What might a new Tory government mean for employers?
The snap election is just days away, so we’ve delved deeper into the party manifestos to understand how the future Government will respond to the changing employment landscape.
Read on to find out more about the Conservative’s key employment policies, from XpertHR and Business in the Community (BITC).
Pay, tax and employment support
The conservatives plan to increase the national living wage to 60% of median earnings by 2020 (currently forecast to be £8.75), but after that, only by average earnings growth.
They also intend to legislate to make executive pay packages subject to strict annual votes by shareholders, and will require listed companies to publish the ratio of executive pay to broader UK workforce pay. Chief Executive of CIPD, Peter Cheese, has commented however, that “It would be better if companies were benchmarked against their own median pay.”
The Tories have pledged to increase the personal income tax allowance to £12,500 by 2020, with the higher rate starting at £50,000. They have said that they would not increase the level of VAT but, as expected, there are no longer any similar promises for national insurance or income tax.
They have however agreed to offer a one year holiday on National Insurance Contributions for employers recruiting former wards of the care system, someone with a disability, those with chronic mental health problems, those who have committed a crime, veterans leaving the armed forces and those who have been unemployed for over a year.
Peter Cheese has stated that the national insurance holidays incentive is well-intentioned, but that evidence from previous similar initiatives suggests it is likely to prove either wasteful or ineffective.
“A better way forward is to encourage more targeted and bespoke support to companies who might be persuaded to take more disadvantaged people on, especially if they fear the impact of Brexit on labour supply and want to develop alternative sources of less-skilled labour from the domestic population,” he said.
The Conservatives have pledged to get 1 million more disabled people into work over the next ten years.
Workers’ rights and human rights
The party will ensure people working in the ‘gig’ economy are properly protected. They will help all workers seeking to develop their skills in their existing jobs by introducing a new right to request leave for training for all employees.
The Conservatives also aim to help all workers to stay in secure jobs through a training scheme which employers can fund through the Apprenticeship Levy.
With regards to Brexit, the Tories pledge that workers’ rights conferred on British citizens from our membership of the EU would remain.
The Party would enact the Great Repeal Bill converting EU law into UK law, allowing businesses and individuals to continue ‘business as usual”. This approach means that the rights of workers would continue to be protected in UK law at the point at which we leave the EU.
The manifesto also states that the Tories would not bring the EU Charter of Fundamental Rights into UK law. They would not repeal or replace the Human Rights Act while the process of Brexit is underway, but “would consider our human rights legal framework when the process of leaving the EU concludes”.
The UK would remain signatories to the European Convention on Human Rights for the duration of the next Parliament.
Self-employment and pensions
A new Conservative Government have committed to increasing punishments for companies and directors caught mismanaging pension schemes. They would build on existing powers to give pension schemes and the Pensions Regulator the right to scrutinise and, in extreme cases, stop mergers, takeovers or large financial commitments that threaten the solvency of a pension scheme.
The Tory government would also consider introducing a new criminal offence for company directors who deliberately or recklessly put at risk the ability of a pension scheme to meet its obligations.
To rectify a lack of employee representation at board level, the party would change the law to require listed companies to “nominate a director from the workforce, create a formal employee advisory council or assign specific responsibility for employee representation to a designated non-executive director”.
Subject to safeguards, a new Conservative administration would introduce, for employees, a right to request information relating to the future direction of the company.
These strengthened arrangements would apply to publicly-listed companies, but there would also be a consultation on how corporate governance of privately-owned businesses could be strengthened.
With regard to state pensions, May and her colleagues promise to maintain the “triple lock” but only until 2020, when it would introduce a new “double lock”, meaning that pensions would rise in line with earnings’ inflation general inflation – whichever is higher.
The Tories would extend pensions auto-enrolment to the self-employed, a huge technical challenge!
Maternity, paternity and family
They’ll support companies to take on parents and carers returning to work after long periods of absence, the right to 2 weesk child bereavement leave, and the new right to care for sick relatives full-time.
Ther is also reference to extending maternity and paternity right to temporaray employees which coud be one of the most expensive and contentious propsosals in the manifesto.
The Conservatives would control immigration and secure the entitlements of EU nationals in Britain and British nationals in the EU.
They would increase the earnings thresholds for people wishing to sponsor migrants for family visas and impose higher requirements on students wanting to work in Britain after their studies.
The Party would ask the Migration Advisory Committee to make recommendations on how the visa system can be better aligned with industrial strategy. It envisages reserving significant numbers of visas for workers in strategically important sectors, such as digital technology.
