Square Circle: A North/South Divide in Employment Law? | Alison Welsh

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A North/South Divide in Employment Law?

Following the landslide victory of the SNP in the general election, it leaves us wondering: to what extent could we see two sets of rules north and south of the border?

In the wake of the Scottish Referendum, The Smith Commission was set up to make proposals about devolution. The Commission suggested that, while most employment laws would remain under the control of Westminster, the administration and funding of the tribunal system should be devolved to the Scottish Parliament. This created a clear path for the impact of proposed devolution of increased powers on employment law; Scotland could gain the power to abolish tribunal fees, which could result in a sharp rise in claims against employers in Scotland.

Adopting these proposals regarding employment, the Scotland Bill was published on the 28 May and is being fast-tracked through Parliament. It is due to become law in early 2016, however, the tribunal funding outcome is not yet clear.

With the results of the general election, we are now left to question will employment laws remain broadly the same north and south of the border?  In May, Prime Minister David Cameron said that he was open to ‘sensible suggestions’ about devolving powers to Scotland. In the same month, the SNP announced that it had reached an agreement with the Scottish Trades Union Congress to call for Westminster to make further devolution to the Scottish Parliament of employment law a priority, including equality and trade union laws and the power to set a minimum wage.

Impact of devolvement on employers?
Currently, the vast majority of employment laws being the same for both Scotland and the rest of the UK means clearer understanding, consistency and reduced administration. This itself helps those companies with staff based in Scotland and England. Two sets of employment law rules could create complexity for employers who would have to deal with two sets of rules. This could cause a disparity between employees in Scotland compared with those in England with regard to their level of pay. Additionally, changes to equality legislation may result in employers having to apply different procedures depending on where an employee is located.

Overall, it appears as yet unclear just how substantial the impact of the SNP in Westminster will prove to be. The currently drafted Scotland Bill does not anticipate the devolvement of large-scale employment laws, although this could change.

In the meantime we have to deal with what is being presented in Employment Law. The next major issue for employers will be the introduction of the new National Minimum Wage for 25s and over in April next year of £7.20. This could be a huge impact on pay costs and could lead to all sorts of problems such as age discrimination. Employers would be advised to start looking at the impact on their budgets of this change and start planning ahead.

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As always, if you would like to explore any HR issues, then give us a call at Square Circle on
0141 248 7826 or email alison@squarecirclehr.com

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