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July 7, 2015

Legal Issues – The Queen’s Speech

Following on from our previous report on the likely consequences of a Conservative government with an effective majority, the government has now set out its plans for the next 5 years in the Queen’s speech.

As expected, industrial relations was on the agenda with the proposed Trade Unions Bill which will introduce a turnout threshold of 50% for strike ballots. However, it will remain the case that a simple majority in favour is all that is required to pass the vote unless it relates to essential public services when 40% of those entitled to vote will need to vote in favour. The proposed repeal of the ban on using agency workers to cover for striking workers was not mentioned; whether this was simply omitted from the speech or from the government’s plans remains to be seen.

The government also set out plans for an Enterprise Bill capping redundancy pay to public sector workers and cutting red tape for businesses by at least £10 billion over the next 5 years. No additional information on how this would be achieved has been provided.

Further, the Immigration Bill will try to tackle exploitation. It will create an offence of illegal working and will enable wages to be seized as proceeds of crime.

As covered widely in the press, and following on from manifesto promises, the Conservatives are proposing to attempt to renegotiate EU membership and subsequently hold a referendum on the UK’s continued membership of the EU. This will be effected by the EU Referendum Bill which will provide for a referendum by the end of 2017.

One thing which appears to have been relegated in terms of priority is the proposed severance of the official link with the European Court of Human Rights and introduction of a British Bill of Rights in respect of which the UK courts would be the determinative body. The Queen’s speech referred to presenting proposals for reform in this area but went no further.

Zero Hours Contracts 
The day before the Queen’s Speech was delivered, the ban on exclusivity in zero hours contracts was brought into force with the first commencement order under the Small Business, Enterprise and Employment Act 2015.

Clause 145 of the Act inserts two new sections, 27A and 27B, into the Employment Rights Act 1996. These clauses make exclusivity clauses in zero hours contracts unenforceable and give the government wide-ranging powers to make further provisions in relation to zero hours contracts in the future.

In its response to the consultation on how to tackle avoidance of the new ban, the government stated that anti-avoidance rules would come in at the same time as the Act; however, none have been issued as yet. The proposals include thresholds in both hours and rates of pay below which exclusivity clauses will not be enforceable, penalties for employers seeking to avoid the ban and redress in the employment tribunal for workers who have suffered a detriment for working for another employer.

The government has also expressed an intention to develop sector specific guidance for the use of zero hours contracts.

Holiday Pay – the saga continues
In March, the Employment Tribunal issued its decision in Lock v British Gas Trading Ltd. It inserted new wording into Regulation 16(3) of the Working Time Regulations 1998 confirming that commission or similar payments should be included in holiday pay calculations in respect of the 4 weeks’ statutory holiday entitlement derived from the EU regulations. The decision followed that in Bear Scotland v Fulton which dealt with non-guaranteed overtime.

British Gas Trading Ltd have advised that they are appealing the tribunal’s decision on two grounds. Firstly, that commission and non-guaranteed overtime are not the same and should not necessarily be treated in the same way and the tribunal were, consequently, wrong to follow the Bear Scotland case. Secondly, that the Bear Scotland case was incorrectly decided in concluding that UK legislation can be interpreted in such a way as to give effect to EU law.

The EAT is not expected to hear this appeal until late this year.

Review of Tribunal Fees

On 12 June, the government announced the much anticipated review of tribunal fees. The review will look at how successfully the introduction of fees has met the original objectives both in terms of finances and the types of cases being raised. The review is expected to be completed later this year and will be followed by consultation on any recommendations for change.

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EH3 8HA