Via the Employment Lawyers Association, the three main political parties fighting the UK election set out their vision for the future of employment relations. http://www.elaweb.org.uk/default.aspx
Labour Champions Flexibility and Fairness
Today’s UK labour market is characterised by two key features, which we have championed as a Labour government: flexibility and fairness: fairness in providing protection for workers combined with labour market and business flexibility.
Of course, no market can function properly without rules, but in order to get the rules right, it is essential we continue to provide protections without inhibiting choice, opportunity or UK competitiveness.
This approach has delivered historically and internationally high levels of employment here in the UK over the last decade. All groups in society have benefited and the government remains committed to maintaining the flexible and dynamic labour market we have built, because it is in the interests of employers and employees that we do so.
Minimum wage
The National Minimum Wage is a great example of one of the last decade’s hugely successful reforms, introduced despite the chorus of opposition from our Conservative opposition. Today, this is widely regarded as the bedrock of the employment landscape. It provides a crucial floor of decency for the workforce and brings substantial benefits to the lowest paid workers while not damaging employment prospects.
At the last uprating in October 2009, between 950,000 and one million workers benefited, over two thirds of them women. Since April 2009, employers not complying with the minimum wage now face an automatic penalty of up to £5,000. As at the end of January 2010, more than 316 penalties had been issued and nearly £4.5 million of minimum wage arrears were recovered for workers.
At the heart of Europe
That balance between rights, regulation and economic dynamism is at the heart of the debate on employment law and nowhere is the choice at the next election more clear than when it comes to Europe. The Labour government has said clearly we should be at the heart of Europe, which has delivered undeniable benefits to both the workforce and to British businesses.
But this is not an area where we can claim the existence of a political consensus. The Conservatives have shown themselves deeply divided over Europe and have removed themselves from the centre-right coalition group to the fringes of European politics to the disdain of business and union leaders here in the UK and on the continent. Few agree this is a sensible move for Britain, British workers or British interests in Europe.
Last summer, David Frost, the director general of the British Chambers of Commerce, wrote:
`The European Union cannot afford more introspection at a time of global economic crisis and geopolitical change. Moreover, such a commitment from the Tories, alongside a review of the decision to pull out of the European People’s party, might earn them the agreement of the centre right to look at the future direction of EU employment law.’
Miles Templeman of the Institute of Directors has said:
`The Tories have got to be much more positive about Europe, they’ve hung on to their slightly on-the-edge [of the European Union], eurosceptic views.’
If we take an area like the Agency Workers Directive, the agreement reached in Europe in 2008 meant that Britain’s rules could be based on the agreement reached here in the UK between the Confederation of British Industry and the Trades Union Congress. The deal struck for the UK was possible because the Labour government is engaged in the mainstream of Europe, and actively influencing proposals that affect the UK economy and UK workers. Labour is committed to maintaining that position.
Elections are won, of course, not on a list of achievements or criticism and critique of our opponent’s actions, policies and plans, but on what parties offer for the future.
Family and parental rights
The family and new rights for parents have taken centre stage in recent years. New rights have helped parents to reconcile work and family responsibilities, including generous maternity leave and pay, paid paternity and adoption leave, parental leave and the right to request flexible working.
Protecting vulnerable workers
We are in the process of embedding the vulnerable workers strategy, which has grown from the work of the Vulnerable Worker Enforcement Forum, set up by the Labour government to address the issues for those UK workers who are employed in an environment where the risk of being denied employment rights is high and who do not have the capacity to protect themselves from that abuse. If that worker’s employer exploits this weakness and the person has nowhere to go for help – no HR department, no union – then he or she is a vulnerable worker.
The government’s vulnerable worker strategy has five strands:
- maintaining a fair but robust legal framework of minimum protection
- raising worker awareness of rights and how to enforce them
- helping businesses understand and comply
- joined-up, effective and targeted enforcement
- helping vulnerable workers develop skills to strengthen their position in the labour market (`advancement’).
Alongside the introduction of new legal rights it is of course important that effective support is in place to support and educate people about the existence of new laws and regulation. Following the recommendations of the Vulnerable Worker Enforcement Forum, the pay and pork rights helpline (0800 917 2368) was launched in September 2009 to provide a single point of contact for workers and employers seeking advice about workplace rights or reporting abuses; to date it has received more than 50,000 calls.
Where in the past five separate government bodies took calls on the National Minimum Wage, the Agricultural Minimum Wage, the Working Time Directive, employment agency standards and gangmaster licensing, this is now handled through the one helpline, a service in partnership with the enforcement bodies.
