HM Insights

Employment relations top the bill in 2015

2014 was a year in which sporting and cultural celebration brought Scotland closer together, while political debate split us almost down the middle. An improving economy and encouraging employment figures suggest that, whatever their political persuasion, the nation's businesses and employers can look forward to 2015 with optimism. However, politics will still be a major factor for employers and employees alike in defining workplace relations.

Earlier this year the right to flexible working increased for all, aimed at bringing a more continental-like culture to the workplace. This liberal ethos will continue in 2015 with the introduction of shared parental leave for parents of children expecting or to adopt from 5 April 2015.  Traditional maternity or adoption leave will be capable of being ended, with the balance converted to parental leave that can be shared by both parents. This will bring a significant administrative burden, planning challenges and risk factors, including potential discrimination complaints. New policies, supporting documentation and training will be necessary for managers of all levels.  

The general election in May will inevitably bring change, but an analysis of the various party manifestos discloses that the Conservatives propose to legislate to end "exclusive" zero hours contracts.  More significant is the proposal to make it more difficult to conduct strikes. On one view this is questionable given that employment relations in general, but particularly in Scotland, tend at present to be more collaborative than confrontational. In light of the present dilution of individual employment rights it is not surprising that the present Conservative-led administration will further attempt to alter the landscape of employment relations.

Employment tribunal fees, which have unquestionably diluted the effectiveness of individual rights, will likely continue to be attacked in the courts by Unison who may appeal an unsuccessful attempt at judicial review of the Westminster government's most draconian measure (it now costs £1200 to pursue certain claims). This may be less necessary if Labour obtain a majority or a role in government, given that they are pledging to reform employment tribunal fees, to provide a fairer system and better access to justice. Of course if the Smith Commission's proposal to devolve tribunals, including employment tribunals, to Scotland is actioned then the Scottish Government could possibly introduce more significant change.    

As the Smith Commission proposals do not devolve employment rights to Scotland, the Labour manifesto's rather intriguing proposal of "equal rights for self employed individuals" could be very interesting for sectors such as the oil and gas industry that typically utilise a high number of contractors. Often people are content to sacrifice or forego rights for advantageous working relationships and a beneficial tax and national insurance regime. Increased rights and an unchanged taxation regime would be intriguing. 

Recently, we have seen political influence through soft regulation by both Scottish Government and Glasgow City Council adopting the "living wage" and adopting a procurement principle that businesses wishing to contract with them must adopt the "living wage", effectively increasing low-end pay from £6.50 per hour to £7.85 per hour in a number of organisations. This social measure may in turn have a significant impact on how employers measure and set payscales throughout their organisations.

A potentially more significant proposal contained within the Smith Commission report would allow Scottish Government to introduce lawful gender quotas for public bodies in Scotland. At present it is unlawful for any employer to adopt a gender quota for boards, committees, or otherwise within the workplace, because to do so would lead to an infringement of the Equality Act 2010. Positive discrimination is, at present unlawful in most circumstances, however positive action can be permissible. Positive action means preferring a person from an underrepresented gender or minority group if they are as qualified for the role or post that is being recruited for as another person. Recent studies have shown that difficulties still exist in equality of pay and in equality of opportunities for females.  The proposal to permit gender quotas for public bodies will allow public employers to ensure that more opportunities will exist for senior roles to be filled by females.     

Before any such changes take place we will have the next instalment in the long running saga over calculating holiday pay. In February 2015, the Employment Appeal Tribunal will consider whether or not the European Court of Justice's ruling in the case of Lock –v- British Gas Trading Ltd can see commission included in the calculation of holiday pay under UK legislation, as it must be under the Working Time Directive.

Having a more competitive and productive Scotland is good for everyone, and the extent to which the rights and obligations are shaped within the employment relationship is important to our shared aspirations and performance. No matter who holds power, it's sure to be interesting times.

Bruce Caldow is a Partner at Harper Macleod LLP and heads the firm's Employment Team