Practical steps

MARK THOMAS, policy adviser, Unison policy unit

There are some positive moves in the right direction from the government – particularly in the area of parental rights and working time regulations.

But the bottom line is that Britain still has the longest working hours in Europe, and there are various areas where we are less optimistic of major change.

This includes a variety of issues on individual employment rights in the workplace, as a lot of them have qualifying periods. For instance, there is currently no immediate right to unfair dismissal – you have to be in a job for a certain length of time.

Then there’s the issue of protection for agency workers, as they are often drafted in as a cost-cutting measure and subsequently miss out on such things as training opportunities and pension rights. At the same time, agency workers also tend to work in the most vulnerable, low-paid sectors.

As the prevalence of agency workers is very high, it is something that really can’t be ignored by the government. However, the UK is currently blocking an EU Agency Workers Directive that’s been designed to ease the situation.

So with these and many other areas, we are not very optimistic. There have been small advances in recent years, but in many areas this has been tinkering with the technical details rather than the fundamentals of the system.

And while there are plenty of good employers around, there are also plenty of unscrupulous ones. It’s because of them that we need stronger employment rights. After all, what can you currently do about a bad employer?

Lewis Sidnick, employment policy adviser, British Chambers of Commerce

The Labour government has a very ambitious flexible working agenda, and this poses a number of potential threats to business.

For instance, maternity and paternity extensions, the increase to flexible working in general, the increases in minimum wage and the plans for age discrimination legislation may all have a significant effect.

We believe it is vitally important for the government to make sure business doesn’t get harmed by these. However, there’s a significant possibility that the financial burden on employers will increase.

The BCC has developed a burden barometer that adds up the total cost of employment regulations on British business. Since the Labour government came into power, there has been an extra 38.9bn in business costs. Around 15bn of this has been employment costs since 1997/1998.

So business has already been hit hard by employment regulations such as the minimum wage. While it has been bearable until now, there have been eight increases in the last two years and that’s beginning to bite – quite simply, if you start pushing wages up from the bottom, people who are slightly above want increases too. It is a domino effect throughout industry.

The same applies to European legislation, as it has had a big impact on UK businesses. We have to make sure it has a benefit to UK business.

Hannah Reed, Senior employment rights officer, TUC

The Labour manifesto included a raft of employment rights that will benefit female workers, in particular.

This includes their commitment to extending holiday entitlement to include bank holidays, as it will benefit women more than anyone else.

At present we are entitled to four weeks paid annual leave. But through the Working Time Regulations and the Warwick Agreement, the government has already agreed to extend the statutory rights to include bank holidays. This means everyone will be entitled to four weeks and eight days.

Our studies suggest that 1.45 million part-time workers will benefit from the measures and most of these will be women in low-paid, unskilled and non-unionised employment.

At the same time, the increases in the minimum wage will also benefit female workers more than anyone else.

If there’s a 4.1% increase in 2005 it will benefit 1.2 million workers. Possibly as many as two-thirds of these will be women, as around half of the total gainers will be part-timers.

Lastly, the potential changes to childcare and paid maternity leave will mean women have more control of their situation.

We believe that the best route out of poverty is for women to get into work. But to do that women have to be able to exert some control over their lives at work and home.

If the government’s measures are successful this may, for the first time, become reality.

David Yeandle, deputy director of employment policy, Engineering Employers Federation

The really big issue is how the regulations surrounding age discrimination are going to be introduced. We already know this has been controversial to date and it has enormous practical difficulties for companies, ranging from recruitment to promotion, pay and benefits structures, pensions, redundancy, unfair dismissal… the practical implications are enormous. And we know that, as it’s a European initiative, it has to be implemented by October 2006.

We are still waiting to see the thinking on what way the government will jump over the issues. But it’s almost certain that the redundancy system will change. Whether it’s a change that increases employers costs I don’t know, but it seems likely that many businesses will have to review their redundancy payments.

Equally, another important aspect will be pensions. At one stage the government was talking about excluding pensions from the regulations. But there are serious concerns that it may not exempt companies that have closed their final salary scheme to existing members and offered defined contribution arrangements instead.

If the government does not exempt these companies, many will have to bite the bullet and close their defined benefit schemes completely as they cannot afford the cost of potential litigation if, five years down the road, they are fined for offering different pension schemes to different groups.


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