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Employment Law in an Independent Scotland

As we are now into “Referendum Year”, Grant Miller looks past the issues of the EU and currency and looks at the Employment Aspects contained in the White Paper.

The Scottish Government’s White Paper, published on 27 November, outlines the proposals for our future if the “Yes” vote secures a majority in the referendum on 18 September 2014.

With the polls narrowing, this looks like a good time to look at all eventualities for changes in the workplace.

Powers relating to employment legislation will transfer from Westminster to Holyrood in a post-independent Scotland, and the Scottish Government views this as an opportunity to create and support a valued and well-rewarded workforce.

What will happen to the Current Employment Law?

The White Paper confirms there would be no change to existing UK law immediately after independence. Following independence, the Scottish Government will consider the existing laws, deciding whether the new Scottish Government should make any changes and considering which specific laws are appropriate for an independent Scotland.  The White Paper also provides that Scotland will seek to be a full member of the EU (although that is another debate!). As such, it would be obliged to continue with the employment laws which stem from Europe.

Specific Proposals and Employment Protection

Independence, it is argued, will allow Scotland to utilise the countries resources and expertise to engage in constructive dialogue on a number of well publicised and controversial issues, such as the living wage, zero hours contracts and fair access to the justice in the Employment Tribunals. The White Paper identifies these topics as key issues to be addressed post-independence.

There is, however, no specific detail provided on what the proposals in these areas are. The White Paper remains silent on the controversial topic of Employment Tribunal fees, which were introduced by the coalition Government in July 2013. Initial statistics indicate a sharp decrease in the average number of claims lodged following the introduction of the fee regime. However, the full picture will not be clear for a number of months when all present claims have been fully processed through the system. It is encouraging to note that the White Paper states that employment law would be “tailored to Scotland’s needs”, which suggests Employment Tribunal fees are likely to be reconsidered provided evidence of a direct link between fees and restricted access to justice for Claimants is established in the coming months.

The White Paper also emphasises the importance of, and the Scottish Government’s dedication to, a valued and well-rewarded workforce.  Tackling poverty and inequality lie at the heart of the Scottish Government’s proposals, with a view to creating well rewarded and sustained employment for the benefit of both employees and employers. The Scottish Government states that it is absolutely vital for Scotland’s economy and society for all work to be paid fairly. Therefore, the living wage and minimum wage are central to their post-independence employment policy.

With this in mind, the proposals pledge maximum employment and better work opportunities for the entire workforce. In particular, the government plans to commit to fair pay through reforms to minimum wage calculations and a commitment to the living wage. 

Commitment to the Living Wage 

It is clear from the white paper that the Scottish Government will continue to support and take active steps to promote the living wage in an independent Scotland. The Scottish Government supports the Living Wage campaign which focuses on encouraging employers to reward their staff fairly. Currently, approximately 400,000 people in Scotland work for less than the living wage, this amounts to just under one fifth of the workforce in this country. In order to reduce these figures the Scottish Government is actively promoting the living wage, through funding of Poverty Alliance in order to produce a Living Wage Accreditation Scheme to promote the living wage particularly with the view of ensuring private companies make decent pay the norm.

Minimum Wage

In Scotland around 70,000 people currently receive the minimum wage. The value of this wage has not risen in real terms for the best part of a decade. In contrast, the cost of living since the recession has increased dramatically, and the minimum wage has failed miserably to keep up. With this in mind the Scottish Government proposes to commit firmly to increasing the national minimum wage at least in line with inflation each year.

The Fair Work Commission

The Scottish Government plans to set up a ‘Fair Work Commission’ in order to implement their proposal to increase the national minimum wage. The members of this commission will be drawn from businesses, trade unions and the wider society in general, and will advise the government on the minimum wage post independence.  In other words, the commission will deliver the mechanism for uprating Scotland’s national minimum wage.

National Convention on Employment and Labour Relations

A ‘National Convention on Employment and Labour Relations’ will also be established, bringing together labour market regulation and other employment related policies to a forum which will look to engage direct and constructive dialogue between all relevant parties. This could be seen to be a more pro-active version of ACAS and their current involvement in Employment disputes.

Female Equality at Work

The Scottish Government also proposes to take steps to ensure woman have equal opportunities in terms of both quality and number of jobs in Scotland post independence. The White Paper emphasises that greater action is needed to improve female representation on Company Boards. Following independence it would be on the agenda for the new Scottish Government to consult on a target for female representation at board level, and to take legislative action if necessary and appropriate.

The paper goes on to state that a more progressive attitude to gender balance, compared with the UK Government’s current aim of having the number of female woman on FTSE 100 company boards increased to 25% by 2015, is required. The White Paper suggests legislation in countries such as Belgium, France and Norway, which provide gender quotas for company boards, ought to be considered, with a view to creating similar legislation in Scotland.

Protecting Employees

In order to strengthen the position of employees, the Scottish Government proposes to reverse recent changes introduced at Westminster, which it argues reduce key aspects of individuals’ rights at work.

One proposal will look to restore a 90 days consultation period for redundancies affecting 100 or more employees (this was recently reduced to 45 days by the coalition Government).

The second is the abolition of the recently introduced ‘employee shareholder status’, which encourages employees to give up their employment rights in areas such as unfair dismissal and redundancy pay in return for shares in their employers company.

Summary

It is clear that the Scottish Government proposes to make a number of changes to employment law in an independent Scotland, and the landscape of employment law would no doubt change. Independence itself will provide the opportunity to address significant justice issues, which is obviously welcomed. Interesting times indeed, and time to debate the issues!

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