Examination of Witnesses (Questions 80-99)
CONFEDERATION OF
BRITISH INDUSTRY
2 NOVEMBER 2004
Q80 Chairman: Mind you, it does not make
much difference if you throw more bodies at them if you do not
train them to do the job?
Mr Cridland: Indeed.
Chairman: And that is very often the
case.
Q81 Richard Burden: I was going to ask
you to define what you meant by "flexibility", but I
think you have been round that track quite a lot. I would like
to pursue with you this issue of constraints on flexibility. Are
you saying that any increase in protections from what they are
for employees is a threat to flexibility and therefore a bad thing?
Mr Cridland: No.
Q82 Richard Burden: From where we are
now?
Mr Cridland: We are not saying
that. Even from where we are now there are measures which we have
actively supported. To give an example, I would look at the age
discrimination legislation that will come in in 2006. We support
that in principle because we believe that is one area of the labour
market where security and protection is currently not adequate.
We have quite strong views about how it should be implemented
and how we get win-wins and avoid the downside effect of unnecessary
employment litigation, but that is a measure which in principle
we would like to see come in. On agency temps, in principle we
believe there is a need to fill the gap of employment protection
that currently exists for agency workers. Our concerns about the
proposal are the nature of the proposal, not the principle of
the proposal. So we certainly are not saying the status quo is
okay; but we could not possibly have anything else.
Q83 Richard Burden: That being the case,
is it not a bit sloppy to talk about 21 bits of extra regulation
and say, "There is an aggregate effect here", on the
one hand, and say on the other hand, "Actually it is not
about whether there is too much or too little, it is about whether
the regulation is right and whether it is applied properly."
Continuing to talk about 21, does it not encourage sloppy thinking?
Mr Cridland: It would if we based
our whole argument on the aggregate burden. I think the aggregate
burden is really a point about digestion. Small firms often say
to me that they cannot cope with the amount of extra employment
regulation that they are having to deal with, they simply cannot
keep up with the number of changes to regulations, and, indeed,
the recent development of having regulation days twice a year
was designed to help them with that process of digestion so they
could timetable when they would need to change their practices.
I think the aggregate issue is simply about the tide of regulation,
and I think we need to recognise, particularly when the TUC and
other organisations are arguing for even more, that we have had
a lot, but, taking that as a headline point, you are absolutely
right, it is then a case of how the regulation is designed and
implemented, because one of those 21 was the provision in the
2002 Employment Act to provide employees with a right to request
flexible working. That piece of regulation, I think, is a benchmark
for how to get things right. I do not meet anybody in the business
community who believes that regulation has done any harm, and
I meet a lot of employers who believe it has helped to provide
a framework within which their managers can sit down with their
work colleagues and agree, in the way that Neil was describing,
sensible working hours. It is a million miles away from the disaster
we had with the Working Time Directive, which is another of the
21.
Q84 Richard Burden: Let us just pursue
the way things are implemented. You have used the words about
the fact that you have got red lines, and one of the red lines
in relation to the Working Time Directive was saying that employees
should work with their employers to adopt flexible sensible working
arrangements, but your red line was the absolute right of an individual
to say that they want to work more than an average. I understand
that. Are there any bottom lines on that? Is it provided that
an employer can say, "This person has agreed it", actually
somebody could be working 50 hours, 60 hours, 70 hours, 80 hours,
and that is an absolute right?
Mr Cridland: Like all absolute
rights, it is then prescribed by certain agreed necessities. If
there is a health and safety risk, clearly somebody cannot have
an absolute right to work in a way that puts other colleagues
and customers at risk. We have always recognised that with lorry
drivers, with airline pilots, and we would recognise that wherever
there is a health and safety case, but most of the Working Time
Directive is not a health and safety directive, it is a mainstream
employment directive. We would then accept there are restrictions
related to potential abuse if an employer, because of an unequal
power relationship, is getting agreement by some form of coercion.
That is clearly unacceptable. We have seen a few examples, but,
I would stress, they are a minority of examples, where employers
have asked an individual to sign an opt-out to the Working Time
Directive when issuing an invitation to come and work for them.
I do not think that can be justified—that is clearly not
an equal power issue—but where an individual is making a
free choice and where they are not offending one of those health
and safety examples, just as the Working Time Directive gives
them an absolute right to say, "No, boss, I will not work
any extra time and you cannot make me", so we believe it
should leave them with the right to say, "Yes, I consent
in working this extra overtime because I want to and I want the
money and I do not need a trade union or a government or a European
Commission to tell me I cannot."
Q85 Richard Burden: So on the opt-out
would you support a regulation which said that an employer is
not allowed to use any pressure on an individual to reach an agreement
to opt out to work longer than 48 hours? A specific regulation
covering that?
