Employment Nuggets

What would happen if Britain opted out of key European employment legislation?

Britain will soon vote on whether or not to leave the European Union (EU), with employment law one of the main issues up for debate as part of the upcoming referendum.

David Cameron has pledged to renegotiate Britain's inclusion in the EU but has also promised to let the British public have their say. A British exit from the EU - or a Brexit - is therefore a real possibility in the near future.

Cameron's employment law plans

Employment law is at the heart of Cameron's promise to renegotiate Britain's position in Europe. Although the government is yet to confirm it, the agency workers' directive and the working time directive are among the employment laws Cameron is believed to want to opt-out from. So far Downing Street will only say: "This is just more of the speculation we said there would be during the negotiation."

The agency workers' directive means that temporary workers are entitled to basic employment rights including the national minimum wage, as well as being given paid annual leave. Adoption of the working time directive was one of the most controversial employment law changes when it was introduced in 2003. This law means employees should not be made to work over 48 hours a week on average unless they choose to. However, many employers are against the working time directive and the agency workers' directive as it reduces their ability to have a flexible workforce.

EU referendum

Should Cameron be successful in renegotiating Britain's position in the EU and secure the right to opt-out of both the working time directive and the agency workers' directive, this would lead to one of the largest employment law shake-ups in the UK in many years. But if Britain does vote to leave the EU in the upcoming referendum - which Cameron has promised will be held by the end of 2017 - this could lead to even more drastic changes to employment law being made by the government.

At present, Britain appears to be in favour of remaining in the EU, but with many months to go before the referendum, this could quickly change as the yes and no campaigns crank up. It is clear that employment law is likely to change in the UK whatever the result of the referendum, but right now it is impossible to predict exactly what will happen as a result of the vote.

Closing the Gender Pay Gap

Closing the Pay Gap

Issue

Women on average still earn 19.1 percent less than men. This means that a woman on average earns around 80p for every £1 earned by a man. Despite efforts over the years to close this pay gap, it still remains.

What has happened?

David Cameron has announced that next year the government will be making every single company with 250 employees or more publish the gap between average female earnings and average male earnings.

Is this a good thing?

The government believes that this announcement will cast light on discrepancies and in effect create pressure on companies to perhaps reconsider their approach and this should in turn drive women’s wages up.

The CBI on the other hand are not convinced and warned that forcing companies to publish their pay gap could be misleading and still prefers a voluntary approach. It has however confirmed that it will work with the government on this issue.

What next?

A consultation will be launched on exactly what information should be published, as well as where and how often.

Comment

The government is keen to tackle what it sees as some of the root causes of the gender pay gap because any company that pays a woman less for equal work would already be acting illegally.

Some will no doubt see this decision as just an example of the Conservatives taking one of Labour’s policy ideas and pushing it forwards. It was acting Labour leader Harriet Harman who initially included powers for the government to force companies to reveal their gender pay gap in the Equalities Act 2010. These particular provisions were never enacted and a voluntary approach was preferred. This voluntary approach resulted in just five companies publishing the gender pay gap of their own accord.

This announcement has also been made at the same time as new figures have revealed that the FTSE 100 has met the target of ensuring that a quarter of all board members are women.

 

What is the impact of the new living wage?

Issue

Last week the government announced that the national minimum wage will raise from £6.50 per hour to a new rate of £7.20 by 2016 and £9 by 2020. Obviously businesses will be looking at the potential impact of this on their profit margins, especially when they are already coming to terms with the impact of auto enrolment.

What has happened?

A recent analysis has suggested that this increase in basic pay will be "credit negative" for retailers, restaurants, hotel and leisure companies because of the cost of increasing the pay of thousands of workers. Staff account for roughly half of a retailer's costs and large companies will face a huge increase in their wage bill to meet this reform.

What might happen?

What we might all see is retailers passing on the higher salary costs to its customers by raising prices and/or slashing employee benefits to account for their increased salary bill. 

Drop in tribunal claims

The government is about to start a review of tribunal fees but statistics published yesterday by the Ministry of Justice have confirmed that there is a continued drop in the number of single tribunal claims lodged since the fees regime was introduced in 2013.  

This may be good news in that it could suggest that the new early conciliation process is encouraging more claims to settle but it is still clear that the fee regime is acting as a significant deterrent for many claimants who may well have brought a claim if no fees were payable.