Examination of Witnesses (Questions 40-59)
TRADES UNION
CONGRESS
2 NOVEMBER 2004
Q40 Richard Burden: One further question:
you say, and I cannot remember where, that you reckon that the
DTI have overestimated the negative effects of removing the opt-out.
Could I ask what estimates you have made of the other way round?
Mr Brinkley: We have looked at
the Labour Force Survey, which is the source of most of these
figures, and where we think that the DTI has over-interpreted
the results from that survey, is that they have assumed that everyone
who says their contracted hours are more than 48 hours are being
paid for that, and that is not what the survey tells you. All
it tells you is that these hours are contracted; it does not tell
you whether you are being paid or unpaid for them, and our estimate
is looking at—I think a more reasonable interpretation of
the question—which is that the number of people working
beyond 48 hours contracted and paid is much less than the DTI
is suggesting. So the potential difficulty you have of going down
to the 48-hour limit is therefore a lot less than they are suggesting.
Q41 Chairman: Can you tell us, on this
issue, what your experience is of European adherence to the Working
Time Directive? One of the problems that is often suggested about
the British interpretation of European regulation is that in the
first instance it should be adhered to whereas it seems in some
countries that there is more a cultural voluntarism, if I can
put it as discreetly as that!
Mr Brinkley: This is often difficult
to actually pin down, exactly how rigorous our European competitors
are in enforcing or implementing European regulation or legislation.
I would say in most countries the Working Time Directive has not
been regarded as a very big deal either way, because in most of
these countries the national framework, the national legislation,
is already setting working hours well below the 48-hour limit;
so for most countries this really was not a big deal. Certainly
in the UK—and to some extent Ireland—where this was
seen as a major change in the way the labour market was regulated,
we are the ones that tended to have the biggest problems with
it. As I say, in that particular instance, I can see why most
other European countries would not see this as a major problem.
I suspect we may have more problems, less on the labour market,
more on product regulation areas, and certainly there are some
examples, I think, where you might say that implementation of
some of the directives in this country has been probably a bit
over-enthusiastic, compared to those elsewhere.
Q42 Chairman: Have you made any assessment
within the membership of the TUC, or the unions, and the areas
where the unions are negotiating? To what extent would the Working
Time Directive be unnecessary, because by negotiation and by custom
and practice the hours have been less than 48?
Mr Brinkley: By and large where
union negotiations and agreements are in place, firms are pretty
close to complying with the directive anyway, particularly in
engineering and areas such as retailing, and so on. That is not
a huge problem. There are greater difficulties, I think, in some
particular industries, notably printing, where there is a tradition
of long hour working and in areas such as construction, which
again has a tradition of long hour working. So there are difficulties
for unions as well as gains, but I would say, by and large, where
collective bargaining influences the outcome, then you have got
working arrangements that look fairly sensible and certainly those
firms, I think, would cope very easily with moving towards the
end of the opt-out.
Q43 Chairman: The position of trade unions
in the construction industry is somewhat weaker than it used to
be, is it not?
Mr Brinkley: Yes.
Q44 Chairman: Whereas in printing it
is still pretty well-organised. Union organisation does not seem
to be the factor there, or is it just small printing businesses
have a difference in culture?
Mr Brinkley: I sometimes think
printing is almost a unique culture industry in certain respects.
There are not too many parallels, I think, we would want to draw
across from it.
Q45 Chairman: That has been my experience
as well.
Mr Brinkley: I would say printing
is the one we have most in mind when we are talking about the
difficulties trade unions will have, in some areas, convincing
their own members to be sensible and plan to reduce their own
working hours. But, as I say, generally we see collective bargaining
and collective bargaining arrangements as helping companies cope
with the directive quite easily.
Q46 Chairman: So, set aside printing
for the purposes of the discussion, what you are saying is that
you want the Working Time Directive to be introduced in order
to protect what are predominantly non-unionised and non-organised
sections of the labour market?
Mr Brinkley: That would have a
major effect on that, and also have a major effect on some of
the non-manual workers, particularly professional managerial workers,
some of which are organised on the public sector, but a lot are
not. So we are approaching this not so much because we think this
is going to get huge gains for union members in particular, but
because it will give huge gains to the workforce in general, and
that has been our approach on regulation, really across the board.
