The Queen’s Speech Ushers In A New Employment Law Landscape
Wednesday, 9th June 2010
In May Whitehall opened its doors to a coalition government for the first time in more than three decades. While controversy, speculation and elements of optimism have followed David Cameron and Nick Clegg’s simultaneous entrance to Downing Street, the reality is that the nation’s laws are preparing for a shake-up.
With such radical changes on the horizon, employment law looks like being the first issue to be moulded into a coalition image. It is important that employers and their staff understand the changes and are fully prepared for what lies ahead.
May’s Queen’s Speech ushered in a raft of amendments and alterations to current employment law, and, while the landscape may not change for some months, early preparation is essential to staying on the law’s good side.
National Insurance Contributions:
National Insurance (NI) was the cornerstone of David Cameron’s march to power. While Gordon Brown argued that raising contributions for both employers and their staff would stabilise Britain’s crumbling economy, the Conservatives and its raft of economic supporters claimed that the “jobs tax” would damage economic growth in the future.
Subsequently, while employees will still have to fork out an extra 1% of their yearly earnings on NI, employers’ contributions could potentially be frozen, to the delight of company bosses throughout the UK.
Employees’ NI rate rise will finance an increase in the threshold at which that tax is paid, a prominent Lib Dem policy before the Election, which will mean those earning under £20,000 pay less than they do at the moment.
Immigration caps:
With the recession continuing to eat away at employment levels, more and more Brits find themselves standing in line for government benefits. As a result, immigration quickly became one of the electorate’s most hotly debated topics in the run up to May’s election.
Coalition changes to non-European Union economic migrants are hoping to safeguard jobs for British workers while stemming the tide of migrants approaching the nation’s shores.
While the Queen’s Speech did not reveal any precise number of non-EU migrants allowed in to the country, it outlined plans to limit the number of migrants coming from places like India and the Far East, traditionally a source of scientists and engineers for UK firms who can’t find expertise locally.
The changes will be welcomed by those pushed into the benefit queue by the recession but could limit the quality of staff enjoyed by employers in the future.
DRA:
Prior to the Queen’s Speech, the coalition agreement set out plans to “phase out” the default retirement age (DRA), currently applicable to employees aged 65 or older.
Although it is clear that the government intends to abolish the DRA, helping workers survive harsh financial times by choosing when they retire, it is unclear what timetable and alternatives will replace the controversial policy.
But what Next?:
The Queen’s Speech marked the new government’s first foray into widespread policy changes, and, as the country faces an uncertain economic and social future, shifts in the legal landscape are inevitable.
Both employers and employees will contest and welcome the Queen’s Speech, but, if questions linger over how such amendments will impact your daily life, contact us about the new law for information and help.
We are here to help
Call 0800 027 5999 or ask a quick question here:
