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What Will Liz Truss Mean For Employment Law? – Employee Benefits & Compensation


Liz Truss has now been confirmed as the next UK prime
minister. This article takes a look at some of the commitments that
she has made so far and what her leadership could mean for
employers and employees.

Now we know that Liz Truss will be taking the reins of the UK
government, businesses will be wondering what this is likely to
mean for them and their workforce. As is to be expected, lots of
the promises and pledges that were made during the Conservative
leadership contest were quite vague, and we will have to wait to
see the full details when they are implemented. However, this
article discusses some of the key commitments Ms Truss has made
that could impact both employers and employees.

Key commitments

Industrial action

Some of Ms Truss’ most radical proposals relate to
industrial action. This is a hot topic in the UK at the moment with
ongoing national rail strikes, as well as strikes impacting other
services such as bus, postal and waste collection. The last few
months have been labelled by some as the “summer of
discontent” and, with the cost of living crisis set to
continue, more strikes are expected.

Earlier this year, the government quadrupled unions’ potential liability for
calling unlawful strikes and removed the ban on agencies supplying
workers to fill in for employees who are taking part in industrial
action
. In line with this trend, Ms Truss has said that she
will propose legislation within 30 days of becoming prime minister
making it more difficult for industrial action to take place,
including:

1. Setting minimum service levels – Whilst the
government has not yet implemented its 2019 manifesto commitment to
introduce minimum service levels during transport strikes, Liz
Truss has pledged to bring in minimum service levels for critical
national infrastructure. It is thought that the new law could
extend beyond the transport sector to other workers such as
teachers and postal workers. Whilst it is currently not clear
exactly how this proposal would work in practice, it would be open
to challenge, as the imposition of minimum service levels has
already been successfully challenged in a French case before the
International Labour Organization.

2. Raising ballot thresholds supporting a strike for it
to be lawful from 40% to 50% of members
– This is likely
to make it more difficult to strike as, assuming that not every
member will turn out to vote, a large number of those who do will
need to vote in favour. However, this wouldn’t prevent every
strike from taking place; for example, when the RMT union balloted
its members earlier this year, 71% of those balloted took part in
the vote, with 89% of them voting in favour of strike action (i.e.
63% of members).

3. Increasing the minimum notice period for strike
action from two weeks to four weeks
– In theory, this
would allow businesses to better prepare for strikes and make it
easier to arrange for agency workers to cover for any workers who
are striking.

4. Introducing a ‘cooling off period’ after each
strike
– This would prevent unions from striking as many
times as they wanted to in the six-month period after a ballot
without having to seek a new mandate from members for each strike
action (as is currently the case).

5. Removing tax free payments – Union
members who are striking would no longer be able to receive
payments from their union tax-free which would increase the cost of
striking to members.

Repeal or reform of EU law

In July 2022, Ms Truss committed to reviewing all retained EU
laws and repealing or replacing any that are deemed to be holding
back the economy by the end of 2023. The mechanism for doing this
is likely to be the forthcoming “Brexit Freedoms Bill”
which was originally announced in January 2022 and subsequently
promised in the Queen’s Speech in May. The text has not been
published, but the bill is expected to set out a new fast-track
process for the removal or repeal of retained EU laws with
(potentially) a sunset clause providing for their automatic
removal. In his role as Brexit Opportunities Minister, Jacob
Rees-Mogg previously suggested a deadline of June 2026 for the
removal of any retained EU laws which had not already been removed
or reformed, but it appears that Ms Truss intends to dramatically
accelerate this.

Many employment laws will be affected by this proposal,
including the Working Time Regulations, Agency Worker Regulations,
TUPE and various health and safety regulations. It is currently
unclear how (if at all) Acts of Parliament would be affected,
although the Truss campaign is reportedly not planning to scrap the
Equality Act. There are serious concerns over whether it is
realistic to review such a large quantity of legislation within
such a tight timescale and with the proposed reduction in civil
service jobs. If the bill includes a hard deadline of the sort Ms
Truss proposes then we can expect an intense focus on employment
law over the coming months with considerable change potentially
ahead.

National Insurance and IR35

Liz Truss has pledged to reverse the National Insurance increase of 1.25% for working
age employees, their employers and the self-employed
that took
effect in April 2022. The increase was implemented due to the
introduction of the Health and Social Care (HSC)
Levy which was designed to help fund the NHS backlog following the
Covid-19 pandemic and the current crisis in social care. The
current plan is for the HSC levy to be formally separated from
National Insurance contributions from April 2023 and extended to
workers who are above state pension age. However, under Ms
Truss’ proposal the HSC levy would be scrapped entirely.

Ms Truss has also said that there would be a government review
of IR35 regulations if she became prime minister. Proposed IR35
reforms for the private sector took effect from April 2021 and represented
the biggest change to employment tax in decades. However, this
would not be the first time that IR35 has been reviewed, so it
remains to be seen whether any review conducted under Ms Truss’
leadership would result in any meaningful changes to the current
legislation.

Seasonal Worker visa scheme

The UK is currently experiencing a labour shortage. In May this
year, there were more job vacancies than unemployed people in the
UK for the first time since records began and certain sectors have
been particularly badly affected. One of these is agriculture,
where farmers have been struggling to find enough workers to
harvest seasonal crops such as fruit and vegetables. Poultry
processing is also likely to be under-resourced in the lead-up to
Christmas.

In what would be a positive step for the food and farming
sectors, Ms Truss has confirmed that she would support a short-term
expansion to the Seasonal Worker temporary work route. This visa
route gives overseas workers a visa to come to the UK to work in
horticulture for up to six months (assuming that they satisfy
certain eligibility criteria). It has recently been expanded to
allow for poultry processing workers to work in the UK between 3
October and 31 December each year.

Currently the scheme has an annual cap of 38,000 visas per year
for the edible and ornamental horticulture sector, and 2,000 visas
for the UK poultry processing sector. Under Liz Truss’
proposal, the scheme would be extended beyond its current expiry date in 2024 and the number of
visas available would be increased by an unspecified amount.

What next?

We will have to wait to see the full impact that Liz Truss’
leadership will have on employment law, and the details will
continue to emerge. However, it is clear that her premiership could
have very significant consequences for employers and employees.

As Ms Truss takes power, we are still awaiting the long-promised
Employment Bill and the Queen’s Speech back in May made no mention
of this. Whilst some proposals, such as those relating to neonatal
leave and tips, are now being progressed via Private Members’
bills, it seems quite unlikely that Ms Truss will prioritise the
implementation of the remaining measures expected to be included in
the bill. Instead, this could well be overtaken by the review of EU
retained law discussed above.

Finally, it can’t be ignored that Liz Truss has come to
power in the middle of a cost of living crisis and a very difficult
economic situation. The full impact of her administration on both
businesses and employees will partly depend on how she plans to
support struggling businesses and their staff and on the impact of
her policies on the economy as a whole.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.



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