If you look at the national minimum wage, hardly any union members
get that, and quite right too, otherwise unions would not be doing
their job, but we still think that is a very important labour
market regulation because it primarily increases the wages of
the most vulnerable in the workforce.
Q47 Chairman: It also has the advantage
of raising the level of the water for all the other boats as well,
does it not? If you raise the national minimum wage, everything
goes up?
Mr Brinkley: It has not up to
now. It may now be starting to. The minimum wage has finally got
up to a level where we think it may be having some impact on wage
rates above. I think what has been striking so far is the lack
of knock-on effects actually.
Q48 Mr Evans: Why is the TUC so in favour
of the job destroying Temporary Agency Workers Directive?
Mr Brinkley: We certainly do not
think it job destroying. The two European countries where temporary
work is probably the most developed, at least in terms of agency
work, are France and the Netherlands. The Netherlands, in particular,
has a huge agency labour market, and they have done it against
a background of pretty strong employment regulations. I do not
think the evidence really supports the idea that regulating agency
workers is somehow going to decrease their use in the economy.
Q49 Mr Evans: The CBI certainly does
and the Chartered Institute of Personnel and Development. They
both say that it is going to make Britain less attractive for
inward investment, it is going to make companies that would otherwise
use temps decide that they are not going to do so because of all
the extra red tape and the extra cost that is involved in the
whole thing; and a number of workers that get into the labour
market in the first place via agency jobs are not going even to
get that. I do not know if the general idea is to try and make
Britain less competitive in this area. Is this what you want?
Mr Brinkley: Let's take these
three arguments one by one. Inward investment: I think it is extremely
unlikely that a huge multinational company coming in in a high
value-added service or a high value-added good is going to be
concerned about the regulation of temps. These are companies which
operate in labour markets throughout the world, including those
in Europe, and their decision is going to be based on other things
than what—to them—is really a very minor measure.
Secondly, will this actually reduce job opportunities? We do not
think so. Agency work obviously has a role to play in getting
people into the labour market, but we do not see it as a major
one or a decisive one. Thirdly, companies by and large will go
on employing temporary labour for the reasons that they always
have done: to provide cover for maternity leave, sick leave, to
cope with the ups and downs in production, and those overwhelming
economic and industrial reasons will continue. We have no reason
to think that they will not go on employing temps to meet those
sorts of demands simply because you have made what is, after all,
a fair and modest change in the way agency work is regulated.
Mr Evans: We will ask the CBI shortly
whether big companies are not bothered by this particular revelation.
Q50 Chairman: In some respects would
you say that the agencies are now assuming the HR function that
the personnel department in days of old used to fulfill? They
take on the responsibility of hiring people, of agreeing a rate
for them, and they do so because it is virtually subcontracted
to them?
Mr Brinkley: I think it is certainly
true that the agencies are providing some sort of filter role
for employers. Employers go to agencies and will specify they
want a high standard of work in a particular job quite rapidly,
and they are relying on the agency to do the filtering, to do
the interviewing, to make sure they are selecting people with
the right skills. That is basically what they are paying them
their fee for.
Q51 Chairman: But are we not maybe putting
apples and oranges together in the same bag here in the sense
that for low-wage, relatively low-skilled employment in some respects
the agencies just do the dirty work for the management; but what
about that sector of the economy where it is high-wage, high-skilled,
individualised working, where it is as much for the convenience
of the individual worker. I am thinking of IT or some of the design
functions of engineering and things like that, where people are
literally parachuted into a job for a period of time and these
folks do not want to work 12 months of the year; they do not need
to. Are we perhaps lumping them in with the university student
who needs a job in a call centre and goes along in early June
says, "Give us a job", sort of thing, and they get one
until September, or the mum who just needs a temporary job, and
the agency is the place to do it, although quite often the result
is both of them get exploited but the others do not. Are we maybe
not confusing different bits of the labour market under the umbrella
of temporary working?
