News & Views

Independence referendum: impact for employers

BY Sarah Mennie
Employment law
BG Purple

With the referendum on Scottish independence less than a year away the Scottish Government has released its White Paper; “Scotland’s Future: Your Guide to an Independent Scotland”.

The White Paper sets out how the Scottish Government intend to implement independence following a ‘Yes’ vote, albeit that this will be conditional upon successful negotiations with the rest of the UK.  The White Paper also details reforms that the Scottish National Party (SNP) would hope to introduce if they are successful in the first Scottish Parliament election in May 2016. The majority of the substantive proposals within the White Paper will therefore be contingent upon the SNP retaining power in an independent Scotland.

Proposed reforms that will have an impact for businesses and employers include: 

  • A commitment that the minimum wage will rise at least in line with inflation.
  • Promotion of the Living Wage with a view to increasing the number of private companies who pay it.
  • Restoration of the 90 days consultation period for redundancies affecting 100 employees or more. [As part of the recent employment law changes from Westminster this was decreased to 45 days].
  • Abolition of the Share for Rights Scheme which was recently introduced by Westminster [the Scheme itself has been tremendously unsuccessful and so the impact of its abolition, although welcome, will likely have very little impact.]
  • An immigration system that will see the reintroduction of the post-work study visa.
  • A commitment to working directly with trade unions, employer associations, employers and the voluntary sector.
  • Promotion of employment representation at board level and particularly female representation.
  • A reduction in corporation tax, keeping the level of Scottish Corporation Tax 3% lower than the rest of the UK.
  • A commitment to support small and medium sized businesses by reducing compliance burdens as well as business rates. 

It is worthwhile noting that the Scottish Government has stated that it intends to apply for membership to the European Union as an independent Scotland. Given that EU law forms the basis of a large number of laws in the United Kingdom and particularly those related to employment law it is unlikely that there will be any radical changes to employment law as it currently stands.

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