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The employment law year in review: politics, populism and disruption

Written by
Lewis Silkin, widely recognised as the UK’s leading specialist employment law practice.
Authors
Colin Leckey
Partner - United Kingdom
Lewis Silkin
United Kingdom
20.02.20
5
This series of articles looks back thematically at the employment law year, incorporating contributions from Ius Laboris member firms across the alliance. The first part covers political developments.

Whilst much of the globe seems riven by political instability, the world of work is likewise in the throes of major upheaval, with the international relocation of traditional manufacturing, technological developments promoting new ways of working, big-data driven initiatives, and the internet of things and robotics poised to revolutionise working. Climate change is beginning to make its impact felt, with the recent Australian fires underlining the importance of taking action. Although some of this turbulence found expression in employment law developments in 2019, many of the implications for the global workplace are yet to become apparent.

The last few years have seen disruption to the established political order and a rise in populism with various employment law implications.

Populist ideologies divide society into two opposing groups, the ‘people’ versus the ‘elite’, and argue that politics should be an expression of the will of the ‘people’. Populists might be ‘cultural’ (typically right-wing) populists, focussing on immigrants, criminals, ethnic and religious minorities and cosmopolitan elites as outsiders, whilst ‘native’ members of the nation state are ‘the people’. Or, they might be ‘socio-economic’ (typically left-wing) populists which view big business and capital owners as outsiders propping up an international capitalist system at the expense of the working class.

Right-wing cultural populist governments normally herald reduced rights for unions and a reduction in employment protection, although in Europe, the supremacy of EU law restricts any meaningful reduction in equality laws or the employment rights of minorities. Left wing socio-economic populist governments tend to result in enhanced collective and individual workplace rights. For example, in Mexico, the left-wing López Obrador administration enacted a labour reform bill in May 2019 that included enhanced collective bargaining rights, freedom of association and protection for unions from employer interference. This was, ironically, helped by a right-wing populist, US President Donald Trump. Mexico had promised to overhaul employment laws as part of USMCA, the new trade deal Trump negotiated with Mexico and Canada to replace NAFTA. The intention was to improve working conditions in Mexico, to reduce the incentives for US manufacturers to move jobs from the US to Mexico.

By contrast to Mexico, since 1 January 2019, Jair Bolsonaro, a far-right populist, has been president of Brazil, and trade union rights have been reduced, with a removal of the mandatory requirement for employees to pay union fees.

So far, so traditional: right wing governments reduce employment rights, left wing ones increase them; does the addition of the word ‘populist’ really change anything? Look closer, and the tensions in populist movements can produce more intriguing variations. In Poland, where the right-wing populist Law and Justice Party (in power since 2015) has an openly negative attitude towards LGBT+ rights and immigrants, it has nevertheless introduced changes to the Labour Code that are expected to make it easier to claim discrimination on a much wider range of grounds than required by EU law. Even more significantly, Poland stands out as a right- wing populist government with more amicable union/government relations than its predecessor, an improvement mainly reflecting links with Poland’s largest trade union, Solidarność. This close relationship has resulted in enhanced union rights and, in return, union support for the government in industrial relations conflicts.

And so to the UK, where the Conservative Party’s landslide victory in the December 2019 election (based on an unlikely coalition of longstanding safe seats that have historically backed a deregulatory ideology, and formerly Labour-supporting constituencies with high levels of public sector and traditional manufacturing employment) poses a fascinating question as to where UK employment law will now head. The 2016 Brexit vote, which triggered this sea change in British politics, contained elements of cultural populism, in particular, anti-immigration sentiment combined with anger at a liberal London elite. The Conservative manifesto was sparse on the subject of employment law. It did though contain elements both indicating a shift towards support for government intervention and greater employment rights, such as a promise to increase the minimum wage to GBP 10.50, and to create a single enforcement body with powers to crack down on any employer abusing employment law, and also indicating an intent to stick with the party’s traditional deregulatory approach, such as commitments to reduce red tape and limit the burdens on small employers. The same is true of immigration law, where a promise to introduce an Australian-style points based system has been balanced by the quiet dropping of annual immigration targets. Will either of these ideological strands become dominant? Time will tell.

As to Brexit, the UK officially left the EU on 31 January 2020 and is now in a transition period, during which EU law will largely continue to apply as before. The transition period is set to end on 31 December 2020 and, whilst the divorce deal struck between the EU and the UK allows for the possibility of an extension, the UK government has categorically ruled this out. Only if the transition period is extended will the UK be obliged to implement certain key EU employment directives, such as the Whistleblowing Directive and the Transparent and Predictable Working Conditions Directive. It remains to be seen if the EU and UK can reach agreement on the terms of a new trade deal between now and then. The UK government dropped commitments to protect EU-derived workers’ rights from the EU (Withdrawal Agreement) Act 2020 after winning its election victory, but if an agreement is reached, it is possible that some degree of regulatory alignment on employment rights may yet be part of it: the Political Declaration, which forms the basis for trade talks, commits the UK government to maintain a high standard of workers’ rights.

Immigration remains a key concern throughout Europe. In Germany, new legislation has been passed (and will for the most part come into force in 2020) which intends to make it easier for companies to employ qualified skilled workers from non-EEA countries.

In France, the Prime Minister announced measures to strengthen French immigration policy which would ultimately mean fewer rights for refugee claimants and illegal immigrants and, potentially, new quotas. Belgium changed its system for non- EEA nationals in 2019, so that it no longer distinguishes between the right to work and the right to reside, and instead has a single permit. New conditions for employing non-EEA nationals also took effect during 2019.

Ireland also changed its requirements in January 2020, meaning that the salary thresholds for critical skills employment permits have increased and longer labour market test advertising periods will be introduced for some general employment permits. EEA and Swiss nationals and their family members who are living in the UK will have until 30 June 2021 to apply under the EU Settlement Scheme to continue to have a lawful basis to stay in the UK.

There are also provisions for some family members who are living abroad or who are born after the main closure date to apply under the scheme after 30 June 2021. There are broadly equivalent schemes for UK nationals and their family members who are living and working in the EEA or Switzerland. Post-Brexit, the UK government plans to implement a ‘skills based’ immigration system.

Aside from the EU-UK trade talks, the big event of 2020 will be the US presidential election. The Democrats are in the process of selecting their candidate, and employment rights are a focus of debate. Of the leading contenders, Joe Biden is in favour of laws to ‘allow labor unions to flourish’, a ban on non-compete agreements, a USD 15 an hour minimum wage (currently USD 7.25 and frozen since 2009), measures to ensure workers can discuss their pay without retaliation and stronger protections against wage theft. Bernie Sanders has also championed promised various employment law reforms, including a USD 15 an hour minimum wage and new laws to facilitate unions, paid family leave and gender pay equity. Elizabeth Warren has a long list of policy proposals which includes the right for gig economy workers to unionise, for unions to bargain at a sector level for the whole industry not just one workplace and banning laws that allow employees to opt out of paying union fees in unionised workplaces, even though they get the benefits of collective bargaining. She also wants ‘billion-dollar corporations’ to reserve 40% of their board seats for employees, and to ban non-compete clauses, non-poaching agreements and mandatory arbitration clauses. She also wants to ban the misclassification of employees as independent contractors, and increase penalties and boost funding for agencies enforcing labour laws. Even if one of these candidates is elected President, however, it is not certain he or she could achieve everything proposed.

Hong Kong has had a turbulent year, with massive protests on the controversial Extradition Bill and the perceived erosion of human rights and freedoms. Employers have been impacted in many ways, from having to consider measures to protect their employees’ safety, to dealing with employees wanting to take time off to protest or strike.