Election uncertainty affecting employers
17th March, 2015
UNCERTAINTY surrounding the forthcoming general election is affecting the way in which companies are taking on staff, according to a leading law firm.
Employment experts at Ward Hadaway in Leeds say that whilst most growing companies have not been put off hiring more workers by the prospect of the May election, they are examining carefully how they take those extra staff members on.
The comments came as the build-up continues to the Yorkshire Fastest 50 Awards, the annual event recognising and highlighting the fastest growing privately owned companies in Yorkshire which Ward Hadaway organises in association with The Yorkshire Post and which takes place this Friday (March 20).
Harmajinder Hayre, Partner in the Employment Team at Ward Hadaway in Leeds, said businesses in Yorkshire and across the country are taking on extra staff where they have the demand, but are being careful of the terms in which they engage those workers as they are mindful of the potential changes which the election could herald.
He said: “I think the uncertainty posed by the forthcoming election – particularly in relation to the result and hence the shape and make-up of the next Government – will have an influence on how employers will take on more staff.
“For example, there is a big issue around zero hours contracts, which are still quite heavily used by employers, particularly those businesses which experience fluctuations in demand or which are looking to expand quickly.
“Both the Conservatives and Labour seem to be saying they want to dilute the effectiveness of zero hours contracts with the Conservatives pledging to end exclusivity clauses in zero hours contracts and Labour promising to restrict the use of such contracts. As a result, we may see fewer employers using zero hours contracts, which have proved to be popular with businesses, if controversial to some observers.
“However, I believe businesses will still want to take on staff, albeit on different terms. So, for example, companies may prefer to source their additional workers from agencies rather than employ them directly as they are unsure of what policies a new Government may bring in that will affect permanent employees.”
With employment law one area where the current Coalition Government has had quite an impact, the potential for a similar level of change from the next Government is very much present.
Harmajinder explained: “There has been quite a lot of change over the past five years when it comes to the workplace.
“Before the current Government came in, the system was geared more in favour of the employee in terms of the rights that they had.
“In the last five years, there has been a gradual swing the other way in favour of the employer with measures including workers having to be employed for two years by the same employer before making an unfair dismissal claim, the introduction of fees for Employment Trinbunal cases and mandatory early conciliation hearings before a case can proceed to the Employment Tribunal.
“Taken together, these measures have created more hurdles for employees to clear in order to seek redress from the courts and they have freed up a lot more of the employer’s time to manage and run their business rather than having to deal with red tape and administration.”
Further changes could be on the way in the next Parliament with both main parties committing themselves to a raft of different policies affecting areas including trade union representation, maternity and paternity rights at work and wages.
Harmajinder said: “Regardless of the result of May’s election, I think we can fairly safely say that things will not stay still in employment law and this will inevitably have an effect on how companies operate and how they grow.
“I think as far as employers are concerned – especially fast-growing businesses – flexibility is the key and is what they want to have most from politicians.
“All employers want to operate fairly, but they want to be able to pick and choose how they source their labour with a mixed range of sources at their disposal and they want certainty on the methods and terms on which they engage with employees.”
The winners of the Yorkshire Fastest 50 Awards for 2015 will be revealed in a ceremony this Friday (20 March).
BBC Breakfast business reporter Steph McGovern will be the special guest at the event, which takes place at Aspire in Leeds.
* Find out more about the Fastest 50 Awards.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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