Pictured above: Fergal Dowling

Businesses across the Midlands are anxious to hear what the new coalition Government has in store to improve business confidence. Leading employment lawyer Fergal Dowling, partner and head of employment law at the Midlands' offices of law firm Irwin Mitchell, considers what could happen. 

The Conservatives' opposition to the proposed increased in National Insurance Contributions (NICs) from 2011 was much publicised prior to the election, with public support from major employers, who saw the proposed hike in NICs as a tax on jobs and potentially highly detrimental for a jobs market still only in the early stages of recovery. 

"This is an area where the Liberal Democrats have been in agreement with the Conservatives, so it comes as no surprise to see it feature among the Conservative Liberal Democrat coalition negotiations Agreements," says Fergal.  "I expect the details regarding NICs will be set out in the 'mini' budget due to be published shortly."

Another central plank of the Conservatives' policy has been on making efficiency savings in the public sector including freezing public sector pay and requiring highly paid officials to have their salary signed off independently. The cuts will inevitably lead to a hold on recruitment in certain public sector areas which may increase the use of temporary workers later in the term of the Government because they do not have the pension and benefits costs associated with recruiting permanent employees. 

An expected employment law reversal is over the Agency Workers Regulations published by the Labour Government in January 2010 and due to come into effect in October 2011. Throughout the Parliamentary process, the Conservatives raised concerns that the regulations would limit flexibility and increase the costs for businesses taking on temps and said that they would review the regulations if they came to power. In March this year, David Cameron submitted an Early Day Motion (formal motions put forward for debate in Parliament) calling for the regulations to be revoked. 

"The Conservatives are not alone in raising concerns over the regulations," adds Fergal.  "Employment law practitioners feel there are a number of questions over whether the regulations can operate effectively in practice. 

"While we consider recruitment and retention of staff, both parties are in agreement about phasing out the default retirement age. The coalition also intends to hold a review for establishing the date for the state pension age to rise to 66. This will not be before 2016 for men and 2020 for women.  

"Employers can expect developments in the area of immigration too. The Liberal Democrats and the Conservatives have agreed, for the sake of the coalition, to pursue the latter's policy of setting an annual limit on the number on non-EU economic migrants coming to the UK to work. Given the reliance in some industries on migrant labour, this may make things difficult for recruiters to fill positions and the CIPD has already raised concerns to that effect.  

"Returning attention to the EU zone, the coalition parties will look to limit the application of the Working Time Directive with the objective of supporting and encouraging UK workforce flexibility.

"While I recognise that employers are busy trading, my advice to them is to take the time to ensure their policies and procedures are compliant with the existing legal requirements and be ready to comply with any new legislation from the new government."