With the general election finally over and bringing this year of turbulence and uncertainty to an end, it is time to take stock of what 2020 may hold for employers and employees alike.

With the Labour Party suffering its worst defeat in over 80 years it seems unlikely that Labour pledges around repealing restrictive trade union legislation or mandating worker directors to take up a third of all seats on company boards will be seeing the light of day any time soon. Instead the current system of corporate governance, as reflected in the updated 2018 FRC Code and where worker directors remain one of three options, is likely to remain the standard for corporate governance for the next five years. Far from being rolled back, trade union legislation is likely to be tightened further with a new law to ban all-out rail strikes, forcing transport unions like the RMT to guarantee a minimum number of services during future industrial action.

There are some employment related measures now entering force that are already on the statute books, the relevant regulation having pre-dated the election. The reduction of the ICE threshold from 10% to 2% comes into effect in April 2020, potentially leading to a major increase in the number of firms required to set up arrangements for the information and consultation of employees. Pay ratio reporting requirements are also now in effect, meaning that the first annual reports for the 2019 year coming out in early 2020 will have to include information on the CEO's single total figure of remuneration compared with the median, 25^th and 75^th percentile full-time equivalent remuneration of the company's UK employees.

Looking further ahead, the Conservative manifesto contained a number of other references worth noting given their new parliamentary majority. It pledged a review "to explore how we can better support the self-employed", looking at improving access to finance and credit, easier home working and changes to make the tax system easier to navigate – potentially looking at many of the proposals described in the IPA's report on good self-employment from last year.

The manifesto also pledged to create a new single labour market enforcement body for employment rights, combining powers from HMRC, Gangmasters and Labour Abuse Authority, Employment Standards Inspectorate, Health and Safety Executive, Equality and Human Rights Commission and others under a single organisation. This body would be tasked with investigating abuses such as non-payment of the minimum wage, though how effective it proves to be compared with the current system, given the myriad current problems with lack of awareness, inspection and enforcement of labour market regulations remains to be seen.

There are further pledges to allow gig economy workers to "request" more predictable contracts, but at the same time to "encourage flexible working and consult on making it the default unless employers have good reasons not to." In the trade-off between flexibility and security it seems the government has not yet committed itself, though there are certainly concerns that many in the cabinet favour a more flexible, less regulated labour market to undercut international competition in a future post-Brexit trade environment.

The Conservative manifesto did include warm words about "protecting employees from unfair policies and discriminatory treatment". However, the latest information suggests that the government will drop its pledges to include a reference to maintaining workers' rights in the Withdrawal Agreement Bill, instead opting to publish a separate bill on employment rights as part of the Queen's Speech. As the Withdrawal Agreement Bill now looks set to pass Parliament easily without any Labour votes, these commitments to employment rights which had been proposed to win over Labour MPs are now no longer needed.

What ultimately comes of existing employment rights will now depend largely on the outcome of the trade negotiations over the next 12 months. The EU will be keen to secure level playing field commitments from the UK in terms of employment, environmental and other standards as part of any trade deal that offers deep access to the EU market. However, given the Prime Minister has pledged to legislate to rule out any extension to the 12 month transitional period, and also given the low likelihood of securing anything more than a barebones trade agreement in such a short time period, it may well be that the resulting agreement doesn't provide many concrete guarantees for UK employment rights. Instead the future of labour market regulation in the UK will have to form part of a much wider debate about the future of the UK economy and which direction we want to go in – a highly regulated economy with high environmental, safety and employment standards closely aligned with the EU, or a low regulation economy with lowered environmental, safety and employment standards more closely aligned with the United States. This debate looks set to dominate British politics over the next five years.

 

Patrick Briône is Head of Policy & Research at the Involvement and Participation Association