Greatest extension of workers’ rights or a great big headache for SMEs?

Theresa May
Foreign and Commonwealth Office
Gemma Tumelty
Managing Director
The HR Dept Ltd.
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Theresa May’s announcement today is being heralded in some quarters as the great expansion of workers’ rights. So does this mean it is unfriendly to SME businesses?

We don’t think so – the one thing businesses do not like is uncertainty and we now know that the EU-based employment laws that we currently have are here to stay.

However we are sure that many will be disappointed that Working Time Regulations are not set to be simplified.

Tackling the ‘gig economy’

We are also delighted that the so called ‘gig economy’ is being tackled. Recent tribunal cases have shown that forcing people into self-employment and denying them basic rights is bad for business.

The proposed changes mean they would now get holiday, maternity, paternity and holiday pay. SMEs will also welcome the certainty in the announcement that the National Living Wage will increase in line with average earnings until 2022, rather than through shock Budget announcements annually.

There are some interesting and caring policies announced which, although being subject to consultation before they become law, demonstrate the depth of our social care crisis and the need to find non-financial solutions.

With six million employees currently trying to manage work and care simultaneously, the proposed unpaid sabbatical to care for severely ill dependents – based on a system from Ireland – will be welcomed by some.

This might seem hard for small businesses to manage but any SMEs owners concerned about this should realise that the unpaid nature of the sabbatical is likely to mean that take-up is relatively low.

We believe that the consultation needs to explore how much notice is required before leave is taken, to give the business time to recruit. Also, what happens to that replacement if the employee on sabbatical wishes to return to work sooner than initially agreed?

Extension of the Equality Act

Another interesting proposal announced by the Conservatives today is the extension of the Equality Act to give protection to people with short-term fluctuating or intermittent mental health issues.

Currently the discrimination protection only applies to those with long-term issues that affect their ability to perform day-to-day tasks. But with one in four people in the workplace now suffering from mental health issues this does seem like an appropriately supportive plan.

Other statutory changes

With more than 6,000 customers across the UK and Ireland, The HR Dept does not know of one company that is not entirely supportive to staff who have the misfortune to lose a child.

So it is nice to see that statutory leave becomes a right for every worker. But if anything, the proposal is less than most companies already give, including staged return to work. Another statutory change will be the right for staff to take unpaid leave for training – this one will need to be very clearly defined. We cannot imagine too many employers will welcome this, unless the training was a benefit for their business too.

We do hope that the reforms that give The Pension Regulator new powers and make the wicked breaches that deprived long-serving staff of their pensions a criminal act.

To conclude

So overall our initial reaction to these policy proposals from the Conservatives today is that they are fair.

However, we do hope the changes to the ‘gig economy’ go one step further and we get rid of the ‘Worker’ status altogether. We suggest replacing it with a simple ‘employed’ status – be they full time, part time, fixed term or casual.

This will be easier for business owners to manage, leaving them more time to grow their businesses.

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