Government Coalition policies on employment law

Key points of interest for employers in the coalition agreement are:

• To phase out the default retirement age of 65 and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.
• The partial scrapping of next year’s 1 % National Insurance tax rise.
• Work to limit the application of the Working Time Directive in the UK.
• Establish an independent commission to review the long term affordability of public sector pensions, while protecting accrued rights.
• Increase the personal allowance for income tax from April 2011, with further steps to raise it to ¬£10,000 as a longer term objective.
• The Conservatives will recognise marriage (and civil partnership) in the tax system, but Lib Dems will abstain in Commons vote.
• Ending all existing welfare to work programmes and creating a single welfare to work programme to help all unemployed people get back to work; benefits to be conditional on willingness to work.

UK business groups have given a cautious welcome to the new coalition government proposals, but there is still uncertainty around policy in areas where the two parties differed in their manifestos.¬†¬†For example, the Government will be looking at the Equality Bill before its implementation in October 2010, because the Liberal Democrats were committed to enhancing the Act’s equal pay audit provisions and the Conservatives opposed in their entirety, and the Conservatives’ intention was to stop implementation of the “positive action” provisions of the Act previously supported by the LibDems.