What's next for UK employment law?

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In this time of flux, as we await the trigger of Article 50 and the results of negotiations between the UK and the EU, it is extremely difficult to predict what's next for UK employment law. As we have previously commented, the extent to which UK employment law may change in light of Brexit is very much dependent on the relationship that the UK and the EU forge going forward. What we can say with some certainty, however, is that, in the short term, we are unlikely to see any major changes to UK employment law, directly resulting from Brexit.

Any changes to UK employment legislation are in fact likely to be driven by the political agenda, in other words which party is in government over the coming years.

What we do know is that, unless new Prime Minister Theresa May decides to call an early election, we are likely to have a Conservative government until at least May 2020. Whilst employment issues haven't been at the forefront of the Conservative agenda in the way that they have been for the Labour Party, May has already vowed to put worker representatives on boards of major companies and to impose stricter limits on executive pay.

Workers are already represented on boards in companies in many European countries, including Germany, Denmark and Sweden. It is hoped that, by having worker representation amongst the executive team, boards will move towards prioritising long-term decision-making, over short-term financial gain. May has not as yet set out any practical steps for implementing these plans but they have received the seal of approval from the Trades Union Congress.

In line with a number of the other changes to financial markets regulation in particular, May has outlined plans to give shareholders stronger powers to block remuneration packages, making votes binding rather than merely advisory.

So what are the opposition saying? Candidate for Leader of the Labour Party Owen Smith recently set out a Manifesto for Fairness at Work, including 25 pledges. These include, amongst other things, reintroducing wages counsels for those in the hospitality, retail and social care sectors; strengthening collective bargaining; improving collective trade union rights and repealing the Trade Union Act 2016; reintroducing "day one" unfair dismissal rights; abolishing zero hours contracts; enhancing the definition of "worker" to "outlaw bogus self-employment, strengthen rights and address agency labour issues"; and ensuring worker representation on all remuneration committees.

Current Leader of the Labour Party Jeremy Corbyn has not set out his employment-related plans is as much detail as Smith, but he has clearly stated that he would introduce legislation making it mandatory for all employers with over 250 employees to bargain collectively with recognised trade unions. His proposal has been compared to the French-style framework of union rights. Corbyn has explained that he sees this as the best way to guarantee fair pay and terms and conditions of work.

Like Smith, Corbyn also proposes the abolition of zero hours contracts, instead requiring all contracts to contain guaranteed minimum working hours. Corbyn has suggested that, where an employer wants employees to work beyond those hours in some circumstances, it will have to give reasonable compensation to the employees, akin to an "on-call" payment, for agreeing to make themselves available for additional work, whether they are ultimately asked to do so or not.

What is clear is that the political parties generally have very different agendas when it comes to UK employment law and workers' rights. However, there does seem to be some consensus that there needs to be a better system of checks and balances when it comes to executive pay.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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