Ms Reed: Looking at the proposed
regulations on agency workers, there is no reason to presume,
it is certainly not our conclusion, that the regulations will
impact in any way upon the high-skilled, high-paid sector of the
agency workers regulations, of the agency sector. Partly because
the rights to equal treatment contained within the agency sector
only give the agency worker the right to parity with user members
of staff; the right to equal treatment does not go the other way.
So if a high-skilled worker has been employed on a short-term
assignment because they offer a particular skill; the new rights
would not mean that the permanently employed members of staff
would have the right to equal treatment with that high-skilled
member of staff. What the Agency Worker Directive will do, however,
is to provide a framework or a floor of rights for the low-skilled,
low-paid workers who often access the labour market through the
agency sector. And the DTI's own regulatory assessment on the
impact of the directive showed that the levels of pay inequality
faced particularly by low-paid workers within the agency sector
is very high, in the region of £2-3,000 a year, which we
would recognise as being a major sum of money for particularly
low-paid workers. We are also concerned that many employers report,
and, indeed, agencies report, that they have a problem in recruiting
enough agency workers to match employer's demands. One of the
reasons for this, we believe, is that agency work is not an attractive
option because agency workers do not benefit from most employment
rights contained within UK employment law, including family friendly
rights, but also job security rights, unfair dismissal rights
and rights to redundancy pay. And the Government's own statistics
have shown that, of all forms of work, agency work is probably
one of the least attractive within the labour market. Only 30%
of agency workers would choose agency work over a permanent form
of employment. We recognise that in the changing labour market
employers do need more flexible forms of work, but let's employ
fair and attractive terms and conditions for those.
Q52 Chairman: I remember being lobbied
a couple of years ago by the people who, as it were, employed
the high flyers, or who recruit the high flyers, deploy them and
then they leave. Are you telling me that the fears they expressed
to me then have now been largely addressed and that they are not
concerned in the way that once they might have been? Because I
get the impression talking to employers, as distinct from the
agencies, that the message has not got through.
Ms Reed: Our view is that that
concern is misplaced because, provided those high-skilled workers
receive at least the minimum standards that are provided for permanent
staff within the organisation, the regulations will not impact
upon their deployment or use within the labour market. The aim
of the Agency Worker Directive, as with all employment regulations,
is to provide a floor to ensure that the most vulnerable low-paid
workers benefit from fair treatment in their work.
Q53 Chairman: I have no problem with
that side of it. What I do have is a concern that has been expressed
to me and has yet to be properly addressed of this rather small,
privileged, in fact, very fortunate group of people who can, as
I say, literally parachute themselves into the labour market in
well-paid employment and can only do so by the mechanism of specialised
agencies who deal with that. It is not exploitation, it is mutual
convenience, and usually rather large sums on both sides, I have
to say. I can see the temporary position, but I think that somehow
the message has not got through in the way that it should have
done. We may have to call in people like this to get their fears
and anxieties, because they are quite often the kinds of people
whose presence creates employment, has a cascade effect further
down the line, and it is a bit like the work we have done with
ECGD. The important thing is that we get the contracts, because
then the supply chain comes into play at a later position. I certainly
am a little concerned about the somewhat simplistic almost knee-jerk
response that comes from yourself; and we will be having the CBI
in a short while and we will have a look at their knees as well,
in a professional sort of way!
Q54 Miss Kirkbride: I just want to be
clear about what the floor was. You mentioned when you were talking
to the Chairman and also to Nigel about redundancy pay. Does redundancy
pay form part of—
Ms Reed: That does not form part
of the Temporary Agency Worker Directive. The Temporary Agency
Worker Directive would give agency workers equal treatment on
issues relating to pay, holidays, hours. It would also, importantly,
give agency workers the right to access training opportunities
within organisations. The reason why I mentioned the issues of
unfair dismissal and redundancies is because alongside debates
taking place on the Temporary Agency Workers Directive, the DTI
is also carrying out its review on employment status, which looks
at those categories of workers who fall outside of UK employment
legislation. Agency workers are probably the largest group of
workers who do not benefit from existing UK legislation. But the
European Directive, that the question was focused on, would provide
only equal treatment rights in terms of pay, hours and holidays.
The issue about employment status and access to unfair dismissal
rights or redundancy pay is matter for debate within the UK and
we await the long awaited response from the Government on employment
status.
