Examination of Witnesses (Questions 20-39)
TRADES UNION
CONGRESS
2 NOVEMBER 2004
Q20 Mr Evans: You have just surprised
me a bit there by saying something I did not expect to hear from
you which is that there are rules and regulations within industry
that do not help anybody and, indeed, hamper industry and should
be got rid of. Why do I not associate the TUC with trying to roll
back some of these useless regulations that are dogging industry
at the moment?
Mr Brinkley: The problem with
the Working Time Directive is that because of the opt-out, because
of its weakness, it does not do the job it is supposed to do,
which was reduce the long hour culture—
Q21 Mr Evans: You have reassured me now
you have gone back on to "We need stiffer regulations"!
Mr Brinkley: No, no. The reason
why it does not work is because it has been made too weak. Its
objective was to reduce long hour working in the economy, and
it has not succeeded in doing that. Yet you have this bureaucracy
there for a regulation which is now so weak that people still
fill in forms all the time and sign the opt-out, yet it is still
not achieving what it was supposed to do, and that is why it is
not really pleasing anyone, to be honest.
Q22 Mr Evans: Better do away with it
then?
Mr Brinkley: Well, if you get
rid of it you are condemning the United Kingdom workforce to working
these very long hours compared to the rest of Europe. You are
not tackling the central problem—
Q23 Mr Evans: But you also know there
are a lot of workers out there who want to work longer hours to
earn more money to make provision for their families.
Mr Brinkley: Well, the experience
we have is that is a small minority. A much larger number say
they would rather work shorter hours, and where trade union negotiated
agreements have been brought in, particularly in the transport
sector, we have seen substantial reductions in working hours without
loss of pay simply because firms have had to reorganise their
workforce and reorganise the way they do business in a more efficient
manner. So the transport sector shows it can be done through negotiation,
and we would certainly like to see that approach widened out to
other industries.
Chairman: We will probably come back
to this in a minute.
Q24 Judy Mallaber: How do you respond
to the argument that greater regulation benefits those who do
not particularly need it but deters employers from recruiting
lower skilled, unskilled workers, other people who have disadvantages
of various kinds?
Mr Exell: I think perhaps the
best answer to that is what has happened since 1997 when, as we
were saying, we have had a partial reregulation of the labour
market in this country. If you look at the employment rates of
disadvantaged groups: over 50s—the employment rate has gone
up from 64.7% to 70.2%; ethnic minorities from 54.8% to 59.4%;
lone parents gone up from 45.3 to 54%; disabled people from 43
to 50.1%. For the lowest qualified their employment rate has gone
down but there we do think that there is a problem about the decreasing
demand for unskilled labour. For most disadvantaged groups partial
reregulation of the labour market has been accompanied by a narrowing
of the employment gap as compared with the rest of the population.
This is one of those cases where I find, when we are talking to
people on the other side, they do tend to say, "Well, that
is all very well in practice but what is your theory?", and
the theory here is that we have a sensible approach to reregulation
which bears in mind the possibility that badly designed regulations
can cause problems. We are not, in principle, enthusiasts for
labour market regulation regardless of how it is designed, regardless
of what effect it is going to have. We are enthusiasts for intelligent,
well-designed labour market regulation which, on the whole, is
what we have had so far. We want to see it go further; we would
like some more of it in some areas such as ending the opt-out,
but we are not against the Government's attempt to craft regulations
that are going to have a positive effect, and that is what we
have seen so far.
Q25 Judy Mallaber: Looking at some of
those groups, the people you talked about earlier, the inactive
people who say they want a job, now there may have been success
in getting them to work but how far is that to do with other areas
of extra assistance that they clearly need, and how far is it
to do with the impact of employment reregulation?
