TUC calls for employers to pay huge compensation to staff made redundant by offshoring

The TUC has called for all employers who offshore any part of their operations to cheaper locations abroad to be forced to pay large sums in compensation to workers who lose their jobs as a result.

In a submission to the government’s 2007 comprehensive spending review, the TUC said companies who offshore services should be covered by insurance that would cover up to 70% of any drop in earnings for up to two years if they are made redundant.

TUC general secretary Brendan Barber, writing in today’s Financial Times, said that the insurance premiums “would cost companies just 4%-5% of the savings they make offshore”. Any workers who moved to lower-paid jobs or could not find work would be eligible under such a scheme, he said.

The TUC also called on the government to create a fund “to provide training and job search support for workers who lose their jobs due to major changes in world trade”.

“Of course, we can’t say ‘stop the world I want to get off’ and turn back the tide of globalisation by erecting barriers to try and protect industries and jobs. But that does not mean that we are powerless in shaping its impact,” Barber said.

Richard Lambert, director-general of the CBI, said that improving skills is the best way for the UK to compete in a globalised marketplace.

“But sticking-plaster solutions, such as the fund the TUC proposes to compensate workers whose jobs go overseas, do nothing to help our economy develop or our businesses to create new, high-value jobs to compete in a global marketplace – to say nothing of the enormous practical difficulties,” he said.