HR talking point: What is next for employment law?

Author: Darren Newman

In the current political climate, it seems foolish to make predictions about the Government's future policy in relation to employment law. But amidst widespread speculation about a "bonfire of rights", it is worth looking at what the Government has so far said and done that might indicate the direction of travel, according to consultant editor Darren Newman.

Sensible employment law proposals

First, there are three Private Members' Bills that appear to have Government backing and will presumably become law with little or no controversy.

The Neonatal Care (Leave and Pay) Bill will allow parents whose newborn child spends time in neonatal care to be granted up to 12 weeks' leave paid at a minimum rate (statutory neonatal care pay).

The Employment (Allocation of Tips) Bill aims to require employers in the hospitality sector to make sure that all tips, gratuities and service charges that they receive from customers are paid over to workers in full without deductions.

And finally, the Protection from Redundancy (Pregnancy and Family Leave) Bill will allow for employees returning from maternity or other family leave to enjoy some protection against being made redundant for a "protected period" following their pregnancy.

Employment law deregulation

The key question is whether these modest improvements to employee rights will be accompanied by measures that are more deregulatory. Here, there is actually the potential for dramatic change.

The Government has introduced the Retained EU Law (Revocation and Reform) Bill, which is one of the most extraordinary pieces of legislation I have ever seen.

We all knew that at some stage the Government would review UK regulations that are derived from our former membership of the EU. My assumption was that this review would be followed by the Government announcing the changes that they propose to make.

This Bill reverses that process. It repeals the whole of the UK's retained EU law from the end of December 2023 - except for the legislation that the Government chooses to retain.

The Bill does not repeal laws that have found their way into primary legislation so discrimination law, maternity leave and measures related to collective redundancy consultation will stay in place despite their links with EU law.

However, regulations on TUPE, agency workers, part-time workers, fixed-term employees and working time are all due for repeal.

A waiting game for employers

We will have to wait for a decision as to which of these regulations - or which parts of them - the Government intends to keep.

On the one hand, it is very difficult to imagine the Government allowing the regulations on TUPE to be repealed, given the huge disruption and uncertainty that this would cause. On the other hand, I cannot see the Government specifically stepping in to save the regulations on agency workers.

I suspect that working time legislation will be retained in part. The maximum 48-hour working week has always been unpopular with many in the Conservative Party and a specific decision to keep it would seem unlikely. However, surely the Government does not intend to abolish the right to paid annual leave?

Interpretation of UK employment law

The Bill also seeks to remove any special status that EU law may have in the interpretation of UK law. For the laws that survive the cull in 2023, that could be very significant.

In particular, the current position on the calculation of holiday pay is heavily influenced by European Court of Justice decisions that conflict with the wording of UK working time legislation.

If the Bill remains as it is, issues such as the relationship between annual leave and sickness absence and the inclusion of overtime pay and allowances in the calculation of holiday pay will all have to be revisited. Not many people will view that as a welcome prospect.

Trade unions and industrial action

Another strand of employment law reform is likely to relate to trade unions and industrial action. I was particularly struck by the commitment that the Chancellor's Mini-Budget statement gave in relation to this, where he effectively committed to two reforms.

The first proposal is to introduce a requirement for a minimum service level to "stop militant trade unions closing down transport networks during strikes".

The second proposal is to introduce legislation to "require unions to put pay offers to a member vote to ensure strikes can only be called once negotiations have genuinely broken down".

Both of these proposals are potentially tricky.

Minimum service level during industrial action

It is true that it is common for countries to have some rules to prevent their infrastructure from being effectively shut down by industrial action. What matters, of course, is what is meant by a "minimum service level".

Any legislation will be complicated by the fact that our national infrastructure is not owned and operated by single nationwide employers. When rail workers go on strike in the UK, it is in pursuit of a dispute between them and their employer operating a particular line.

When the whole network is affected, that is the result of coordinated action in pursuit of technically separate disputes - each covered by a separate strike ballot. In legal terms, each strike is separate even if the overall impact is not.

Legislating to require a minimum service level would require specific limitations on a union's ability to coordinate industrial action - which would be a new kind of legal duty and would be quite complex in cases where more than one trade union is involved.

It also raises the question of how the appropriate minimum service level is to be defined and how it is to be determined when a particular strike would take the service below that threshold. The law protects workers who do not answer their union's call to take strike action and so the impact of industrial action is hard to gauge in advance.

The level of service that is provided may also depend on measures taken by the employer in terms of timetabling and planning - including the newly permitted use of agency workers during industrial action. It is easy to imagine a situation where the union argues that a minimum service level could be maintained but the employer disagrees.

Requirement for unions to put pay offers to members

A measure to "require unions to put pay offers to a member vote to ensure strikes can only be called once negotiations have genuinely broken down" is easier to fit within the current framework of industrial action law. However, it still presents a challenge.

Lawful industrial action must be in pursuit of a particular trade dispute and have the support of a ballot. There is already an issue as to when a fresh offer from the employer changes the nature of the dispute so much that a fresh ballot is needed. The test is whether the union genuinely and honestly believes that the dispute covered by the ballot is still live (London Borough of Newham v NALGO [1993] IRLR 83 CA).

This means that if a strike has been called over a claim for a 10% pay rise, the union can maintain its industrial action until 10% is offered.

What the Chancellor seems to be proposing is that a fresh ballot will be needed every time a fresh offer is made, even if that falls short of what is being demanded. If that is indeed what is intended, this would be a significant change.

As an illustration, if an employer initially offered a 3% pay increase when the union is demanding 10%, it would seem surprising that an offer of 3.2% would trigger the need for a fresh ballot. It is surely wrong to create an incentive for an employer to make incremental changes in its offer - not with a view to resolving the dispute but to force the union to go through a costly and time consuming reballoting process.

Perhaps a more sensible test - for example that the offer is one that may reasonably be seen as a way of resolving the dispute - could be adopted. However, that would create a good deal of uncertainty as negotiations progress.

Dramatic changes on the way

It is not clear how developed the Government's thinking on these issues really is and there is as yet no indication of timetable. However, it is starting to look as though, after a period of stability, employment law is about to see some dramatic changes.