Employers warn of jobs vacuum if EU legislation pushed through

Business
leaders issued a strong warning today that threatened EU regulation would slash
the chances of work and overtime for thousands of people in the UK.

They
also said that the "dam had burst" on pensions as rising costs
trigger an acceleration in the number of employers moving away from final
salary schemes.

The
warnings come in a wide-ranging annual assessment of trends in the world of
work, published by the CBI with employment agency Pertemps.

The
report shows:


45 per cent of employers would offer fewer temporary work assignments under the
Temporary Workers Directive


59 per cent of employers said the directive would impose extra costs making
temporary workers less affordable, removing a vital flexibility for employers
and denying a crucial route into work to the unemployed, ex-offenders or
working mothers.


Proposals to remove the right to opt-out of the Working Time Directive would
cost thousands the choice to do overtime. Thirty-nine per cent of employers
said losing the opt-out would have a serious impact on their business. Only 27
per cent said it would have no impact.


19 per cent of all employees regularly used the individual opt out. In the
smallest companies 24 per cent regularly used it. Removing this right would
take away their opportunity to earn extra and damage companies’
competitiveness.

Pertemps
chairman Tim Watts, said: "Many people choose flexible working
arrangements because it suits their lifestyle. The UK’s flexible labour market
creates many more employment opportunities. That is why more women and
traditionally under-involved groups are in work in the UK than in most other
European countries. Squeezing these people out of the world of work would be
bad for them and bad for the economy."

The
report also shows firms increasingly being priced out of final salary pensions.
Almost half the employers with a final salary pension scheme last year closed
it, usually to new entrants. In 2002 a quarter had closed their schemes. This
year, 27 per cent of firms were offering a final salary scheme compared with 43
per cent a year ago.

The
CBI stressed that employers are still committed to pensions despite the
difficulties. Stakeholder pensions were being offered by 57 per cent of firms
and, where final salary schemes remain, the average employer contribution is
nearly three times the average employee contribution.

CBI
deputy director-general John Cridland said: "We reject charges that we are
anti-regulation; what we oppose is bad regulation. This survey shows
inappropriate and unnecessary EU rules threatening the freedom of individuals
to work when and how they choose.

"On
pensions the dam has burst as rising costs overwhelm employers who are
increasingly being forced to pull out of final salary schemes for new
employees. So far the loudest calls have been for things such as compulsory
employer contributions and pensions protection which will only push up costs.
We need radical proposals that will make pensions simpler and more affordable.

"Well
crafted, thought-through, legislation can achieve its objectives without
excessively damaging, or unintended, consequences.

The
CBI also says that the impact of legislation giving a right to request flexible
working has not been overly damaging. Most employers had not suffered because
80 per cent already seriously considered such requests. Eighty-two per cent of
employers offered part-time working, 34 per cent offered job sharing and 32 per
cent flexi-time.

Employers
increasingly recognise that their own skills are the key to their future
competitiveness. In the past two years management skills have overtaken skills
of the workforce as the main HR factor determining future competitiveness and
were expected to become even more important.

Management
skills were regarded as the most important element of competitive advantage by
56 per cent of employers, while workforce skills were mentioned by 44 per cent.
Looking ahead, 67 per cent of employers believe management skills will be most
important.

By Quentin Reade

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