Employment legislation: Are the UK’s labour laws too weak?

A fierce debate is raging about the state of the UK’s labour laws in the wake of Peugeot’s decision to close its Coventry factory.

The French car manufacturer is cutting 2,300 jobs as it withdraws from the UK to focus production in mainland Europe.

Unions have claimed that the Coventry plant was targeted for closure because it is easier to make workers redundant in the than it is in France. They insist that the government must tighten employment legislation to protect jobs.

But manufacturers have hit back – arguing that the weak labour laws create jobs by encouraging multinational firms to set up in the UK.

One thing both sides appear to agree on is that it is easier to get rid of staff  on this side of the Channel.
 
Felicity Gemson, European professional support lawyer at Allen & Overy, told Personneltoday.com: “French collective dismissal procedures are stricter than the UK’s. For example, if more than 100 people are being made redundant in France, a minimum consultation timetable of six months is realistic. In the UK, consultation could take just 90 days.

“And if procedures are not complied with in France, dismissals may be ineffective. In the UK, the employer will pay a capped level of compensation.”

Trade union Amicus claimed these laws show that jobs are cheap in the UK.

“Job protection similar to that enjoyed by workers in France would give British employees the opportunity to compete for investment,” said the union’s general secretary, Derek Simpson.

But manufacturers’ trade body EEF said the weak laws create jobs, rather than threaten them.

“Remember, there is 10% unemployment in France,” said a spokesman. “We do well for foreign investment in the UK because of the flexible laws. That is why the Japanese car makers are here.

“We could have the best-protected workforce in the country, but have 25% unemployment.”

The EEF insisted that labour laws had no impact on Peugeot’s decision to shut its Coventry plant.

“There were a number of reasons behind the decision. It is an old facility which would have required a lot of investment; it is outside the manufacturer’s native country; and also it is the furthest plant from the growing markets in Eastern Europe,” the spokesman said.

But unions are not convinced that labour laws are working in the UK’s favour.

“We keep being told that the UK is an attractive base, but the manufacturing sector is imploding,” said a spokesman for the Transport and General Workers’ union.

“We insist on protection of workers. We want it to become law for a firm to notify unions as soon as it considers closing a site down. We believe Peugeot had been planning to close the Coventry plant for two years.”

The T&G refused to rule out strike action to fight Peugeot’s decision.

Socialist Coventry councillor Dave Nellist said: “I hope union members will take inspiration from how French workers have dealt with plans to make it easier to sack young workers, and decide on a robust response.

“Our city and region have lost thousands upon thousands of manufacturing jobs in recent years. Weak employment laws make it easier to sack people in this country than elsewhere. The unions must force the government to act now to stop this industrial vandalism.”

Of course, industrial action to change the weak labour laws is made difficult by the laws themselves – while the right to strike is guaranteed in the French constitution, there is no automatic right to strike in the UK.

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