Conclusion
So, we have delivered a decade of progressive legislation for business and workers, a strong voice for Britain in the heart of Europe, a renewed focus on family-friendly policy, a strong commitment to supporting workers – especially the most vulnerable – and strong penalties for non-complying businesses.
The Labour government has a strong record of which I’m proud, but we are not complacent. Unlike our opposition we are totally committed to the balance we have maintained over the last decade between flexibility and fairness, so key to our economic vibrancy which, in turn, is so essential to our economic growth and future prosperity. This is the government’s number one priority and, unlike the Tories, we will not put that recovery at risk.
Lord Young is minister for employment relations
Conservatives Pledge Action on TUPE and Tribunals
The Conservative governments led by Margaret Thatcher and John Major – in which I had the honour to serve – led the world with their labour market reforms during the 1980s and 1990s. We inherited a sclerotic labour market, riddled with so-called `Spanish practices’ and dominated by the bully-boy tactics of trade union militants. We gave the unions back to their decent members and restored the right of managers to manage.
The effects on structural unemployment were impressive. By the early 1990s, we had 69 per cent of our working-age population in work, compared with a European Community (EC) average of 61 per cent; and 28 per cent of our unemployed people were long-term unemployed, compared with an EC average of over 45 per cent.
When the recession of the early 1990s ended, unemployment began to fall almost straight away. The markets were surprised and, if I am to be candid, so were we – very pleasantly surprised. Our flexible labour market was working.
One of the great battles of the Major years was over the so-called `Social Chapter’. This was an attempt by the European Commission to extend the reach of the then European Community into `social affairs’, removing the national veto over a whole raft of hugely important economic matters and, at the Maastricht negotiations, the chapter was removed and attached to the treaty as a protocol, from which the UK enjoyed an opt-out. Labour pledged to end the opt-out should it ever return to office.
In the meantime, quite independently of the Social Protocol, as employment secretary in 1993-94, I fought a running battle against a series of directives that kept returning again and again, in slightly different guises, all relating to the workplace.
All were motivated by the continental, social democratic model and all to some degree would have reversed our attempts to create an enterprise economy – and enterprising society – here in the UK. We called them the `Lazarus Directives’.
Conservative policy now is to repatriate employment law back to the UK. Given that this will require amendment by treaty, I shall restrict my comments to working with the existing directives and highlighting the fact that, until such time as repatriation does occur, our policy is to engage fully with the European Union on employment matters to safeguard our national interest.
This brings us to the present day. We have recently seen the highest unemployment on record among 16-24 year-olds and it is now over a decade since Tony Blair signed away the Social Chapter opt-out in return for precisely nothing. The only reason we have not seen unemployment soar and recession turn into depression is because so many workers in the private sector have been willing to accept pay freezes or reductions in hours, rather than risk losing their jobs entirely. The pragmatism of the people, not the policies of the government, saved the day.
An incoming Conservative government will have a job on its hands. The trade unions now draw their membership disproportionately from the public sector and, for all their protestations, they know as well as the rest of us that hard times lie ahead. Neither they nor anyone else should be allowed to impede our path out of trouble.
Since Labour returned to office, there have been 25 Acts of Parliament and around 250 pieces of secondary legislation that have directly added to the corpus of employment law, many of them consequent upon the notorious `Warwick agreements’ between the Labour Party and the trade unions.
Given that the unions will be contributing an estimated 75 per cent of Labour’s funds for the forthcoming general election campaign, I see no reason to believe this trend would change under a re-elected Labour government.
I have been asked to set out five areas in which a Conservative government might seek to restore flexibility to the labour market, and the balance between employer and employed, in order that employees should be able to work in the changing lifestyles of today, while companies once again enjoy the benefits of pro-competitive laws that encourage small businesses in particular to employ more people, and also make investing in the UK more attractive for firms from overseas. There are plenty of other ideas around too, but here are five obvious priorities.
Regulation
Between 1998 and 2009, new employment regulations cost £72 billion, out of a total cost of all new business regulations of £76 billion, some 95 per cent of the extra burden related to employment regulation. Much of the disproportionate regulation that afflicts us originates at the European level and it is high time we stopped making things worse than they need to be. We would strip the so-called `gold plating’ from directives such as the Part-time Work Directive, the Fixed-term Work Directive, the Information on Employment Conditions Directive (to exclude casual workers) and the proposed Agency Workers Directive regulations. We would also consider more use of `sunset’ clauses and the `one in, one out’ principle.
