Employment Law and the modern workplace

They never promised 'deregulation', but when the new coalition government took office they did announce a commitment to increasing the freedom and flexibility of small businesses and to review any unnecessary bureaucracy that was threatening to slow the economic recovery. 

As a result, we saw the implementation of three schemes designed to stem the tide of regulation and to cultivate a more competitive environment for businesses to grow. The schemes included a 'one-out, one-in' policy for introducing new legislation; a three-year moratorium exempting micro businesses (with less than 10 employees) and start ups from new regulations; and, in true X-Factor style, the launch of the "Red Tape Challenge" website, allowing the public to vote upon which regulations they believe should be 'eliminated'. 

Implementing EU laws

Employment law was an area specifically identified as in need of reform but unfortunately, as so much employment law derives from the European Union, businesses are unlikely to benefit from the schemes referred to above as they only apply to purely domestic legislation. 

The implementation of new laws required to satisfy an EU Directive will be largely unaffected, albeit the government has promised to stop 'gold plating' these Directives, referring to the practice whereby the previous government sometimes went beyond the bare minimum requirements of a particular Directive when implementing EU laws.
 
Nevertheless, there was some welcome news for employers following the government's decision to commence consultation on reforming the Employment Tribunal system. Amongst the proposals are plans to increase the qualifying service period for unfair dismissal claims from 12 to 24 months and to introduce a requirement for employees to pay a fee in order to lodge a claim. If implemented, these proposals will undoubtedly result in a marked reduction in the number of claims presented to the Employment Tribunals.

Flexibility in the work place

But whilst the route to litigation looks set to become more restrictive, the government remains committed to making actual working relationships far more flexible. The swift removal of the default retirement age set the tone for things to come - an indication that this government does not see its role as being overly prescriptive in matters of the workplace.
 
Unsurprisingly then, 'flexibility', is the main theme of the government's recently launched "Consultation on Modern Workplaces", which considers the right to request flexible working arrangements, reviews the current system of maternity/paternity leave (an area which barely goes 12 months without some form of amendment) and also addresses holiday entitlement.

In brief, the key proposals are:

• To extend the right to request flexible working to all employees (currently only available to parents of children under 17, parents of disabled children under 18 and some carers);
• To introduce a new system of 'shared' parental leave from April 2015. Under this scheme, mothers would be entitled to an initial period of 18 weeks' maternity leave, to be taken in a continuous block. This would then be followed by a period of 34 weeks which could be shared between both parents and taken in smaller, separate blocks of time or otherwise utilised to facilitate part-time work for a specific period; and
• In line with recent ECJ decisions, workers will be permitted to carry over holiday to a subsequent year where they have been unable to take their full annual leave entitlement due to ill health.

Commenting on the proposals, Business Secretary Vince Cable said: "New parents should be able to choose their childcare arrangements for themselves, rather than being dictated to by rigid government regulation as is currently the case. And employers should be encouraged to come to agreement with employees on how work and family responsibilities can be met simultaneously."

So the future of employment law is something of a double-edged sword for employers. On the one hand, they can take some comfort in the proposed reforms to the Tribunal system which should help to weed out speculative claims and generate greater confidence in recruiting new staff. On the other hand, they will need to embrace the concept that, when it comes to human resources, one size does not fit all.
 
Unfortunately, greater flexibility does not equate to less regulation. The government must still set the ground rules for flexibility to thrive which means that, whatever the outcome of the consultation, employment law looks set to maintain its unrelenting pace of change.

Tim Davies is an Associate within the Michelmores Employment Team. For further information on the issues raised in this article, please contact Tim at tim.davies@michelmores.com