How do the new Government's plans affect employers?

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26 May 2010

The new coalition Government has now published its programme for government and set out, in the Queen's Speech, the bills that it hopes to achieve in the next 18 months.

The Government has stated it plans to "review employment and workplace laws, for employers and employees, to ensure they maximise flexibility for both parties whilst protecting fairness and providing the competitive environment required for enterprise to thrive".  What this will mean in practice is not yet clear.

However, there are some areas of employment law where employers are likely to see change:

 •                     Flexible Working

The Government intends to extend the right to request flexible working to all employees and will consult with businesses on how best to do so. 

•                     Shared leave

The Government states that it will encourage shared parenting from the earliest stages of pregnancy.  This will include a system of flexible parental leave.  The Liberal Democrats stated in their manifesto that they would give fathers the right to time off for ante-natal appointments.  Whilst the Government has not stated whether it will adopt this policy, this may be what is meant by "shared parenting from the earliest stages of pregnancy."

•                     Default retirement age

The Government has committed to phase out the default retirement age but does not give any timetable for this.

•                     Working Time

The Government has committed to work to limit the application of the Working Time Directive in the UK.  This presumably refers to the ability to opt-out of the Working Time Directive.

•                     Equal Pay

The Government has committed to promote equal pay and take a range of measures to end discrimination in the workplace.  This will include a fair pay review in the public sector, to prevent the highest paid earning more than 20 times the salary of the lowest, and the promotion of gender equality on the boards of listed companies.  There is no mention of the Equality Act and when it will be brought into force or whether any changes will be made to it.

•                     National Insurance

The Government has committed to block next year's 1% rise in national insurance contributions by employers. 

•                     Immigration

The Government intends to introduce an annual limit on the net number of non-EU economic migrants that are admitted to the UK. 

At this stage, there is little detail as to how the Government intends to achieve these aims and we will update you as any proposals develop.

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