Mr Exell: Yes. One of the big
challenges that no one has really worked out is, firstly, how
we get the most disadvantaged into jobs and, secondly, how we
keep them there once they have the jobs and how we help them to
progress once they have got into their jobs. It is all very well
to get people into a job, any job, though we are getting more
success on that than we have ever had before, but across the whole
world no one has really cracked this issue about how we get people
to keep their jobs and to progress in them. It does seem very
likely indeed, looking at what evidence we have, that we are going
to need what the Americans call `post placement' support. One
of the key points here that we would say from a trade union point
of view is that you need to work carefully with employers, you
need to understand what employers' needs are, because the only
people that the employers are going to allow into the workplace
are services that they can see are going to be contributing to
the goals of being in business as a whole. So we are going to
need post placement services that are sympathetic to the needs
of employers and designed in consultation with employers, and
that needs to be there for the long term. We have good reason
for believing that what you have with many of the people who are
in what the Treasury identified five years ago as the "low
pay/no pay cycle"—whereby people get a job, they keep
it for a few months and they are unemployed for a couple of years,
get another job for a few months, are unemployed for a few years
again—the reason why many of them get into that cycle is
because of the other problems they have which make it really difficult
for them to hold on to their jobs in some cases and, in other
cases, because the only jobs they can get are inherently insecure
ones, so what you need is services that are staying with them
after they have got into those jobs, first of all to help them
with things like family crises, addiction problems, problems with
housing and so on, or to help them to use the job they have just
got which is not very secure as the firm point for leaping up
to a better job, which is more secure. Now, what we are hoping
is that, as the government gets more and more successful with
getting people into jobs—and Mr Blair said a couple of weeks
ago that the Government is aiming to get the employment rate up
from 75-80%—as that happens so the savings and the increased
tax revenues that come from that can be used to provide extra
investment in the post placement services that we want to see.
At the moment they are a tiny proportion of United Kingdom active
labour market programmes, and hopefully further economic success
will mean that as a proportion of spending they can be increased.
Q26 Judy Mallaber: One of the biggest
areas where we do not utilise the potential skills of the workforce
is amongst women who are limited to a very limited range of occupations,
and yet again there is a contradiction. To enhance the overall
use of the workforce you need to be able to give both men and
women opportunities to combine work and home, but at the same
time you will often get employers that say "It is not worth
my employing a women because she will go off and get pregnant"
or they will not invest in skilling her and moving her on to other
areas of work. How do you deal with that dilemma?
Ms Reed: Interesting questions
were raised when the Part time Worker Regulations were introduced
back in 2002. It was argued that, by introducing new employment
regulations providing more rights to part time women workers in
particular, fewer employers would be interested in employing women.
However, official statistics demonstrate that since 2002 what
we have actually seen is an increase of 7% of people entering
the labour markets through part time employment. And women using
these new rights benefit not only from equal treatment in terms
of terms and conditions of employment but also are benefiting
from new opportunities to access training to enable them to create
new career opportunities for themselves and to move on to better
quality jobs. There are similar arguments at the present time
taking place around the issue of agency workers and whether there
should be regulation for agency workers on the basis that many
employers argue that agency work offers an attractive form of
flexible employment for women in particular with caring responsibilities
but also with men for caring responsibilities, and if we were
to introduce regulations in this area employers would reduce their
demand for agency workers. Now, the TUC does not accept those
arguments, partly because the empirical evidence and surveys taken
of employers shows that the use of agency work within the United
Kingdom is not based on a cost-based analysis for employers but
on their need to achieve flexibility. Also research carried out
by the European Commission at the present time shows that most
agency workers across Europe in countries including the United
Kingdom have far fewer access to training opportunities than other
forms of workers. So often they will find themselves in very short-term
assignments with no investment for their employers in terms of
enabling them to create new career opportunities. They therefore
get trapped into a cycle of moving from one low-paid, low-skilled
job to another without really having the opportunity to advance
within the labour market. So our argument or analysis of new equal
treatment legislation that we have seen since early in this century
has benefitted individuals who often operate at the margins of
the labour market who are attracted to more flexible forms of
work but who benefit from a system of regulation which enables
them to access training. On a counterpoint we also believe that
these bring benefits to employers because investment in a wider
range of workers raising the skill levels of more individuals
who want flexible forms of work ensures that the quality of the
pool of workers that are available to employers will increase.