And it would double the immigration skills charge levied on companies employing migrant workers, to £2,000 a year by 2022.
The UK would establish an immigration policy that allows us to reduce and control the number of people who come to Britain from the EU, while still allowing us to attract skilled workers the economy needs.
Apprenticeships and vocational skills
The Tory Party wants to replace 13,000 existing technical qualifications with new qualifications, known as T-levels, in subjects including construction, creative and design, digital, engineering and manufacturing, and health and science.
The conservatives state that they will establish new institutes of technology, backed by employers and linked to universities, in every major city in England to provide higher-level apprenticeships and bespoke courses for employers.
Employers would be at the centre of these reforms and local skills shortages would be dealt with through Skills Advisory Panels and Local Enterprise Partnerships working at a regional and local level.
They’ll deliver on a previous commitment to create 3 million apprenticeships for young people by 2020.
Their manifesto also highlights that they plan to allow large firms to pass apprenticeship levy funds to their supply chain, and develop a new programme for larger firms to place apprentices in their supply chains.
They plan to explore the possibility of teaching apprenticeships sponsored by major companies, especially in STEM subjects.
The Conservatives would, they say, “produce the best programme of learning and training for people in work and returning to work in the developed world”. They would introduce a new right to request leave for training for all employees.
Presumably the new right differs from the current right under of the Employment Rights Act 1996, in that it extends to all employers and all employees, not just those organisations with 250 or more staff, and not just those employees with 26 weeks or more service.
Alongside this new right, the Party would introduce a “national retraining scheme”, the costs of which would be met by the state, with companies able to access the apprenticeship levy to support wage costs during the training period.
Cheese commented: “While we welcome the idea of a creating a national retraining scheme, we are concerned at the suggestion that companies will be able to use the apprenticeship levy to support wage costs as part of this initiative. A far better way to boost training opportunities for individuals and meet employers’ skills needs would be to reframe the apprenticeship levy as a more flexible training levy.”
The party will introduce a UCAS-style portal for technical education and will offer discounted bus and train travel for apprentices.
Mind the gap(s)
The manifesto states that companies with more than 250 employees would be required “to publish more data on the pay gap between men and women”. Whether or not “more data” is in addition to the gender pay gap reporting requirements launched in April 2017 is unclear.
What is clear is that the gender pay gap would be joined by a race pay gap; large employers would have to publish the pay gap for people from different ethnic backgrounds if the Conservatives get into power.
The Tory Party would improve the take-up of shared parental leave (how is not clear) and help companies provide more flexible work environments that help mothers and fathers to share parenting. It would also support employers to take on parents and carers returning to work after long periods of absence.
The manifesto also talks about the “mental health gap”. The Tories would “transform how mental health is regarded in the workplace, amending health and safety regulations so that employers provide appropriate first aid training and needs assessment for mental health, as they currently do for risks to physical health”.
As expected, protections under the Equality Act 2010 would be extended to discrimination to mental health conditions that are episodic and fluctuating – currently, conditions need to be long term, lasting 12 months or more.
Conservatives pledge to get one million more people with disabilities into employment over the next decade, harnessing the “opportunities of flexible working and the digital economy to generate jobs for those whose disabilities make traditional work difficult”, providing employers the support needed to hire and retain people with disabilities.
The public sector
The Tories want the NHS to become a better employer. It would strengthen the entitlement to flexible working to help those with caring responsibilities for young children or older relatives; and create new services for employees to give them the support they need, including quicker access to mental health and musculoskeletal services. It would act to reduce bullying rates in the NHS, which are “far too high”.
They would also recruit up to 10,000 more mental health professionals.
The Tories would look at ways to make sure civil service recruitment more diverse, from the perspective of gender, race and social class.
A Conservative government would continue to fund graduate recruitment schemes for schools, the police, prisons, social care and mental health organisations, but would also provide seed funding for schemes to recruit older professionals from other sectors.
“Public services are dependent upon the public servants who run them,” states the manifesto, “which is why we would establish in law the freedom for employees to mutualise, where appropriate, within the public sector.”
Starting with the UK Government’s arm’s-length bodies, the Tories would start moving significant numbers of civil servants out of London and the south east, to cities around the UK. It would ensure that senior posts move too.
For the police, the Civil Nuclear Constabulary, the Ministry of Defence Police and the British Transport Police would be merged, and direct entry into the police would be expanded, including at chief officer level.
The entry requirements, training, management and career paths of prison officers would also be reformed.