Budget & Election Round Up

We have promised to keep you up to date with what the main political parties envisage would make a difference to our employment laws if they were to win the election.

The budget has little to offer in terms of employment law, however the following points should be noted:

•    The government will increase the national minimum wage to £6.70 this autumn with a view to it being over £8 by 2020.

•    National insurance contributions (NICs) will be abolished for under 21 year olds this April.   In April 2016, NICs will be abolished for employing a young apprentice. In the next Parliament, Class 2 NICs will be abolished for the self-employed.

The Government has also recently confirmed how it intends to tackle the abuse of “Zero Hours” contracts.  If any of you watched the live debates on television you will have seen Jeremy Paxman grill the Prime Minister on whether he could live on a zero hours contract.

The Prime Minister made reference to the bill which will prohibit employers using ‘exclusive’ zero hours contracts.  This is where employers include a provision in the contract that the worker cannot work for any other businesses at the same time.  If the bill is passed, which appears likely, this will be unlawful unless the worker is paid £20 or more per hour.

Generally there seems to be some misunderstanding regarding the use of these contracts.  The intention is not to ban them completely as they can be used quite legitimately for those workers who choose to supplement their income by way of a second job, or as the Prime Minister pointed out, to workers such as students.  The changes proposed in this bill should be welcomed as there has been some abuse of the zero hours contract where a worker is ‘tied’ to a business but with no guarantee of regular work.

Employers need to review their zero hours contracts to ensure they are compliant with this new law when it comes in.

If you would like to discuss any of your employoment contracts, please do not hesitate to contact any member of the Emplyoment team.