Labour’s New Deal for Working People challenges the idea that the UK should be a low-cost, deregulated economy. And given that productivity remains stubbornly below its European competitors, many business leaders remain sanguine about the prospect of more secure work and protections for employees, writes employment law specialist Amanda Glover.
The New Deal for Working People, which sets out Labour’s plans for reform in the world of work, has certainly piqued the interests of HR professionals. If, as seems likely, it wins the next general election, Labour originally promised that it would introduce legislation within its first 100 days in office to enact the reforms.
It has recently been reported, however, that Labour’s leaders are considering ways to soften some of the commitments set out in the New Deal, in order to alleviate employers’ concerns that the UK labour market would become too highly regulated.
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The expected changes to the proposals include assurances that pledges will be subject to formal consultation with business leaders.
This could mean it is difficult for the original 100-day target to be met. Having said this, Labour are continuing to promise that the proposals will not be diluted and that they are committed to delivering the New Deal in full.
Interestingly, despite business leaders’ trepidation in respect of the proposed reforms, a survey by the Chartered Management Institute (CMI) has reported that more than 70% of company managers support Labour’s proposed changes to employment law, that 80% think workers’ rights should be a top priority in national policies, and that 83% of managers believe the proposals would positively impact workplace productivity.
So what are the proposals that concern business bosses while simultaneously appealing to their management teams? Let’s explore some of the main reforms below:
Banning zero-hours contracts and providing predictable contracts. Labour has explained that this will mean disallowing contracts that do not offer a minimum number of guaranteed hours. It will also ensure that anyone working regular hours for 12 weeks or more will gain a right to a regular contract to reflect those hours normally worked.
For many years now it has been established wisdom among a group of UK business leaders that the UK will secure competitive advantage by positioning itself as a low-wage, low-cost, highly deregulated labour market. This approach has clearly failed”
Labour has additionally said it will make sure all workers get reasonable notice of any change in shifts or working time, with wages for any shifts cancelled without appropriate notice being paid in full.
This has been an area fraught with employment law difficulties for a while. It is hard to find balance. On the one hand, policymakers must consider that there are workers who absolutely want a maximum flexibility type of work, because it fits their lifestyle and they may not want a minimum hours offering.
On the other hand, there are workers on zero-hours contracts because they have no choice but to accept this type of work. Labour’s proposals are likely to aim at providing a certain level of predictability for these workers and protect them from the exploitative practices of their employers.
Ending qualifying periods for basic rights. This will apply to the qualifying periods for statutory sick pay and parental Leave. This change will also see working individuals not needing to wait up to two years to be protected against some types of unfair dismissal.
Single status of “worker”. Currently, there are three categories of employment status “employee”, “worker” and “self-employed contractor” which are each afforded different levels of labour rights and protections. Labour intends to create a single status of “worker” for all those except the genuinely self-employed. This will increase the number of individuals eligible for minimum statutory protections. As a result, there may be substantial cost implications for employers, as well as additional administrative burdens.
Update trade union legislation. Labour intends to repeal anti-trade union legislation that removes or restricts workers’ rights, including the Trade Union Act 2016. The green paper refers further to simplifying the law around union recognition and strengthening trade unions’ right of entry to workplaces to organise, meet and represent their members, and allowing unions to use secure electronic and workplace ballots (in place of the current postal balloting system). The party also seeks fair pay agreements, negotiated through sectoral bargaining, which establish minimum terms and conditions that will be binding on all workers in the sector.
For many years it has been established wisdom among a group of UK business leaders that the UK will secure a competitive advantage by positioning itself as a low-wage, low-cost, highly deregulated labour market. This approach has clearly failed. The UK has persistent productivity gaps against countries like France and Germany, which have higher labour costs and stronger labour rights and protections.
It is clear therefore that a successful modern economy can be built upon advanced workers’ rights such as those put forward in Labour’s New Deal. The managers surveyed by the CMI are at the sharp end of business. They are the ones who interface with the bulk of the employees and need to deliver organisational performance.
As the survey demonstrates, they recognise that diversity and inclusion, good jobs and secure work are essential to enable talent to deliver the innovation and creativity modern organisations crave.
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It is also these managers who witness the negative impacts on their teams of work intensification, insecure employment practices and poor people management processes. It must also be recognised that managers themselves are employees and, as the “squeezed middle” between leaders, directors and organisational realities, they are ideally placed to understand what does work in terms of good employment practices and what does not.
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