It cannot be said that the Labour government, only six months in office, isn’t trying to shake things up!
Political comment aside, it has given pay rises to public sector workers, raised taxes, and cut payments to pensioners. Not all its actions have been welcomed.
But beyond that, not unsurprisingly, given its political outlook on life, Labour is looking to reform the employment landscape too and recently introduced a 150-page Employment Rights Bill into parliament.
In its key points the bill proposes removing the two-year qualifying period for unfair dismissal while adding a statutory probation period, banning or restricting zero-hours contracts and “fire and rehire”, making flexible working a default right, strengthening parental rights, changing trade union law and collective rights, granting sick pay from day one, extending the time for tribunal claims and removing compensation caps.
However, some elements that were expected to be included did not make the cut. These include the “right to switch off” which would have prevented employers from contacting workers out of hours, making larger firms report their ethnicity and disability pay gap, introducing a single status of worker, and further reviewing parental and carer leave systems.
The response from stakeholders has been mixed. For the TUC, the legislation is described as “a potential game-changer”. Paul Nowak, general secretary, said: “The government’s Employment Rights Bill offers a real moment of hope for working people,” and it “represents a positive and ambitious plan to make work pay. And it will benefit millions of workers, especially those trapped in low-paid and insecure employment.”
He thinks that the package of measures in the bill “will be genuinely transformative.”
Trade union Unison follows the same line. General secretary Christina McAnea said the bill “can’t come soon enough” and will bring “improved rights for individual workers, establishing new collective approaches in long-ignored sectors, and strip away a decade of hostile restrictions on trade union activity.” In particular, she thinks that the balance of power at work has been tipped firmly away from workers and that the bill will correct this.
And for the CIPD, a professional body for the world of human resources, Peter Cheese, chief executive considers the bill “a landmark moment for British workers’ rights” and has “welcomed the ambition behind the new Employment Rights Bill to help improve job quality and raise employment standards in Britain.”
On the other side of the fence sits the Institute of Directors (IoD) which has published a poll on how businesses viewed the proposed legislation. Of the 715 businesses across the UK of varying sizes polled, it found that 57% would be less likely to hire.
To be fair, the poll did report that some 35.5% said the reforms would have no impact on their hiring intentions, 2% said they would be more likely to hire, and that 5% saw the reforms as irrelevant.
Taking a similar stance to the IoD, the CBI published, mid-November, the findings from a panel of experts – lawyers, policy advisers and HR professionals. Collectively, they found that reforms to zero-hour contracts could prove costly, that firms restructuring will see the process significantly more complex, that trade union reforms could weaken employee relations, and – critically – businesses will think more carefully about their workforce needs.
It’s interesting that the government’s own Regulatory Policy Committee reckons that, as noted by The Times, “the proposals lacked evidence to support the problem being addressed”. It warned that the estimated £5bn a year cost of the rules to business could be an underestimate that would be paid for through lower wage growth. So, where does the truth lie? Well, in answer to that, only time will tell. However, if we consider the history of the national minimum wage, it took years to come to fruition and, interestingly, to get full support from the labour/union movement. It’s true that it has increased costs for employers, but it’s hardly broken society in the 25 years of its existence.