Mr Cridland: Subject to the points
of detail, yes, and we have been involved in talks with the DTI
which, interestingly, the TUC would not become involved with,
to try to reach an agreement on perceived abuse. One particular—
Q86 Richard Burden: No, no, I am talking
about a specific regulation to cover the rogue employee you were
talking about?
Mr Cridland: Yes, we would, subject
to the detail. Absolutely.
Q87 Richard Burden: That is useful to
know. Can I move on to something that the TUC said, because in
terms of the way they were approaching this, they end up with
different conclusions from you but you both argue the same kind
of thing on working time, and that is that you actually want employers
and employees to agree arrangements locally that promote flexibility
but also promote a rise. You end up with different conclusions
on that. You would agree with that; that promoting that kind of
discussion locally is actually a good thing?
Mr Cridland: Yes, but the difference
is we believe that is achieved by retaining the opt-out and they
are determined to have the opt-out scrapped, which is a pretty
big difference.
Q88 Richard Burden: You end up with different
conclusions on that, but if you think that the process of discussion
to agree working hours or, indeed, other things about the way
a business is operating—the prospects for the future, how
many jobs there should be—promoting discussion on those
is actually a good thing?
Mr Cridland: Yes, indeed.
Q89 Richard Burden: So why did you therefore
consider rules that promote that kind of social partnership to
be regulation and therefore undesirable, for instance Information
and Consultation Directives?
Mr Cridland: We opposed the principle
of an Information and Consultation Directive on an issue of subsidiarity.
We did not see why a business employing fifty people in Barnsley
should have the same rules on how it talked to its staff as a
business employing fifty people in Barcelona.
Q90 Richard Burden: But you said that
if it was domestic law you would think it was a good thing?
Mr Cridland: If it was domestic
law we would have looked at it differently, yes. Our principal
concern is that the TUC still tend to go to Brussels to force
a labour government to accept legislation, where it is outvoted
in the European Council, that it cannot get through domestic discussions
between the CBI, the DTI and itself.
Q91 Richard Burden: I want to get that
clear. Laws to promote social partnership, information, consultation,
collective bargaining, new laws to underpin that and promote it
as a way of avoiding unnecessary regulation, are things that you
would actually support provided in was done in UK law rather than
in Brussels?
Mr Cridland: Once we lost the
battle on having that directive, we sat down and reached an agreement
with the TUC and Government in tripartite talks chaired by the
Employment Minister that provided the framework for the regulations
which will implement information and consultation. So we are a
pragmatic organisation; clearly business will not vote for new
bits of regulation that it does not believe are necessary; but
if democratically elected politicians make that decision, we will
then work with the trade unions and with government to make sense
of those regulations, and I think it has been recognised by ministers
that the high level agreement reached between the CBI, the TUC
and the Department of Trade and Industry on information and consultation
has provided the UK with a much more sensible basis for implementing
that directive in the UK than the default mechanism which we would
have had to have accepted, what is written into the articles,
if we had not sat down and had those talks.
Q92 Richard Burden: And on working time
you would agree for a regulation to come in that would require
discussion between employer and employee before any opt-out was
agreed?
Mr Cridland: We accepted an invitation
from the DTI to sit down, they hoped with the TUC, but the TUC
did not attend the talks, to discuss what abuses there were to
the Working Time Directive that needed to be addressed by regulation,
and we support regulations that would deal with that abuse, but
I do need to come back to this.
Q93 Richard Burden: That would include,
would it, joint discussions between employees and/or their representatives
as they existed and the employer in joint agreement. It would
include that?
Mr Cridland: It might or it might
not. It depends on whether the trade unions accept the principle
of the individual opt-out.
Q94 Richard Burden: No. I am asking your
views about what would be a good thing?
Mr Cridland: Our view is that
individual working hours are a matter for agreement between an
employer and the individual employee. We are quite happy that
any abuses to that are tackled, but we believe it is a matter
of individual choice. The reason I am hesitating with my answer
is because if the trade unions argue that you can have whatever
talks you want on working time but it is between an employer and
a trade union and, as a result, you do not need the individual
choice of the opt-out, we would not have agreement with the TUC.
We believe that individual opt-out, so long as there is no pressure
on the individual to sign it, is an essential human right.
Q95 Judy Mallaber: Following on from
that, I am becoming confused as to when you regard something as
a regulation, which therefore goes on your list when you are doing
your, I had better not say propaganda, when you are making your
case that having 21 regulations is just too much. I am not quite
clear when something becomes a regulation that has to go in that
list and when it is one that does not count. You came perilously
close to saying that information and consultation would have been
all right if it had been introduced through domestic law but not
because it was introduced through Brussels, which did not seem
to me to fit in with an argument about whether it was a bureaucratic
explanation or not. Can you maybe explain a bit more clearly?
