Political uncertainty means HR issues hang in the balance

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We explore the effects the minority government could have on Brexit talks, workers' rights and immigration issues

The UK general election on 8 June produced a surprise result for many. In a bruising result the Conservatives lost their overall majority, leaving them to form a minority government with the Democratic Unionist Party (DUP). At the time of going to press a deal had just been finalised.

In line with other major parties’ pre-election manifestos, the Conservatives’ policies contained much on worker and HR-related issues, including corporate governance, executive pay, skills, immigration, and the gig economy.

Workers’ rights featured heavily. This included increasing the National Living Wage to 60% of median earnings by 2020, measures to protect workers’ pensions, and a statutory right to a year’s unpaid leave to care for a relative. Equally, protecting gig economy workers and the self-employed featured, with the Taylor Review a key element.

But the election result has raised questions on how much power the minority government now has to force these pledges through. The Queen’s Speech added to this uncertainty.

“The Queen’s Speech [was] noticeably light on detail about workplace relations,” comments Crowley Woodford, employment partner at law firm Ashurst. “The new political reality has meant that Theresa May’s grand pre-election rhetoric of the ‘greatest expansion of workers’ rights by any Conservative government in history’ has now been significantly toned down.”

Norman Pickavance, senior adviser for Blueprint for Better Business, is concerned that the government’s preoccupation with preparing for Brexit talks will detract focus from workers’ rights. Pickavance caveats, however, that he hopes the increasingly important role of gig working to the UK economy means he’s disproved.

“We still need a highly flexible UK jobs market but have to accept that it’s not functioning optimally for all workers,” he says. “The gig economy is here to stay but we must address some fundamental issues such as workers’ rights.”

Stephen Clarke, research and policy analyst at the Resolution Foundation, agrees, highlighting the importance of the Taylor Review in strengthening the definitions of self-employed, worker and employee. This, he says, could potentially include a legislative change where the onus to prove ‘worker’ status is transferred to the employer.

“That could be a more likely direction of travel given the stalemate in parliament and Labour traditionally strongly supporting workers’ rights,” he says.

Lucy Gordon, senior solicitor at ESP Law, believes that given cross-party consistency on providing protection for gig economy workers, it’s highly unlikely employees won’t enjoy a boost to their rights. This could even extend to zero-hours contracts.

“Despite the Conservatives being silent on zero-hours contracts, given the tilt in political power it could be that zero hours may be looked at by the Conservatives as a consensus issue, along with maternity pay and paternity leave,” she says.

Clarke predicts a similar positive fate for the Conservatives’ pre-election pledge to enshrine workers’ rights in UK law once the country leaves the EU. “Both Labour and the Conservatives committed to ensuring there’s no weakening of workers’ rights outside the EU prior to the election,” he says. “If there is a watering down of workers’ rights you can imagine Labour will oppose it. With the minority government it will be more difficult than it would have been to ignore this opposition.”

However, Pickavance points out that it is difficult to predict this new minority government’s approach to balancing the interests of workers and business. Kevin Green, CEO at the Recruitment and Employment Confederation (REC), thinks that a minority Conservative government could spell a less interventionist approach in relation to business, which would mean a chance for organisations such as the REC and CIPD to engage more in the policy arena than in previous years.

“There has been much anti-business rhetoric in the last couple of years with the government focusing on scrutinising business through executive pay reporting. However, there may be a less interventionist approach with this minority government,” he says.

A key area that now hangs in the balance is immigration. Conservative immigration pledges included doubling the Immigration Skills Charge levied on companies employing migrant workers, and commissioning the Migration Advisory Committee to make recommendations on visas for migrant workers. But Green feels that given the Conservatives’ weakened state, a tougher stance on Brexit is unlikely.

However, Clarke points out that the government’s stance towards Brexit-related policies like freedom of movement is unclear, with the Conservatives torn between satisfying Leave voters, and compensating those who turned from the party during the election in Remain voting areas and younger Remain voters. Certainly the Queen’s Speech failed to offer much clarification on the UK’s future immigration policy.

Addressing skills shortages in certain sectors, along with investing in UK workers’ skills, were other key Conservative manifesto pledges. New legislation was promised to give employees seeking to develop their skills in their existing jobs the right to request leave for training. The government also pledged a national retraining scheme.

But training UK employees to fill the gap left by EU workers will take years, feels NHS Employers’ CEO Danny Mortimer. “EU citizens’ rights remains one issue that we hope to see resolved sooner rather than later,” he says. “However, there’s also the wider immigration policy to settle, and particularly how we get access to labour, which is in the interests of the health as well as the wealth of the nation.”

“It’s really important to resolve the immigration policy because if the economy continues to grow with record employment opportunities, the idea that we’re going to meet these employment demands with a diminishing pool of EU workers could put a huge constraint on the effectiveness of our labour market,” agrees Green.

So the UK HR community waits, as Brexit talks begin, with baited breath to see what approach will be taken – with hopes from many quarters that a softer stance on immigration could be one fallout of the hung parliament result. Also unclear at present is the focus that will be given to employment and workers’ rights pledges, with Brexit now potentially demanding even more government attention. However, given the urgency of many of these reforms, and given cross-party consensus on their importance, there’s a strong chance we could see much more from government on this soon.

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