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Implications for employers if Scotland votes yes to independence

"Nothing drastic will change before the 2016 elections, since the Scottish Government will be heavily engaged, together with its counterpart in Westminster, in negotiations over issues such as defence, currently, national debt and pensions.  There won't be much time to talk about employment law matters although some changes are highly likely from 2016 onwards, when we are likely to see a gradual divergence of employment law in the two countries, with Scotland potentially becoming more employee- and union-friendly. 

"If Scots then re-elect the SNP, some of the most recent reforms to employment rights may be revised. For example, the SNP's White Paper on independence contains proposals to restore the 90-day consultation period for large-scale redundancies, abolish the shares-for-rights scheme, and open consultation into increasing employee representation on boards, as well as quotas for female representation at board level.  The SNP has also committed itself to a living wage and to a minimum wage that rises in line with inflation.  There are also plans to create a Convention on Employment and Labour Relations, to encourage collaboration between employers, employee representatives and the government, based on the German model. The White Paper stresses the importance of inward investment, so an independent Scottish Government would need to walk a tight-rope between enhancing protections for employees and making Scotland an attractive place for employers.  Nevertheless, given that both SNP and Scottish Labour are left-of-centre parties, the direction of travel over the course of time seems likely to be towards more employee protection.

"Some large employers, especially in the retail and banking sectors, have raised concern at the prospect of operating under two employment regimes instead of a single one as at present. In the future, where Scottish employees are working under English contracts of employment, you may need to be mindful of developments in Scottish law, which could give overriding rights to employees. Also, at some point, businesses with employees in Scotland who currently operate with English law contracts will need to consider changing over to Scots Law.  As Scottish employment law changes, so businesses in Scotland may need different policies and contractual terms. 

"Perhaps the most immediate issue for employers will be their final salary pension schemes.  It would be a good idea to consider what may need to be done to smooth the transition from a single UK scheme for employees to separate Scottish and English schemes.  However, this process would be unlikely to complete ahead of independence." 

"The bulk of Nick's practice has always been advising clients in the financial and professional services sectors on the full range of their employment issues, including high-value discrimination and bonus claims. He has a particular speciality in advising on collective redundancies, having advised a national newspaper on a complex restructuring and the associated union consultation, worked on the redundancy programmes which followed two major investment banking mergers and managed a leading case on the law of collective redundancies in the Tribunal and EAT. Nick also frequently advises on the employment aspects of outsourcing and insolvency-related and other corporate transactions, and regularly speaks at internal and external seminars."


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