By Tony Dobbins, Professor of Work and Employment Relations
Department of Management, Birmingham Business School
The Labour Government’s new Employment Rights Bill undoubtedly heralds a significant boost in workers’ rights after 14 years of Conservative government espousal of a liberalized flexible labour market model – translated as let the market run its course/let people do as they choose. The problem with this ‘survival of the fittest’ model is that it has created too much in-work poverty, insecurity, precarity, low pay, and destitution for far too many people.
As the first phase of delivering the Plan to Make Work Pay, the Employment Rights Bill contains numerous proposals on mainly individual employment rights reforms including: a new Fair Work Agency for stronger enforcement, better statutory sick pay, protection against unfair dismissal from day one (rather than two years at present, although it seems that there will be a nine-month probationary period for new recruits), a cost of living measure for setting the minimum wage, making flexible working the default where practical.
Regarding collective employment rights, the Government has promised new rights to online union balloting, union access to workplaces, simplification of the union recognition procedure, and to repeal anti-trade union laws enacted by the Conservatives in recent years. It also contains proposals for collective bargaining/negotiating bodies for adult social care and school support staff.
Opportunity for better work relations?
Elements of the employer community will likely be concerned about the extent and impact of the new rights envisaged. However, a more positive (or ‘beneficial constraints’) perspective is possible if the new rights are framed as supporting better employers/employment relations and constraining a race to the bottom by more exploitative employers.
Nonetheless, it could take two years or more before we see some of these rights taking effect in workplaces, with further consultations likely and more detail needed to put flesh on the bones of many proposals.
Too much compromise?
Advocates of stronger workers’ rights will also likely be wary that original proposals on banning zero hours contracts and fire and rehire have apparently been diluted under pressure from business lobbying, with potential loopholes.
Other “wider reforms” are not included in this Bill and have been put on the long finger. Consequently, alongside the legislation, a ‘Next Steps to Make Work Pay’ document has been published, which also outlines some longer-term proposals. This includes guidance (a Code of Practice) – which is not mandatory – on the right to disconnect from work, and consultation on a move towards a single status of worker (one of the most notable proposals left out of the Bill).
There is lack of clarity on other collective employment rights initially promised by Labour, notably extending sectoral collective bargaining more widely across the foundational economy. This is significant because stronger collective rights are most likely to shift the balance of power in employment relationships.
Other collective employment rights that are missing altogether from Government policy documents include board-level worker directors, and stronger rights to form works councils/codetermination forums.
Playing catch-up
There is some truth when the Government claims it is “delivering the biggest upgrade to rights at work for a generation”, yet the UK has a long way to catch-up on employment rights, as measured by The Centre for Business Research Labour Regulation Index (CBR-LRI). The UK currently has one of the most lightly regulated labour markets among advanced economies, notably in a European comparative context. Moreover, post-Brexit, the UK will be increasingly out of line with European standards because the EU has introduced various new employment directives for member states under its European Pillar of Social Rights, including the Adequate Minimum Wage Directive, Platform Work Directive, Transparent and Predictable Working Conditions Directive.
The test will be how many of the original proposals in the New Deal for Working People remain intact and operational in practice across UK workplaces and improve work and working lives. The risk is that – with workers’ rights starting from such a weak regulatory base – if the Government goes too far to appease business, the new framework will be too weak to rebalance power relations at work and shift the dial on one-sided flexible labour markets.
State intervention v market fundamentalism
An important issue will be how the new employment rights framework intersects with economic policy issues, notably whether Labour is serious about using the various levers of the state to pursue a good jobs agenda, invest in an industrial strategy for the everyday economy in UK regions, and repair public services. Concerns have been expressed that the Treasury appears intent on continuing Conservative austerity and economic orthodoxy (including rigid fiscal/debt rules holding back much needed investment) – aka market fundamentalism. If so, this would jeopardize the investment required to support better jobs in regional economies like the Midlands and the North of England.
The Budget on October 30th should provide more clarity on the Government’s economic direction and how this might impact and interrelate with possibilities for better work and employment rights.
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The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the University of Birmingham.