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A Conservative victory: what does this mean for employment law?

The Conservative party won the 2019 election with a majority that has not been seen since the Thatcher years. However, the Conservative manifesto was not particularly long or detailed. So what employment law changes can we expect over the next 5 years?

1. Pay
The manifesto confirmed that the national living wage will increase to £10.50 per hour by 2024. In addition, the age threshold for the living wage entitlement will be lowered to the age of 23 by 2021, and then to 21, by the year 2024.

2. Family friendly rights
The Conservative party have pledged to give more time off to new parents of ill babies, as well as seeking to improve the use of statutory paternity leave.

In addition, they have also pledged to continue the good work plan focused on modern working practices. The manifesto confirmed an intention to progress a number of the proposals which were consulted on over the summer, including one-sided flexibility for atypical workers, extending protection on redundancy to six months after maternity leave and the creation of a single enforcement body.

There was also mention of proposals to make it easier for fathers to take paternity leave, and to support flexible working as well as a review and redesign of family leave and pay which could see family friendly rights being made available to all flexible workers.

3. Pensions
In the Conservative manifesto, the party promised to reintroduce the Pension Schemes Bill, which was originally introduced in the Queen’s Speech in October 2019. The Bill includes new powers for the Pension Regulator, as well as updated rules on collective defined contribution scheme and pension dashboards - ensuring pensions scheme members have easy and clear access to their pension information.

The Bill will also make it possible to punish those who have committed wilful or reckless behaviour in the management of pensions schemes, by making such actions a criminal offence.

The Bill was shelved after being introduced to the House of Commons to allow the general election to take place. The Minister for Pensions and Financial Inclusions has since commented that he is confident that the Bill will now be re-introduced for scrutiny by the House.

4. IR35
Boris Johnson has previously pledged to review the IR35 tax legislation, although it may be that this is pushed to the bottom of the pile given the more pressing matter of Brexit. Changes to IR35 were due to be implemented in the private sector from April 2020 reflecting the position currently within the public sector.

Essentially, this would mean that a business engaging contractors via an intermediary, such as a personal service company, would need to carry out a determination of their tax status and, if that resulted in the consultant being deemed an employee for tax purposes, the fee payer would have to account for the tax and National Insurance contributions. This could have a significant cost implication for private sector organisations using contractors in this way.

5. Immigration
The type of immigration system that will be in place post-Brexit remains unclear. In September 2019 Priti Patel, the home secretary tasked the Migration Advisory Committee with reviewing how a points-based immigration system -similar to the Australian system - could be implemented in the UK The Conservative party manifesto also included an increase to the health surcharge that is payable by applicants from £625 to £800.

The deadline of 31 December 2020 for Settled Status remains and currently, commentary from the Conservative cabinet seems to imply that if EU citizens miss this deadline, they will be deemed illegal immigrants from 1 January 2021.

Jonathan Beech, managing director of Migrate UK has urged the new Conservative Government to “look to introduce a declaratory registration system through an Act of Parliament that would confer automatic rights to EU citizens currently residing in the UK to continue to live and work in the UK after Brexit. Hopefully this is something the Conservative Party will now consider so we don’t see scenarios similar to those with the Windrush scandal”.

It goes without saying, however, that the progress of the proposed changes we have highlighted above rests on the speed and ease with which the new Government can negotiate Brexit, so that other policies can receive the required attention and scrutiny from Parliament.

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

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