Push for change

The formation of the coalition Government holds out intriguing possibilities for the future direction of employment law. It represents the first time since the modern era of employment law began that employment legislation will be framed by the compromising of two political philosophies. Had the Conservatives won outright, we might have expected to see a more substantial reversal of the employment laws introduced by Labour over the past 13 years, a more hostile approach to those laws emanating from Europe and possibly a continuation of the trade union reforms of the 1980s and 1990s. Instead, what we are likely to get is a more nuanced approach towards reform which leaves most (but not all) of the legislation introduced under the previous Government intact.

The promised review

Perhaps the most interesting aspect of the Government’s agenda for employment law is the part about which we know the least. The policy programme (“The Coalition: Our Programme for Government”) promises a review of employment law to ensure that it “maximises flexibility” for employers and employees, while at the same time safeguarding fairness and providing an environment in which businesses can compete. It is not clear, either from the document or from the Queen’s speech, what precisely this means, but some of us may remember that these principles of fairness, flexibility and competition were broadly the same ones by which the previous Government undertook its first review of employment law reform in the late 1990s.

It seems likely that the coalition’s review of employment law will be aligned to its promises to cut business regulation and to end the so-called “gold-plating” of European directives.

Here, the Government may decide to target employment legislation such as the Part-Time Workers Regulations 2000, the Fixed-Term Employees Regulations 2002 and the Agency Workers Regulations 2010, with the latter being particularly vulnerable as they are not due to come into force until October 2011.

The Conservatives were opposed to the Agency Workers Regulations when they were introduced by the previous Government. David Cameron even put forward an early day motion seeking their revocation when he was leader of the Opposition. The UK’s obligations under the EU Agency Workers Directive mean that the Government will require to bring the regulations into force in some form, but it seems likely that it will try to water down the measures, and delay implementation as long as possible.

The review may also have implications in terms of TUPE 2006. The Conservatives indicated before the election that they would seek to rein in those parts of TUPE that deal with service provision changes where they go further than is necessary for compliance with the EU Acquired Rights Directive. The Liberal Democrats expressed no view on this during the election campaign.

Finally, the review of employment law may also extend to the system of employment tribunals. The Conservatives had a number of proposals on this during the election campaign. These included measures to discourage weak or vexatious claims, and the introduction of compulsory mediation for certain types of claim, such as discrimination claims. Many will reject the whole concept of compulsory mediation on the grounds that mediation should remain an entirely voluntary process (its voluntary nature is one of the reasons why it is effective). It remains to be seen what if anything will come of these proposals.

Equal pay and discrimination

The Government has indicated in its policy programme that it will “promote” equal pay and act to end discrimination in the workplace. There is very little detail on how it intends to do either of these things. There is no specific mention of the Equality Act 2010 in either the policy programme or the Queen’s speech – which suggests that the Government plans to leave much of the Act as it is. Both parties broadly supported the legislation as it was going through Parliament, though the Conservatives felt it went too far in places and the Liberal Democrats that it did not go far enough.

The key issue here in terms of the Equality Act is likely to be when its various provisions are implemented. Here, the coalition partners have room for manoeuvre, as the Act was always intended to come into force in phases. The Government is likely to delay any measures which will cost the public sector money, which is why the socio-economic duty on public sector authorities appears to be particularly vulnerable. The Conservatives also indicated that they would review the Act’s provisions on positive action and gender pay reporting.

On the latter issue, the coalition parties appeared to differ during the election campaign. The Conservatives supported compulsory equal pay audits, but only for employers who have been found to have discriminated against people on grounds of gender, whereas the Liberal Democrats supported equal pay audits for all employers with more than 100 employees. The coalition will have to find some way of reconciling these positions. Given the promise of a public sector pay review, what does seem inevitable is a shift towards greater pay transparency generally.

In relation to age discrimination, the Government has indicated that it wants to phase out the default retirement age of 65.

Flexible working and families

It is clear from the policy programme and the Queen’s speech that we can expect legislation on work and families. The two key aspects of this are likely to be the extension of flexible working rights and the creation of a new system of shared parental leave. There is still little detail on either of these proposals (both took different positions on these issues during the campaign: the Liberal Democrats wanted to extend flexible working rights immediately; the Conservatives wanted to phase them in). A briefing paper issued by Downing Street at the time of the Queen’s speech suggests a desire to consult fully and not to rush these proposals.

The policy programme refers to the “promotion of shared parenting from the earliest stages of pregnancy”. It is not clear what this means yet, but the Liberal Democrats campaigned on giving fathers the right to paid time off to attend ante-natal appointments, so this may form part of what is being thought of here.

The politics of compromise

Barack Obama once said: “A good compromise, a good piece of legislation, is like a good sentence; or a good piece of music. Everyone can recognise it. They say, ‘Huh. It works. It makes sense.’”

The coalition Government’s agenda for employment law will inevitably be an exercise in the politics of compromise. Not only will it have to strike the usual balance between the interests of employers and employees, it will require compromises between the two parties, and between the UK and the European Union. For example, the Government has indicated that it will examine the “balance of the EU’s existing competencies”, and will, in particular, “work to limit” the application of the Working Time Directive in the UK.

Like the previous Government, the coalition will use employment law to promote various social policy objectives. Where the new Government is likely to differ from its predecessor is in a more sceptical attitude in relation to what legislation can achieve; and perhaps a greater sense that it is not really the job of politicians to tell employers how to run their businesses. So while we may see an increase in employment rights in certain narrowly targeted areas (e.g. on equal pay, working parents and flexible working), this is likely to be accompanied by a reduction of rights in other areas as the Government tackles what it views as the over-regulation of the employment relationship. In this regard, it is perhaps worth remembering that in employment law, the road to legislative complexity is often paved with the desire to simplify.

Of course, all of this is taking place at a time when employment relationships are being put under huge strain. Tackling the budget deficit will overshadow much of what the Government does over the next few years. Against that background, the detailed content of its legislative programme may be seen by many as peripheral, if not largely irrelevant, to what is really going on at work. Sadly, there is no getting away from the central fact that the experience of work is going to be a deeply unsettling, stressful and unpleasant experience for many people over the next few years, with redundancies, pay freezes and diminished terms and conditions likely to be commonplace. During this time, constant communication and consultation between employers and employees are going to be more vital than ever before.