Therefore the choices and flexibility available to employers will
increase.
Q27 Judy Mallaber: But how successful
are you in persuading employers of that argument, that it is worth
taking on that investment in those skills and training?
Ms Reed: Well, certainly the evidence
in terms of part time work and also the evidence of what has happened
to the temporary work sector—where again we have seen new
regulations introduced for fixed-term workers—is that relatively
in the temporary sector there has not been a decline in the use
of people on fixed-term contracts since the introduction of the
regulations. So while at the present time the employers may argue
that the regulations will result in lower levels of demand for
these forms of workers, in practice when the regulations are introduced,
demand increases in the case of part time workers, or relatively
does not decrease faster in terms of fixed-term employees.
Q28 Mr Evans: On the flexibility front,
do you recognise as well that there are some businesses that are
small but that simply could not participate in a number of the
things that you said would be beneficial to them on flexibility?
Do you recognise that there is a size issue there?
Ms Reed: There are a variety of
examples I think drawn from the small business sector. I was recently
at a conference with an employer from the Small Business Council,
who said he has sat down with his whole workforce and talked about
working time arrangements because he was heavily reliant upon
women workers. That was his principal source of employees, and
he recognised the need to match the needs of employees to balance
their working time responsibilities and their family lives. That
had been a very successful example. He said he was working in
a sector within a local area where it was very difficult to access
the appropriate skilled members of staff. He, unlike other small
businesses operating in that area, had a number of people who
were queuing up to work for him as an employer. There are other
examples of small businesses that have used job share arrangements
and other forms of flexible working. Our encouragement would be
to small businesses to sit down and talk with their staff, ideally
through elected representatives, to look at what flexible systems
and what flexible patterns of work would work for their work place.
We recognise both the needs of the employee and the employer need
to be met. But a collective conversation about these issues often
comes out with sensible solutions.
Q29 Mr Evans: You say elected representatives,
but there may be some small businesses that only employ two or
three people, and for them to go down the route of flexibility
may be much more difficult. You are pointing to one business example
where it has worked, but do you recognise as well that there will
be others where they simply are not able to benefit from it because
they have not got a pool of people looking for part time work?
Ms Reed: The smaller the organisation
the more difficult it may be to use different forms of flexible
employment. But small employers are the same as any size of employers
and they need to be able to retain skilled members of staff. And
often they have families and have family pressures. One of the
key findings from many empirical surveys is that employers who
investigate and consider flexible forms of work are more successful
in retaining skilled members of staff, and therefore do not need
to invest in training new members of staff that they would have
to recruit to replace these members of staff who may leave because
flexible working patterns are not available.
Q30 Mr Evans: On the general point of
smaller businesses, with all the rules and regulations that the
TUC might like to roll out themselves as protection for workers
and all that sort of thing, do you recognise that there is any
scope at all for having more flexible regulations for smaller
businesses because they find it more difficult to afford to do
some of the things that the huge industries are able to afford
because they have personnel departments, whereas in smaller businesses
the owner is the personnel department?
Ms Reed: We recognise that the
conditions which enable businesses to grow and to thrive often
apply right across the board, and that would include fair treatment
of members of staff. We are very conscious that in many small
businesses, employment disputes have become a big issue. And the
Government's own statistics show that the small business sector
gives rise to the largest proportion, or a disproportionate number,
of employment tribunal claims, which suggests that employment
relations are not always as good within the small business sector
as they might be. Our view would be that if small businesses,
and many of them do this, adopt better practices and look at putting
in place policies, and work with organisations such as ACAS and
the Equal Opportunities Commission, not only would they help to
resolve employment rights disputes and retain quality skilled
staff within their workforce but also, we would argue, become
more competitive and productive in the future.
