20-point plan which it believes will end the “rigged economy” in the workplace. This includes a pledge to scrap employment tribunal fees, giving all workers (whether permanent, temporary, full- or part-time) equal rights from day one, and a ban on zero hours contracts and unpaid internships. It has also promised to repeal the Trade Union Act 2016. Labour would “extend the rights of employees to all workers”, effectively scrapping the employment status of “worker” – umbrella companies would be banned. Labour has also said it would review redundancy arrangements, potentially increasing statutory redundancy pay.

The Liberal Democrat manifesto indicates that the Party would scrap tribunal fees, and would stop abuse of zero hours contracts, giving workers the right to ask for a fixed contract after a certain period. It suggests it would advocate a German-style, two-tier system on company boards to encourage greater representation of workers.

Childcare, parental leave and employee wellbeing

Labour and the Liberal Democrats have both pledged to extend paid paternity to a month, to encourage greater sharing of parental responsibilities. Labour has also indicated it would increase the rate from its current level of £140.98 per week.

The Conservatives have pledged to give workers a statutory right to a year’s unpaid leave to care for a relative. The Party has also said it would grant a two-week period of paid leave for parents whose child has died. It claims it will improve the take-up of shared parental leave and help companies to offer more flexible working environments.

Labour would consult on the introduction of statutory bereavement leave.

Theresa May’s government plans to remove the requirement for employees to have suffered from a mental health condition for at least 12 months before they gain protection under the Equality Act.

The Scottish National Party will expand free childcare to cover 1,140 hours per year by 2022, which equates to around 25 hours per working week.

Under a Liberal Democrat government, flexible working and shared parental leave would become ‘day one’ rights. Access to Work, the programme aimed at getting those with disabilities back into work, would also be extended under a Liberal Democrat government.


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Politicians silent on Employment Tribunal Fees

The imposition of  Tribunal fees has greatly reduced the number of tribunals taking place across the UK. While this has achieved its goal of reducing the burden on the system, many argue that this has resulted in a reduced access to justice. Interestingly, as political tensions rise with the upcoming election, the political parties have been notably silent on this issue.

The coalition government introduced fees for bringing claims in the Employment Tribunal system, and this reduced the claims by around 70%. Had the government at the time reduced employment rights by 70% there would have been public outcry. However the Employment Tribunal fee system has achieved much the same effect, and has flown under the radar this election campaign.

The Employment Lawyers Association has reached a general consensus that this feeing structure is presenting unacceptable barriers to justice. However, while politicians of all colours are quick to state their support for employment rights, it seems they are not serious about the rights of workers if they do not stand for access to justice for all workers.

It will be interesting to see in the coming weeks if the issue is mentioned at all by our prospective parliamentary representatives.


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Liberal Democrats and Labour pledge to increase paid paternity leave to at least a month

Both Labour and the Lib Dems have pledged that men should be entitled to at least a month of paid paternity leave. The Lib Dem former East Dumbartonshire MP Jo Swinson stated that “Parents across the UK have already benefitted from greater flexibility and freedom in how they share the care for their new baby. But more needs to be done in order to encourage men to take leave when they become a dad, to bond with their child during the early weeks and months of their life".  The Lib Dems have stated that they want to give dads across the country the chance to spend more time with their children.

Labour has long been in favour of an increase in paid paternity leave. Ed Miliband’s 2015 manifesto included a pledge to increase the amount of paid from £140 to more than £260 a week.

The policy of shared parental leave was introduced two years ago and gives parents the right to divide up to 52 weeks between them, as well as up to 39 weeks of statutory shared parental pay. However, the government has estimated that only 2% to 8% of 285,000 eligible working fathers take advantage of shared parental leave.


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Calculating Strike Pay for Teachers

Stepping away from the election, in Hartley v King Edward VI College the Supreme Court has ruled that if teachers lawfully strike for one day, an employer can make a deduction at 1/365 of annual pay. The Supreme Court unanimously held that unless the contract specifically states otherwise any deduction of pay in relation to teachers taking lawful strike action must be at a rate of 1/365 of their annual pay and not 1/260 as the College had done.

The Supreme Court ruling overturned the Court of Appeal decision. They looked closely at the wording of the Apportionment Act 1870 which was intended to address the problems which arise in the context of periodic payments. The Act provides that salaries shall be “considered as accruing from day to day and shall be apportionable in respect of time accordingly”.

It is worth bearing in mind that this is a fact specific decision that is applicable to teachers. However the principle may be applicable to other employees whose days of work are not ascertainable.


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Discrimination and Adjustments for Candidate with Asperger’s Syndrome

The Employment Tribunal issued its decision recently in The Government Legal Service v Brookes. The Government Legal Service was recruiting lawyers in what was called by the Tribunal a “fiendishly competitive recruitment process”. Ms Brooks asked the Government Legal Service for an adjustments on the ground of her Asperger’s Syndrome. She was informed that alternative arrangements and adjustments were not available and she failed. She claimed disability discrimination.

The Employment Tribunal concluded that this particular test put people with disabilities such as Asperger’s at a particular disadvantage.

Further the Employment Tribunal found that while the test had a particular aim, the means of obtaining it were not proportionate and therefore the claim of indirect discrimination succeeded.

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The WJM Employers’ On-line Manual

Many of our readers already subscribe to our on-line manual and find it an extremely helpful tool. It covers Pre-employment, Managing Employment  and Termination and is intended to assist those responsible for HR in their day to day tasks. It contains an extensive documents library packed with forms and precedents as well as a comprehensive section entitled What the Law Says.

This is available to all of our readers and if you would like free no obligation access on a trial basis please contact Emma McNeil (emc@wjm.co.uk).

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The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at June 2017. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 302 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.