Q55 Miss Kirkbride: Your view of that
would be?
Ms Reed: The TUC's view is that
all workers, regardless of the nature of their employment relationship,
should have access to the same range of employment rights. The
reason for that is that—
Q56 Miss Kirkbride: You are a temporary
worker and you get redundancy pay. I do not get it!
Ms Reed: You only qualify for
redundancy pay if you have been in the workplace for over two
years, and most agency workers would never qualify for that right.
However, we are conscious that in some sectors, in manufacturing,
and in the public sector, agency workers were being employed on
a much longer term basis. These workers often have significant
responsibilities in terms of mortgage and taking care of their
families. We believe that it is unfair that those workers simply
can be fired at the will of the employer without needing to go
through any form of procedure or needing to pay redundancy pay
to those individuals; but the vast majority of agency workers
within the UK would not qualify for those UK based job security
rights such as unfair dismissal and redundancy pay because their
assignment would not be long enough in the workplace to qualify
them for those rights.
Q57 Miss Kirkbride: You say pay on the
European directive, does that include a pension contribution or
does that not form part of the pay?
Ms Reed: Our understanding of
the definition of `pay' is the same as equal pay as within EU
law. However, there have been debates, or there were back in 2002,
as to whether the directive should cover pensions or not. The
TUC's view on pensions is that occupational pensions should be
covered by the directive—
Q58 Miss Kirkbride: For temporary workers?
Ms Reed: —to protect those
members of staff who are on very long-term assignments, particularly
in the public sector but also in some forms of manufacturing.
However, as with all equal treatment rights, there is an objective
justification defence for employers; and our view is that in the
vast majority of cases where agency workers are on short-term
assignments employers will not need to give rights to agency workers
to access occupational pension schemes because the equal treatment
rights would not apply to them. That does not mean there is a
need to look at some form of pension provision for agency workers,
who are often low-paid women workers, but that is a different
debate, a much wider debate.
Q59 Richard Burden: Could I return to
the question the Chairman was asking before, because I received
similar representations a couple of years ago and one of the areas
of concern appeared to be some confusion about whether the Temporary
Agency Workers Directive was about regulating the relationship
between the agency worker and the agency or whether it was about
regulating the relationship between the agency worker and the
employment, the place in which they were working. Again, for those
people who are genuinely poorly paid with poor conditions, and
so on, that is less of an important distinction because they probably
need protection both ends. For the high flyers, it might be a
bit more of a complicated area about what it is we are trying
to regulate and which relationship we are trying to regulate.
Has that come up with you, and have you any idea of that kind
of dilemma about which relationship we are regulating?
Ms Reed: The directive seeks to
in some ways regulate both relationships, but not in a heavy-handed
way. In terms of the relationship between the agency worker and
the agency, the aim of the directive is to identify the agency
as being the employer for the agency worker. We are very conscious
in the UK that agency workers already do qualify for certain basic
employment rights, such as sex discrimination and race discrimination
cases, because those rights apply to all workers. However, many
agency workers find it very difficult to enforce those rights
because they do not know who to bring the legal claim against.
Do they bring the legal claim against the agency itself or do
they bring the legal claim against the user employer? And the
law on who is their employer is incredibly complicated, and it
changes from week to week—it changes according to which
employment tribunal happens to be sitting at the time. We believe
that uncertainty is unhelpful for both employers and for employees.
So we welcome the directive, as it would make it clear that it
is the agency who has the responsibility in terms of employment
rights and in terms of regulating the employment relationship
with the agency worker. Having said that, what the directive also
does is to recognise that, when we are talking about lack of access
to equal treatment for agency workers, the comparison needs to
be made not between agency workers and agency worker but between
the agency worker and the worker with whom they are working alongside
who is permanently employed by the user employer. So in terms
of establishing whether the agency worker is accessing equal treatment,
they will look to the employee who is employed by the permanent
employer, by the hiring employer. The reason for that is to say
we need to ensure that agency workers are not exploited and do
not receive lower rates of pay than is the going rate for the
job that they are doing, to ensure that they also get fair treatment
in terms of holidays and hours and therefore their comparison
should be with the worker that they are working alongside.
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