Employment tribunals
We would raise the limit for deposits (currently £500) and/or cost awards (currently £10,000) to discourage weak or vexatious claims. The average cost to an employer of defending a tribunal case is around £9,000 and almost ten days’ worth of directors’ and or senior managers’ time is lost per case. We would review the tribunal rules of procedure. We would aim to ensure a more balanced and consistent approach across tribunals and/or require (rather than allow) the president of the employment tribunals to make practice directions on the management of cases, generally, in order to promote greater consistency of approach by different tribunals.
We would harmonise the deadline and grounds for extension for bringing tribunal complaints and impose compulsory mediation for certain types of cases that would benefit from this most; for example, discrimination cases. Mediation is seen by many as the future for resolving legal disputes. Even where it fails, the issues will have been aired sufficiently to make the ensuing process quicker, easier and more likely to avoid vexatious claims. We will consult on these matters before making lasting changes.
Flexible working for all parents and flexible parental leave
We want to give as many people as possible the chance to work flexibly, but we also want to be fair to employers. Currently, the right to request flexible working is available only to parents with children under 17 or disabled children under 18. We are committed to extending the right to request flexible working to all parents of children under the age of 18. It would be unfair and inappropriate to compel employers, so we are limiting the policy to the `right to request’, rather than allowing a `right to demand’. We will also seek to turn the public sector – Britain’s biggest employer – into a world leader in providing flexible working opportunities.
We believe paid maternity leave should be more flexible. While the first 14 weeks should automatically apply to the mother so she can bond with the child, it should be up to parents to decide how to use the remaining period. We will increase the flexibility of the system so that parents can decide how to divide their paid maternity leave and are able to make use of it simultaneously. Under Labour, only mothers can take the first 26 weeks of parental leave.
TUPE
As readers will be well aware, the TUPE regulations protect employees where their employer changes as a result of a transfer of the undertaking or business in which they work. The employees automatically become employees of the new employer on the same terms and conditions. This all springs from the requirements of EU law. As matters stand, however, the TUPE regulations here in the UK go beyond what is required by EU law, for the EU directive states only that regulations should apply where there is a ‘transfer of an economic entity which retains its identity’.
A Conservative government would seek to rein in those of the government’s `service provision changes’ – where activities are contracted out, contracted in, or reassigned from one contractor to another – that go beyond what is required. This would take many transactions outside the scope of the law, giving firms more freedom to out-source work and change service providers, giving service providers more freedom to bid for contracts.
Redundancy
We would seek to incentivise employers to find alternative, suitable employment for potentially redundant workers, and also impose a greater onus on the employee to seek redeployment in the company. Employees in sectors such as financial services tend to opt for a redundancy payment even when the employer has a good alternative role available, and the onus is currently on the employer to prove that the employee’s decision to refuse redeployment is unreasonable. A genuinely balanced approach is essential, and we would aim also to enhance clarity and consistency within the system.
Lord Hunt, Shadow Minister for business, enterprise
and regulation
Liberal Democrats Back Anonymous Job Applications
Employment legislation is frequently cited as a major burden to employers. There is much talk of simplification but less clarity as to specific measures that could be scrapped. Of greater importance is better management of new regulations; this applies to all regulations, not just employment law.
The Liberal Democrats have set out detailed proposals to manage the introduction of new regulations including using sunset clauses, introducing independent checks on the costs of regulations and ending the gold-plating of European directives.
Despite our overall bias towards cutting regulation there are a number of areas where changes are needed. These changes will deliver a fairer deal for employees but equally provide benefits for employers in terms of widening the pool of labour, encouraging employee motivation and increasing retention. A number of these proposals have already been adopted voluntarily by leading employers; I want to see the benefits extended to all.
‘Name-blank’ job applications
To many of us who work for enlightened and diverse employers, it seems hard to believe that discrimination occurs before even being interviewed for a job. However, research commissioned by the Department for Work and Pensions – following Liberal Democrat proposals at the second reading of the Equality Bill on ‘name-blank’ job applications – identified significant and widespread racial discrimination in the recruitment process.
Fictitious CVs were sent to 3,000 advertised jobs from candidates with names from different ethnic backgrounds – with a twin application with an English-sounding name. To get a positive response from an employer, the researchers had to send nine applications from an ‘English named’ candidate, compared to 16 for a candidate with an ethnic name.
We will introduce name-blank job application forms, where the name of the applicant is not revealed, in order to prevent discrimination at the first round of a job application process. Application forms and CVs will use a simple means of identification such as a national insurance number.
This will end the, possibly subliminal, discrimination that arises from some applications being discarded simply because of the names on them. Applicants will get a fair opportunity to secure an interview, allowing them to present their individual skills and abilities in person. Obviously, when the applicant reaches interview stage, the employer will learn much more about their background, but prejudice will be much harder, as personality and character come through at interview in a way that they do not on a piece of paper. We believe this is a simple and effective way to help overcome entrenched inequalities.
