Budget highlights for employment law
The "tough but fair" Budget announced by the Coalition
Government on 22 June has not thrown up too many employment law
issues, but some notable measures of interest to employers include
a potential shift in emphasis on the Default Retirement Age (DRA)
and a new way of uprating benefits.
As reported last month, the Government had confirmed its
intention to phase out the Default Retirement Age (DRA) as
expressed previously by both of the Coalition parties. However
during the Budget speech this was changed to a consultation on
"whether to phase out the Default Retirement Age". The Chancellor
announced that from April 2011 the majority of benefits, presumably
including Statutory Maternity Pay, Statutory Sick Pay etc will be
uprated in line with the Consumer Price Index rather than the
Retail Prices Index. This is to effect £6 billion a year in savings
without imposing a benefits freeze. The threshold at which
employers start to pay National Insurance will also rise by £21 per
week above indexation from April 2011. Additional savings are to be
made by freezing public sector pay and reviewing the pay of top
public sector bosses.
Separately on 21 June the Government also accepted the
recommendations of the Low Pay Commission regarding the National
Minimum Wage (NMW) rates for October 2010, including reducing
the age of the adult rate to include those aged 21, and
introducing a NMW for apprentices who are currently exempt. As
reported in
May's Employment law news these rates had already been accepted
by the previous government but the Coalition has confirmed they
will go ahead as expected.
