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Coalition agreement: employment implications

24 May 2010 #Employment

The new coalition Government has today published its key policy plans. The plans are stated as being based on central principles of "freedom, fairness and responsibility" and cover a breadth of issues from banking to immigration.

Whilst we are yet to be provided with details in relation to the policies and how they will work in practice, a number of the plans should be noted for their employment implications. We set out some key areas to note below.

The Government sets out its intention to make society more family friendly. Shared parenting will be encouraged from the earliest stages of pregnancy, and this will include a system of flexible parental leave. As yet we do not know exactly what this will be.

In addition, the government plans to extend the right to request flexible working to all employees. It is not yet clear whether the Government intends to introduce this immediately or on a phased basis.

The policy document also states an intention to promote equal pay and take a range of measures to end discrimination in the workplace. Little information is provided as to how this will be achieved; however the Government says that it will undertake a fair pay review in the public sector to implement its policy that the highest paid person in an organisation is paid not more than 20 times the lowest paid. The Government also intends to look to promote gender equality on the boards of listed companies.

The coalition agreement states that the default retirement age will be phased out; however we are not told when this would happen. A review will also be carried out to look at when the state pension age should start to rise to 66. The agreement states that this will not happen sooner than 2016 for men and 2020 for women.

A number of key tax measures are set out by the Government. This includes substantially increasing the income tax personal allowance (currently £6,475) from April 2011. The long-term objective is to raise the personal allowance to £10,000 and this will be prioritised over other tax cuts. The increase in the employee (primary) National Insurance Contributions threshold (previously proposed by the Conservatives in their campaign) has been dropped, to fund the increased personal allowance. However, the employer`s (secondary) National Insurance Contributions threshold will go up by £21 a week.

The banking system is to be reformed and this is to include "robust action" to tackle "unacceptable bonuses". Again, the nature of this reform and exactly what robust action means is unclear.

Finally, the Government intends to establish a commission to look at creating a British Bill of Rights, incorporating and building on obligations under European Convention on Human Rights.

For full details of the coalition agreement see:

In the meantime, it is a case of "watching this space" for further details of the Government`s plans and the practical implications going forward. The situation may become clearer following the Queen`s speech on 25 May and the emergency Budget on 22 June and we will keep you updated as to any developments.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
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