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Was Theresa May’s premiership good for employers?

25 Jul 2019 By Elizabeth Howlett

From gender pay to migration muddles, we take stock of the former prime minister’s legacy among the UK’s workplaces

Boris Johnson entered Downing Street yesterday promising to take the UK out of Europe on 31 October, “no ifs, no buts”, in a speech that focused heavily on Brexit.

But when it comes to policies affecting businesses and working life, it is not yet clear what the priorities of Johnson and his new cabinet – which include Andrea Leadsom as business secretary, Priti Patel as home secretary and Amber Rudd, who remains secretary of state for work and pensions – will be.

Despite the overwhelming focus on Brexit during her tenure, former prime minister Theresa May did introduce a raft of workplace-focused policies that the new administration now inherits. People Management takes stock of the last three years and looks at the legacy May leaves behind.

Gender pay reporting 

When it came to work, one of the defining policies of May’s administration was gender pay gap reporting, a requirement introduced in 2017 for all companies with 250 or more staff to reveal the median average pay of male and female members of staff. The first round of reporting revealed 77.1 per cent of firms paid men more than women, a figure that increased to 77.8 per cent in 2018-19

While broadly seen as a positive step, the reporting rules were not without their critics. They did not, for example, require businesses to publish an explanation or action plan to address the gap – something many stakeholders called for – and the validity of the metrics were also called into question.

May was also criticised for refusing to expand reporting requirements to smaller companies.

Ethnicity pay reporting 

A natural next step after gender pay reporting was to examine race, and in 2018 May launched a consultation on whether mandatory ethnicity pay gap reporting could help identify a gap between the career prospects of black, Asian and minority ethnic workers and their white colleagues. The results of this consultation are yet to be published and, before May left office, were expected some time this year – alongside legislation to bring reporting into force.

The idea of ethnicity pay gap reporting has been more broadly welcomed than gender pay, although organisations have raised concerns that collecting ethnicity data could be too intrusive, and that employees may not want to share their data.

Boardroom diversity

Following on from Lord Davies’ review to increase the proportion of women on FTSE 100 boards by 2015, and the Hampton-Alexander review into increasing the number of women in senior positions in FTSE 350 companies, May’s government has supported efforts to increase the representation of women on boards.

Following her tenure, the FTSE 100 is now on track to meet the target set by the Hampton-Alexander review of a third of board posts being occupied by women, although ethnic diversity is still lacking. 

In November last year, May changed the focus to lower-paid women, setting aside £600,000 to support marginalised women and disadvantaged people returning to work. 

Corporate governance

During her leadership campaign, May pledged to put both consumer and worker representatives on boards. But when she eventually announced her plans to overhaul corporate governance in 2017, they were criticised for being watered down.

The story was similar when it came to efforts to curb executive pay. In 2018, a parliamentary committee called for businesses to be forced to publish and justify the pay difference between their CEO and average worker – commonly referred to as pay-ratio reporting – among other governance reforms. However, the government has largely disregarded these recommendations.

Good Work Plan 

In 2017, the Taylor review produced a plethora of recommendations for bringing modern working practices into law, reflecting the fact that much current legislation does not reflect agile working practices or more widespread forms of self-employment. 

The government eventually responded by launching the Good Work Plan in January 2017, accepting 51 of the review’s 53 recommendations, including scrapping the Swedish derogation practices that govern agency workers and introducing requirements to provide a statement of rights to employees from day one. 

In the last few weeks, May’s government has announced a number of other policy changes as part of this overhaul, however much of the Good Work Plan has yet to enter the statute books.

Brexit 

Throughout May’s premiership – and into Johnsons’ – there has been uncertainty over the availability of migrant labour post-Brexit.

Some of this was elucidated in December 2018 when, after much delay, the government published its immigration white paper outlining an ‘Australian style’ system – however, as May left office there was still uncertainty over the earning thresholds that would govern which migrants were able to enter the country in future. Many business organisations have been calling for these to be lower than the £30,000 currently required by the majority of non-EU migrants applying for a Tier 2 visa.

May’s government also announced a settled status scheme to protect EU nationals currently living in the UK, and in January there was an unexpected announcement that, in the case of a no-deal Brexit, any EU nationals arriving after the separation date would need to apply for temporary leave to remain to stay more than three months.

Over the course of May’s leadership, the number of EU migrants entering the UK has steadily declined, falling to its lowest levels in a decade this year.

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