Residential property
06 Nov 2017 News

Employment law - toolkit for modernisation or regulatory minefield…

There is no doubt about it - the UK labour market is undergoing a period of change. 

Employers, particularly in the SME market, are increasingly tiring of employment-related regulatory red tape. As so much UK employment law is derived from Europe there are big questions around the impact of Brexit. At the moment, so called Generations Y and Z are forcing a wave of more creative working practices. Traditional ideas of employment are being overtaken by the likes of zero hours, gig and agile working, and technological advances threaten low and middle skilled (human) workers. We have to ask ourselves if the law is keeping up?

The “Independent Review of Employment Practices in the Modern Economy” (the Taylor Review, as it has come to be known) commissioned this time last year and published in July 2017, goes some way towards addressing that question. 

The over 100 page Report contains various recommendations across a breadth of topics, many of which make good business sense. 

For example, the reclassification of workers as “dependent contractors” could well bring some much-needed clarity to the vexed question of status which is currently being played out in the Uber and Pimlico Plumber cases, amongst others. 

In addition, a higher national minimum wage is proposed for non-guaranteed hours of work, ensuring that lower-wage workers are better compensated if additional flexibility is required of them. 

However, the recommendations are just that, and the Report acknowledges that the usual bureaucratic boxes will need ticked before we see any concrete reform in real terms.

So what of the here and now?  One can see glimpses of modernisation on the statute books. 

5 April 2017 marked the first ‘snapshot date’ for the new gender pay gap reporting rules, which should see larger employers having to publicly report on their gender pay and bonus gaps. Flexible working requests and practices are on the rise in different shapes and forms - from straightforward part-time to more sophisticated job sharing and home working arrangements.  And “Granny Leave”, once implemented, should give parents the opportunity to return to work sooner whilst allowing grandparents to stay in work, if they wish. 

More modern forms of accountability are being seen too.  We have witnessed so much publicity around zero-hours contracts, which still makes them taboo for some employers, and the reputational damage done to certain larger organisations following the national minimum wage abuse campaign has also been shattering.  The Taylor Review proposes ‘naming and shaming’ of employers who fail to pay Employment Tribunal awards on time, and also delegating enhanced authority on enforcement of minimal levels of pay, to HMRC.

Some people, or indeed whole sectors, may be of the view that employment law has gone too far in its attempts to modernise. 

For smaller businesses with less than 20 staff, navigating complex but fundamental areas such as maternity leave, discrimination or stress at work can be difficult enough without having to deal with any ‘add-ons’.  The prospect of an Employment Tribunal claim can be financially crippling.

On the other hand, we hear of larger employers offering employee benefits such as unlimited annual leave and paid gender reassignment surgery in an attempt to attract and retain the best talent, making for both a legally complex and commercially competitive market.

The challenge for the Government going forward, particularly whilst trying to navigate the Brexit negotiations, will come in trying to find a way to strike the right balance. 

Generally speaking, effective employment law does not lend itself to a ‘one size fits all’ approach.  Blanket over-regulation threatens business and entrepreneurialism being stifled, and disproportionate cost and time being spent on compliance; whilst under-regulation threatens certain pockets of workers being under-protected and, worse still, exploited.  It could be said that effectiveness will be achieved not by focussing arbitrarily on ‘more’ or ‘less’ law and regulation (despite various Governments finding “one in, one out” or similar policies irresistible), but on achieving certainty.  Certainty usually instils confidence, which is essential for a healthy, productive and progressive working culture.

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