IMPORTANT: This briefing note is only intended as a general statement of the law and no action should be taken in reliance on it without specific legal advice. Release Date: 21 May 2010

Briefings

Yesterday, David Cameron and Nick Clegg published the new Conservative and Liberal Democrat Coalition policy programme. They believe it has the potential to deliver “era-changing, convention challenging, radical reform”. Strong words indeed – so what do these radical proposals hold in store for employers?

1. Bonuses
As expected, one of the Coalition's flagship proposals is to bring forward “detailed proposals for robust action to tackle unacceptable bonuses” in the financial services sector, to ensure that bonuses are effective at reducing risk.

2. Employment legislation
Employment and workplace laws for both employers and employees will be reviewed to “maximise flexibility” for both parties, but this will go hand in hand with a “one in, one out” policy for regulation (meaning that no new regulation will be introduced without existing regulation being cut).

3. Equality and the Equality Act
Although the Coalition states it will “take a range of measures to end discrimination in the workplace”, the details of these measures are not set out. Notably there is no reference to the Equality Act 2010, which is due to come in to force later this year, and it remains to be seen how exactly this will be dealt with by the new government. There is, however, a clear commitment to promote equal pay.

4. Work and families
The existing right to request flexible working will be extended to all employees. In addition, a system of flexible parental leave will be promoted to encourage shared parenting.

5. Retirement
As expected, the default retirement age of 65 will be phased out during the current parliament. Steps will also be taken to set the date from which the state pension age will start to rise to 66.

6. Europe
Although the Coalition states that Britain will remain a “positive participant” in Europe, it also commits to ensure that no further power is transferred. In particular, it commits to limit the application of the Working Time Directive in the UK.

7. Taxation
The Coalition promises to stop the “jobs tax” – a reference to the proposed rise in National Insurance Contributions – and further details will be announced in the forthcoming Budget. There is also a commitment to increase the personal allowance for income tax.

So, there will be some key changes for employers during the current parliament, although it remains to be seen how the basic proposals will be implemented. In addition, with some sources predicting stormy weather ahead for the new Con-Dems, employers and political commentators alike must wait and see whether the Coalition survives long enough to deliver the policies to which it has committed.

To speak to one of our employment experts, or to discuss how these proposals could affect your business, please contact Joanna Blackburn, Head of Employment, on 020 7440 7162.