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I knew you were trouble

I knew you were trouble

Both men have made a series of pledges to reform employment law.  Of course, there is a significant barrier to either programme being put into effect: victory in a general election.  Current polling makes that prospect seem somewhat distant, whatever the results of the Labour leadership contest. Nevertheless, it is always wise to be prepared in the HR world, so below we take a closer look at what a Corbyn or Smith victory might mean for us.

Overall, the picture is fairly similar from both candidates: stronger union rights, incremental increases to individual rights (but significant moves on enforcement), and greater pay / equality reporting requirements on companies.  The most radical proposal is probably Owen Smith’s “Modern Wages Councils” suggestion, albeit one that will be limited to certain sectors.  However, all of these proposals are perhaps less immediately important than Theresa May’s statement a few days before becoming Prime Minister that she would put workers on company boards. We may be waiting some time for more news of this as our new PM works through her challenging Brexit-dominated in tray.

Trade Unions

This is a rich area for both sides.  Owen Smith pledges to end sweetheart union deals (perhaps with Boots v CAC in mind) and strengthen union recognition rights.  Like Corbyn, he will also repeal the Conservative Government’s Trade Union Act 2016 (which introduced turnout thresholds for strike action).

Jeremy Corbyn has also said that employers with 250 employees and over should be required to recognise a specific union for collective bargaining over pay.  Arguably this strong emphasis on trade unions as the primary mechanism for worker representation distinguishes his policies from Smith’s approach.

Collective Bargaining and Worker Representation

It’s here that Owen Smith’s proposals seem more dramatic. For example, he advocates introducing “Modern Wages Councils” covering the hospitality, retail and social care sectors.  These councils would negotiate binding minimum terms and conditions for all employees, and would include representatives from employers, unions and workers.

The new Prime Minister has also been announcing new policies on worker representation.  It was notable that Theresa May used one of her early statements to highlight her plan to put worker representation on boards – a radical step for the UK that would not look out of place in either Labour leadership contender’s manifesto.

Individual Rights

Most significantly, Owen Smith and Jeremy Corbyn both say they will “introduce Day One employment rights”.  Presumably this would mean an end to the qualifying period for claiming unfair dismissal, which has varied between 6 months and two years over the last 35 years, going up and down as the governing party changed.  There is a certain simple attraction to this proposal – why should any employer be entitled to discuss an employee in a manner that the law defines as “unfair”? – but we will all have stories of employees who appeared suitable on interview but quickly proved to be a poor hire.  Employers would strongly resist this end to probationary periods.

Both candidates would also outlaw zero-hours contracts.

Equality

As well as enhancements to equal pay legislation, Smith would scrap fees for Employment Tribunals, returning employment litigation to its pre-2013 state (and presumably volumes). All companies above “a certain size” would also have to publish race equality plans, and all firms with 20 employees or more would have to publish details of their highest and lowest rates of pay.

Corbyn advocates a more radical publication policy, with all employers over the 20 employee threshold required to publish the “equality characteristics” and pay rates for every role in the organisation.  Aside from the potential administrative burden, it will be very difficult for employers to require employees to disclose (for example) their sexuality or disability status, making compliance difficult.  Corbyn has also previously said he would increase the three-month time limit for discrimination claims, but has not repeated this in the latest campaign.