Flexible parental leave
Existing maternity and paternity leave legislation is based on an outdated model of parenting where the mother automatically adopts the key role. This starts before the child is even born, with the mother having the right to take time off to attend ante-natal classes without any such rights for the father. We believe that fathers should also have the right to time off for ante-natal appointments so that they can be involved at the earliest stages of parenting.
When the baby is born, the mother gets one year’s leave and the father currently gets just two weeks. This means the mother is compelled to take the lion’s share of childcare responsibility. However, for many families today the mother is not necessarily the primary carer – either for reasons of choice or, where the mother is the chief wage earner, financial necessity.
The current system is simply too inflexible. We will replace maternity and paternity leave with a single system of parental leave allowing parents to share 12 months of leave between them in whatever way suits them best. Mothers will have to take two weeks’ leave following the birth of their child, as is the case at the moment, but the remainder of the 12 months will be completely flexible. If they wish to, parents could take their leave together; for example, up to six months each. We believe that this system is not only fairer, it also supports family life at a critical and challenging time for parents.
Equal pay audits
It is nearly 40 years since the Equal Pay Act came into force. Despite this, and subsequent anti-discrimination legislation, women still earn less than 85 pence for every pound earned by men. While the pay gap between men and women has closed from 30 per cent in 1975 to 17 per cent in 2008, it is clear that women are still not being paid fairly.
The remedies open to those who are treated unfairly are also inadequate. Current law requires a person to identify that they are being paid unfairly and have the resources and capacity to build a case. If a case is brought it can take up to ten years to conclude and, even then, will not benefit colleagues facing the same discrimination.
There are currently tens of thousands of equal pay cases waiting in the tribunal system and last year only 678 equal pay cases were upheld at employment tribunal. Equal pay now accounts for one in three of all tribunal claims.
We will introduce mandatory pay audits for all companies with more than 100 employees. This provides a reasonable balance between obtaining meaningful coverage of employees while avoiding an undue burden on smaller businesses. Companies will be required to compare the pay of those doing equal work, identify pay gaps and establish plans to eliminate those gaps that cannot be satisfactorily explained.
Equal pay audits will not solve all discrimination; there are wider employment issues such as occupational segregation, glass ceilings and the impact of time off for childbirth. However, equal pay audits are a pre-requisite to tackling the gender pay gap and will encourage women’s participation in the labour market, expanding the pool of talent available to employers.
A single rate for the minimum wage
Young people earning the National Minimum Wage are paid less than others doing the same job. A young person undertaking the same role as someone just slightly older is currently £89 a week worse off. This is simply not fair.
After 12 years of recommendations from the Low Pay Commission, the current government has announced that the adult rate will be extended to include 21-year-olds from October 2010. However, those below 21 will continue to be paid at lower rates.
The Liberal Democrats believe that wages should reflect the role of the job and the skills required by the individual, not their age. We will therefore equalise the National Minimum Wage across all ages.
The argument frequently made against paying younger people equally is that it will increase youth unemployment. However, precisely the same argument was used to oppose the original introduction of the minimum wage and was shown to be wrong.
There are many causes of youth unemployment, such as the recession and shortcomings in the education system; these are much greater factors driving youth employment than minimum pay rates. Major employers such as Asda have already recognised that wages should reflect the job not the age of the employee, and have scrapped age-related pay rates.
Extending the right to request flexible working
The right to request flexible working is currently limited to those who care for a child under 17, a disabled child who is under 18, or certain adults who require care. Under the statutory arrangements, applications cannot be made for any other reason. However, there are many valid reasons why someone may wish to work flexibly.
Giving the right to only one group of people can lead to resentment in the workplace and potentially stigmatise flexible working, creating a barrier to people exercising their right to request. We will extend the right to request flexible working to all employees, not just parents and carers. Employers’ rights to turn down a request will remain unchanged from current legislation.
Extending flexible working is good for businesses as well as employees. The demographics of the labour market and the nature of work itself have changed dramatically over the last few decades; for many people, the nine-to-five routine is no longer either necessary or relevant. Many employers have embraced flexible working, recognising that it helps to attract and retain a more skilled and diverse workforce. During the recent recession flexible working has been used as an alternative to headcount reductions.
Extending the right to request flexible working will embed real change in the UK’s working culture and extend the benefits of flexible working to all employees and businesses.
Lynne Featherstone MP, Liberal Democrat spokesperson for youth and equality