Q31 Mr Evans: I recognise that last point
but it might well be that in the very small businesses the owner
is working so hard themselves to keep the business going that
sometimes they have not got the time or even the inclination.
They lose the will to live, quite frankly, at the end of the day
to sit down and then do the paperwork, a lot of which is rules
and regulations from government, and maybe that is where they
fall foul sometimes of some employment legislation because they
have not got the time to keep up with it. There is a whole mountain
of paperwork there.
Ms Reed: Which is why we very
much welcome the work the DTI is doing with ACAS at the present
time and with the Small Business Council to try and ensure that
the forms of advice and support available for small business matches
their needs. And that they can have workplace visits from experts
who can help them with introducing basic employment policies within
the workplace. So we recognise that small businesses do face challenges
but we welcome the fact that the DTI is seeking to channel resources
to assist them.
Mr Exell: It is worth recalling
that the Kingston University research for the DTI did find that
complying with employment regulation was quite a minor issue for
most small businesses.
Q32 Richard Burden: Can we go back to
the Working Time Directive? I am not entirely clear whether you
are saying that removing the opt-out would improve productivity
or whether you are saying that removing the opt-out would have
a detrimental effect on productivity.
Mr Brinkley: We think it would
have a positive effect. There is clear evidence that there is
a relationship between these very long working hours and stress
and sickness at work. There is also a relationship between these
very long hours and workers making more errors when they are actually
at work, which ultimately is going to impose a cost on firms in
terms of the reliability and the quality of the services and the
goods they are producing. So we would see this as a productivity
boosting measure rather than a productivity decreasing measure.
Q33 Richard Burden: So what you are saying
is that moving away from a long hours culture would improve productivity?
Mr Brinkley: It is our view that
this would help.
Q34 Richard Burden: Do you see the removal
of the opt-out as the same, because they are different issues?
There is an argument that says you could come back with a long
working hours culture and at the same time keep some kind of individual
opt-out?
Mr Brinkley: The experience in
the United Kingdom does not suggest we would have to wait an awful
long time for that to happen. Our calculations are that we would
take forty years at the present rate of progress to get down to
the European average of people working more than 48 hours if you
keep the status quo, so that is an option I do not think is really
viable. I do not think you have any choice. Either you get rid
of the opt-out or you retain the long hours culture, but I do
not think you have a halfway house between the two.
Q35 Richard Burden: Why do you think
generally that businesses are opposed to removing the opt-out?
There will be some that just think that if people can work all
hours God sends then that is good for productivity, and there
will be some that say that, but presumably there will be an awful
lot more that will say "We do not agree with that, but still
we think removal of the opt-out would be detrimental to us".
Why do you think they think that?
Mr Brinkley: I think there is
a slightly nuanced response from business, perhaps rather more
nuanced than is sometimes said. Those firms which are actually
working quite comfortably within the 48 hours do not care much
one way or the other, but because it is not affecting them they
do not feel they have to support it. There are others who perhaps
are not affected very much by the 48 hour one but are just opposed
to it in principle, and they do not like the idea of the government
intervening in their particular work organisation issues, and
then there is a disappointingly large number who do it because
it is the easy thing to do. It is firms taking the low road, which
we referred to earlier, in that by going down the path of longer
hours you can get by, you can survive, you can compete on that
basis, but it is very much the easy option. It is not going down
the route of high investment and high productivity. If long hours
were really essential for improving business efficiency then the
United Kingdom would be up towards the top of the European league
in terms of workplace productivity, not at the bottom. Certainly
if you look round Europe, they have clearly seen a reduction of
the long hours culture there go hand in hand with very long high
levels of work place productivity.
