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Queen’s Speech promises employment changes. Pearson May News Update - Wednesday 26 May
- Business reaction to the Queen’s Speech
- Queen’s Speech promises employment changes
- Queen’s Speech confirms tax plans
- HMRC announces new advisory fuel rates
Queen’s Speech promises employment changes
An extension of the right of employees to request flexible working and a faster than planned raising of the state retirement age both formed part of the new coalition government's first Queen's Speech.
Plans unveiled by the government could eventually see the right to ask for flexible working patterns broadened to include all workers.
The Speech noted the government's wish to "remove barriers" and "extend" flexible working rights.
At the moment, parents with children up to the age of 16 and parents with disabled children up to the age of 18 are entitled to ask their employers if they can work in more flexible ways, provided they already have 26 weeks of employment.
Under the law, employers are obliged to give serious consideration to such requests, which may involve shifts, working from home, rearranging start and finishing hours and part-time employment. But they can refuse requests if there are good business reasons for doing so.
It is thought unlikely, however, that any changes will be introduced during the present Parliamentary session.
The government is to put the proposal out to consultation to determine how best any extension could be implemented.
On equal pay, the government has said that it will work to reduce the gap between men's and women's earnings, and to "take a range of measures to end discrimination in the workplace".
The Pensions and Savings Bill may include recommendations made by a review of the state pension that is now being conducted.
This could see an acceleration of plans to push the retirement age up to 66 by 2024, and then to increase it, by a year at 10-year stages, to 68 by 2046.
The review is to study whether that planned schedule has been rendered outmoded by increases in the length of working lives.
The Bill will introduce the review's findings if those conclude that the original timetable is no longer appropriate. But the government has already promised not to make the move to a state retirement age of 66 "sooner than 2016 for men and 2020 for women".
The default retirement looks likely to be phased out.
The Bill will also restore the link between the basic state pension and the rise in average earnings as from 2011.
As a proportion of earnings, the state pension has dropped in value from 26 per cent to 16 per cent after the previous link was abolished in 1980 and replaced with a link to inflation as measured by the Retail Prices Index.
Additionally, pensions will increase by the "higher of earnings, prices or 2.5 per cent".
The Welfare Reform Bill will also have implications for employers and employees.
It will create a single welfare-to-work programme, improve incentives to work among the jobless, and make the benefits system simpler to manage. One effect of this may be to place increased onus on employers when it comes to assessing the level of incapacity among employees who take long-term sick leave and to conducting a return-to-work programme.
There is also to be a cap on the numbers of migrants arriving from non-EU countries.
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