UK general election: what would a hung parliament mean for employers and employees?

The prospect of a hung parliament – where no political party has an overall majority – is looming. But what would it mean for employers and employees? Tara Craig asked some interested parties about the implications.

As recently as a month ago, most people assumed we were heading for a Conservative general election win. But a series of setbacks, not least the scandal surrounding MPs’ expenses, has whittled away the party’s lead. The latest daily YouGov poll found the Conservatives just five points ahead of Labour – a significant drop over the last few weeks (they were 12 points ahead on 19 February).

Jo Stubbs, employment law editor,

A hung parliament would make it harder to pass legislation, so there would likely be less scope for major reforms in the employment law arena than if one party held the overall majority.

The opposition parties almost certainly have proposals for reforming certain elements of employment legislation – we had, for example, Conservative Ken Clarke talking last autumn about a “one in, one out” system for employment law. However, a hung parliament could mean that these plans never reach fruition. So it could be very much business as usual. 

Guy Pink, HR director,

Whoever forms the next government needs to reduce, not introduce, the plethora of employment law in place. TUPE needs a complete overhaul – it is lawyers who benefit most from this badly drafted legislation. Tidying this up and reducing the onus on employers would be a start. I work for a voluntary organisation that competes for statutory sector contracts, and so I think the Government Code of Practice on Workforce Matters should be abolished – its intention of avoiding a two-tier workforce is wholly unrealistic.

The whole tribunal system is a mess and badly needs to be reviewed so that frivolous claims are thrown out right at the outset. Bring in a bond so people have to show serious intent before proceeding. When Acas works it is brilliant, but the quality of support is patchy around the country and needs greater consistency.

If there is one piece of employment law that could be introduced, how about one day a year when you can dismiss one employee without having to go through the hoops and hurdles and knowing that there won’t be any comeback. Now that would be popular with employers.

‘Less’ rather than ‘more’ should be the mantra for any incoming government. Give us well drafted, commonsense law that helps us manage our workforce without too much interference from the state.

Stuart Duff, partner, head of development, Pearn Kandola

Psychologically, people are better equipped to handle certainty and clarity. A hung parliament creates uncertainty. While uncertainty can at times be healthy and positive (coalitions often result in more open discussions and better-reasoned legislation), in the current climate most employers will undoubtedly wait and watch, fearing the worst.

The term ‘hung’ for many equals indecisive, so in the mind of the employer, this could signal a slower and more nervous return from recession, or worse, the trigger for the dreaded double-dip recession. This in turn would result in increased job insecurity and lowered expectations for remuneration in the mind of the employee.

Having begun the long journey out of the negative pessimism of the last couple of years, many employees could feel that they’re moving backwards and returning to the familiar feelings of uncertainty and caution.

Duncan Brown, director, HR business development, Institute for Employment Studies

It’s been so long since we have had a coalition government, the simple answer is that nobody really knows the impact that a hung parliament would have on the country. [Could it be] the prelude to a new era of political and industrial co-operation and harmony, as the proponents of electoral reform and proportional representation might lead us to believe? The end of John Major’s tiny majority government and the experiences of Italy since the Second World War would suggest the opposite.

The uncertainty would spook the markets and lead to a run on the pound, driving the UK down the dreaded double-dip recession, which would be bad news for all of us. That is one of the reasons a hung parliament is so rare – once we realise the consequences, we all tend to vote so as to avoid it. 

John Philpott, chief economist, Chartered Institute of Personnel and Development

A hung parliament is unlikely to make much immediate difference to day-to-day life in most UK workplaces. Life will go on much as usual. Any longer-term impact will depend on how an electoral stalemate affects the conduct of government and the formulation of economic and employment policy.

One can imagine three main potential outcomes: a weak minority government formed by the single largest party, struggling from crisis to crisis; a fragile coalition government that finds it hard to agree on policy priorities; or a strong grand coalition with a clear common purpose.

Given the nature of UK politics, the latter outcome is the least likely, suggesting that a hung parliament would be followed by a period of policy paralysis ahead of another general election. This will create uncertainty for private sector workplaces – possible stymying decisions on recruitment and investment in skills – and further unsettling public sector workplaces as they grapple with the prospect of big budget cuts. Such an outcome is not ideal at a time of what is anyway likely to be an anaemic economic recovery.

Richard Rowney, group chief operating officer, Liverpool Victoria (LV=)

For businesses, a hung parliament would be the worst possible outcome to this election. We need a mandate, not political uncertainty. We’re moving into uncharted territories.

Paul Callaghan, partner, Taylor Wessing

For many a hung parliament is a disconcerting prospect. However, employers can be reassured that it could mean fewer changes to employment law than if a single party wins with a strong majority.

A minority Conservative government, or a Conservative/Liberal Democrat coalition, could be hesitant to risk alienating voters by pursuing anti-employee measures – like withdrawal from the social chapter. The Equalities Act would most likely remain unchanged from the version expected to pass before the election. On the flip side, Labour’s plans to extend flexible working rights would probably be shelved.

If Labour scrapes a win, probably with a minority government, then we can expect it to pursue its current employment agenda. As the Lib Dems broadly support this agenda, a Labour/Lib Dem majority would most likely lead to a continuation of current plans.


Coming up in Personnel Today and online

A three-part series looking at the UK’s three main political parties, and what their election would mean for employers and employees.

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