Coalition Government’s deregulation drive – which employment laws could be scrapped?

The coalition Government has called on the public to suggest which regulations “should be removed or changed” to make running a business or organisation simpler.

As employment law was seen by some as a growth area of regulation under the previous Government, it is likely to be a prominent target of the present coalition Government’s deregulation drive. In fact, the coalition’s Programme for Government singled out employment law as an area to be “reviewed”.

Although there is little detail about which employment laws are likely targets for review, the Programme for Government did state that it would end the “gold plating” of EU Directives. This refers to the claim that some regulations introduced by the previous Government to implement European Directives went beyond the minimum required. These regulations could be amended to take out any provisions not strictly required by the Directive they seek to implement. For example:

• The Transfer of Undertakings Protection of Employment Regulations 2006 (TUPE): TUPE 2006 extended the definition of a “relevant transfer” to include “service provision changes”, ie where certain activities are contracted in or out (including second-generation contracting out). In an article for the Employment Lawyers Association (ELA) prior to the election, the Conservatives’ then shadow business secretary, Lord Hunt, stated that a Conservative Government would seek to “rein in” this aspect of TUPE 2006, suggesting a possible repeal of this provision or amendments to limit its application.
• The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 and The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002: Both sets of Regulations were referred to by Lord Hunt in his ELA article as ones that would be stripped of their gold plating, although no details were given. Possible amendments include introducing a qualification period for part-time workers to achieve parity with full-time workers and excluding casual workers from the Part-Time Workers Regulations. Rights under the Fixed-Term Employees Regulations – for employees to request (1) a written statement of reasons for less favourable treatment and (2) a written statement confirming they are now a permanent employee – may also be subject to review.
• The Agency Worker Regulations 2010: Although not yet in force, these Regulations were singled out for criticism by the Conservative Party prior to the election. One aspect of the Regulations that proved contentious was their definition of pay. “Pay” is not defined in the Agency Workers Directive and the inclusion of overtime payments, holiday pay and commission within the Regulations’ definition was criticised as unnecessarily wide. It is possible, therefore, that this definition could be amended to limit “pay” to basic pay.

Unfortunately, there has been less indication of where the spotlight would fall on domestic legislation. Given the economic climate, it was not surprising that the only domestic law highlighted by Lord Hunt in his ELA article concerned redundancy; in particular, a desire to introduce a greater onus on employees to seek redeployment and the possibility of “rebalancing” the law so that the burden is no longer on employers to prove that an employee’s decision to refuse any alternative employment offered is unreasonable.

Full implementation of the Equality Act 2010 looks unlikely, given the Conservative Party’s opposition to the public sector socioeconomic duty and the private sector gender pay reporting provisions. The recent Quick Guides on the Equality Act produced by the Government Equalities Office do not refer to the recruitment and promotion aspects of the positive action provisions (which were also opposed by the Conservatives) and their implementation must now be in doubt.

Deregulation has always been a popular card for politicians to play and the coalition is following previous Governments’ attempts to reduce the regulatory burden on businesses. However, what is not clear at this stage is how the Government will achieve its aim of less regulation while extending flexible working to all employees, introducing shared parental leave and implementing the core provisions of the Equality Act, such as discrimination based on association and perception and third-party harassment. The overall effect of these proposals may mean that, in practice, there is no real reduction in employment legislation.

Becky Hodgkins, Partner in the Employment Department, Howes Percival LLP, solicitors

Related info

• Coalition agreement document: what the policies mean for employers
• Legal opinion: Can the Conservatives tamper with the Agency Workers Regulations?

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