Q36 Richard Burden: I am not trying to
take up the issue of long hours culture and I accept your views
that if you give any concessions on an opt-out you encourage that,
but let me put to you an example that I have had put to me. I
work quite closely in the motor industry particularly with the
performance engineering motor sport industry, they have lobbied
saying "The area we are involved with is in getting cars
ready to race on a weekend, and if you have not got the car ready
it does not mean the race does not start you just have to do it,
and if that means working through the night before that is what
you have to do", and I am not talking about the very wealthy
teams here but right down to the small firm that produces widgets
that go into a bit that goes into a bit that is needed at the
weekend. Now, what they are saying is not that they want a long
hours culture, but that there will be times where people will
have to work incredibly long hours, and they do not have a problem,
they say, in terms of coming to a voluntary agreement with their
employees about doing that, but they have a problem with codifying
that in a way that can meet a whole lot of forms to be filled
in at the end of the year or the end of the month. Do you recognise
that as being a potential problem in that example or perhaps in
other examples in the motoring industry, or elsewhere? The entertainment
industry?
Mr Brinkley: If they can get to
a voluntary agreement, the question is why have not they done
it already? Why have not they moved to a more flexible system?
Q37 Mr Evans: Some would say they have
done it already, that they would not be able to carry on doing
it if the opt-out is removed, because you could not come to a
voluntary agreement and have an opt-out. That is what they are
saying?
Mr Brinkley: In our view the opt-out
and the regulations contain quite a lot of flexibility inside
them. It does not say you cannot work more than 48 hours over
a weekend if you are going to get ready for a race; it says you
cannot work more than 48 hours consistently over a long reference
period.
Q38 Mr Evans: In terms of the model of
social partnership that you are talking about, you do not want
to have in a sense regulation for the sake of it, and if it can
be done by some kind of social partnership model on the ground
whereby, perhaps through representative unions and in other cases
not, employees and employers are agreeing a fair system of regulation
for themselves, how could that be developed in the United Kingdom
alongside a removal of opt-out which it could be said would prevent
them doing that?
Ms Reed: In some ways that option
is already available to us, not only in the Working Time Directive
but also in other European legislation, in that all Directives
provide for a derogation for the implementation of the regulations
at enterprise level or national level through collective bargaining.
Q39 Mr Evans: So you are not opposed
to a derogation?
Ms Reed: Well, our view is in
the context of working time but also in the context of other forms
of regulation that collective bargaining offers the most sensible
way forward to ensure that the minimum standards which are set
out in the legislation are introduced in a way which meets the
needs of the workforce of the particular enterprise but also the
needs of the employer. That does not mean we are talking about
a diminution from the minimum standards or any derogation from
those minimum standards, but introduce the standards in a way
that is flexible. And working time is probably the best example
of that where we have an individual right to request to work flexibly
which we would suggest maybe is not the best way forward to try
and reorganise working patterns to meet the needs both of employers
and individuals. We want to retain that individual right but we
believe the aims of that individual right can be best achieved
through a collective route, through social partnership within
organisations. And our Changing Lives project shows examples of
where trade unions have worked very successfully to match both
the employer's operational needs and also the workforce's needs
in terms of caring responsibilities, and also requests for career
breaks and other forms of flexible working patterns.
Mr Exell: In the Changing Lives
project—which the TUC was one of the sponsors of—there
was a very interesting experiment in Bristol libraries, for instance,
where working together the council was able to combine offering
flexibility for staff with caring responsibilities with opening
up the library at times at the weekend and in the evenings, for
instance, when it had not previously been available for local
citizens. One of the reasons why we support social partnership
is we think that you need regulations to set up basic standards
but, if you want to apply things in the context of a workplace
without a heavy-handed approach, something that meets the needs
of the people that are going to be affected by it, then unions
and employers who know the company that they are talking about
are best placed to do that. For instance, when the Parental Leave
Directive came out there was provision in that that we took up
saying "We would like to see this Directive implemented on
a social partnership basis with government, unions and employers
coming together to try and work out how best to apply this in
the United Kingdom." Unfortunately we were the only people
saying that, so it was not implemented in that way, but we are
certainly willing to take up our role to promote flexibility.
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