Are British workers cheaper to sack than others? Yes – but not always, reports Stephen Overell
It is because we are quick, easy and cheap to sack". So said Tony Woodley, the T&G’s lead negotiator as Ford announced the ending of Fiesta production at Dagenham last week, with the loss of between 1,900 jobs (Ford’s official figure) and 5,000 jobs (the trade union prediction).
The accusation that Britain is the bargain basement of Europe when it comes to employment costs always irks national pride.
But it was clearly not to Ford's taste, either. The car giant said its voluntary redundancy package was the best ever offered in British manufacturing history, totalling some £8m.
European chairman Nick Scheele argued that cuts programmes in Cologne two years ago and Genk, Belgium, last year, which cost $100,000 (£67,000) per head and $55,000 (£37,000) per head respectively, were snips in comparison to the cost of Dagenham redundancies. "Flexibility is not an issue, here," he said.
The figures the company issued to highlight the generosity of the package seem to illustrate, in this case at least, it was not skimping.
Employees were likely to get nine months' basic pay in addition to early retirement from 45 with an unreduced pension from 50. Thus for an hourly paid worker receiving £21,264 taking voluntary redundancy at 41 with 15 years' service, he would get £30,144. At 55 with 30 years' service, he would get £37,582 with a £10,350 annual pension.
But yet the substance of the charge - that multinationals are better off making people redundant in Britain as opposed to elsewhere - is one many believe is broadly correct.
In theory, it should not be this way with the Collective Redundancies Directive (1975) laying down pan-European standards. But in practice, it is the methods by which nation states have transposed the directive into national law which have given rise to profound discrepancies.
Incomes Data Services, the T&G's source for its comments, warns against stark comparisons because practices vary across Europe, and the rest of the world.
In Britain, as in Denmark and Spain, we operate a system of redundancy payments (depending on age, one week's pay per year of service up to £220 per week with a maximum of 20 years' service). Germany does not.
And yet, procedures in Germany are more stringent, time-consuming and expensive.
Central to the