The Queen's Speech and UK employment legislation: What lies ahead?

Zee Hussain, partner and head of employment at Colemans-ctts, takes a look at the impact on employment legislation and provides a taste of what we should expect over the government's five year term.

Posted by Zee Hussain

Employment Partner - Colemans-ctts

Fri 12th, Jun

Proposed tax cuts for low earners

A number of new proposals have been put forward including proposed tax cuts for low earners. A bill is due to be announced which will legislate for a permanent tax-free minimum wage, meaning the income tax-free personal allowance will be raised from the present £10,600 to £12,500. If passed, this bill would be implemented by 2020 and in practice, would mean individuals earning the minimum wage working 30 hours per week would essentially pay no income tax.

Income tax bill

Another pledge has been to introduce a law to ensure that no income tax, national insurance or VAT increase would occur before 2020. This would mean stability in terms of financial forecasts for both employers and employees until 2020. To further enhance the labour market, plans have been announced to greatly increase the available number of apprenticeship programmes by around three million vacancies. This should help with employability and further reduce the UK's unemployment figures. This scheme would be funded by reducing the benefit cap to £23,000.00.

Free childcare places

Families remain an integral part of government's agenda with proposals announced for an increase in the current 15 hour free childcare places per week for children aged 3 and 4 to 30 hours per week. Not only will this help families save vast amounts of money, it offers much greater flexibility including in relation to parents' careers. We could also be seeing an increase in job opportunities at childcare establishments, again enhancing the labour market.

Strike law reforms

Reforming the law relating to strike actions is a priority for the new government. The intention is to propose a ban on strike action except where 40 percent of the eligible trade union members vote in favour of strike action. Another linked proposal is to lift the ban on the ability to hire agency staff where a strike action does take place. These reforms would provide employers with a greater level of control and lessen the impact if any such strike action should it occur.

Small Business, Enterprise and Employment Act 2015

While this Act has yet to be implemented, once it comes into play, it would bring changes in relation to employment law and tribunal proceedings, namely:

  • Regulations must be implemented under s.78 of the Equality Act 2010 within the next 12 months to oblige employers to publish information every year highlighting any differences in gender pay.

 

  • Regulations to be implemented to require 'prescribed persons' under whistle-blowing legislation to produce and publish an annual report on public interest disclosures. This would allow a greater degree of transparency in the reporting process.

 

  • Introduction of a system of warnings to enforce unpaid tribunal awards, including a notice by an enforcement officer giving the employer 28 days to pay the award, followed by a penalty notice if the award remains unpaid requiring the employer to pay a penalty to the Secretary of State. This is intended to add more force behind a financial tribunal award and reduce the number of unpaid judgments.

 

  • Regulations to be implemented to put a limit on the number of times a party to employment tribunal proceedings can request a hearing to be postponed and to also require a tribunal to consider whether or not to make a costs award against a party, where that party makes the application to postpone at the last minute. This should in theory mean that tribunal deadlines are taken more seriously and for the tribunal system to be used more efficiently.

 

  • An amendment to the National Minimum Wage Act 1998, which permits the maximum £20,000 penalty for underpayment of the national minimum wage to be imposed for each underpaid worker. Currently this maximum penalty applies as a total penalty amount that can be inflicted on a business despite the number of workers underpaid.

 

  • Exclusivity terms in zero hours contracts would be rendered unenforceable. An exclusivity term prohibits the individual from working under another contract or arrangement and thus limits the workers employment opportunities and subsequent earning potential.

 

  • A provision to be implemented under which individuals who have received exit payments (including compulsory and voluntary redundancy payments) from public sector employers are to repay such payments or an element of such payments where they later return to a position in the public sector. This will offer protection of public money and prevent misuse of the public spending system.


Generally, it has been refreshing to see that the government has stuck to its guns and acted on many of the proposed new laws promised during the election campaign. With five years now to get everything up and running, it will be interesting to see how the economy and the population react to the changes as they take place. While a 'one size fits all' approach is practically unattainable, one thing for sure is that any initiatives that add value to workers and their employers will be another step forward for an effective and productive labour market.

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This article was first published in Thomson Reuters. 

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