Mr Cridland: My number 21 is simply
a factual statement of how many major pieces of employment regulation
there have been since 1998. So it is a list. The reason for mentioning
it is the aggregate burden on employers. Within that list there
are some measures which were decisions of this Parliament, some
measures which were decisions of the European Council and the
European Parliament; some measures which have been implemented
rather well, some measures which have been implemented rather
badly; and we need to take each of the 21 separately. On each
of those we would have a position on how much of a negative impact
they have had on labour market flexibility. What I have tried
to do is illustrate the two extremes with the example of the Working
Time Directive, which I think has been a bad piece of legislation
very badly implemented, although there is a sensible piece of
legislation lurking there, if it had ever been written, and at
the other extreme the right to request flexible working, which
I think has been an unqualified success. So we are not making
an argument that there are 21 pieces of regulation that should
be got rid of. The CBI is not advocating getting rid of any of
those 21. We are saying that some of them have cramped our members'
essential labour market flexibility and in each and every case
could be improved.
Q96 Judy Mallaber: Can I pursue the successful
one that you mentioned a bit further about the entitlement
to request flexible working opportunities? Have you any information
on the volume of requests that have been made to your members
from their staff and also how your members have responded to those
requests?
Mr Bentley: We have the specifics
in terms of the number of requests made. Over three-quarters have
been accepted by employers and only 8% rejected on objective business
grounds, and what we have seen is a lot of members already had
in place processes for discussing flexible working with parents
of young children to make sure that the framework is in place,
to make sure that employees' needs were met alongside those of
the business needs. It has been taken up very positively. We have
seen our results showing that, DTI results showing that and other
surveys showing that employers have met this piece of legislation
in terms of not just in the letter but also in the spirit; but
it is very much because it is based on a right to request, it
is not an absolute right, and there is dialogue and there is accommodation;
but, of course, where employers do feel that they cannot meet
the request, and we have to be clear that it is not always possible
to meet every individual's request for flexible working, for objective
business reasons, then it is right to say no.
Q97 Judy Mallaber: There is a right to
object and reject and you have said it has not created particular
problems, presumably because employers can just say no, but how
far do you think we can push it to make those employers that maybe
do not operate in a very sensible way operate in that way? I recall
a previous inquiry I was on on another Committee about part time
workers, and we had an employer from the textiles industry saying,
"It just is not possible to introduce part time workers who
just do not understand our production process." To me that
just seemed to be an example of rigidity which was probably not
necessarily showing very good management skills, because it implied
that that company would lose skilled workers who had learnt how
to do that job over many years if they then needed to change their
working hours. Can you say some more about whether you feel that
all that that directive has done, all those regulations have done,
is to encourage the good, productive, encouraging employer anyway
and have not done much about the more negative approach of some
other employers?
Mr Cridland: I think the fact
that in 8% of cases the request has been turned down is the real
signal of the success of this regulation. I would have been very
disappointed if it had been 30% of cases that had been turned
down. So in the vast majority of cases the employer entertains
the request of the employee, but I would argue that in those 8%
of cases there will be objective reasons as to why it was not
possible; and the reality of the situation is flexibility does
apply very differently across the economy. It is no surprise that
some of the best examples of benchmark companies out there doing
the most progressive things on working time flexibility are High
Street businesses that are consumer facing, because that is where
you get the most obvious win-wins. People want to shop, have services
provided on a 24/7 basis. You need to provide staff to meet that
requirement. There are peaks and troughs in that demand and you
can get a fit between the customer need and the individual need.
So a worker who wants to fit his or her hours around childcare
responsibilities might actually, with a partner, be prepared to
do different work, different shift patterns, in relation to the
customer that meet the customer's need. It is, I think, rather
different in a more traditional manufacturing environment: because
if you have got a more traditional fixed production line and you
need 80 people to turn up for the nightshift, you are hamstrung
if half a dozen of those people do not want to work beyond halfway
through the shift. So what you tend to find in those manufacturing
environments is a different form of flexibility, a form of flexibility
where the whole shift get together and says, "Actually, we
can get all of our work done an hour earlier and knock off",
and the employer says, "Yes, as long as the production quota
is met, fine", or on a weekly basis, "Perhaps we do
not need to work beyond lunch time on Friday because we have achieved
our targets", but in a fixed manufacturing environment there
might be more shift flexibility but less individualised flexibility
because people are not working in the way that they would be in
a shop directly servicing customers on a much more individualised
basis. It will vary, which is why there has to be a complementary
business case to the case of the individual. What I think is clear
is that we would not have had this success that we have had with
the right to request five years ago. Where regulation works well
is where it catches the tide of a change of view in society. We
have all become more flexible to what we are prepared to accept,
employers as well as employees. There is greater demand for flexible
working, there is more willingness by employers to accommodate
it. So the regulation was fit for the moment because employers
are finding that actually they can break down some of the old-fashioned
barriers between full time work and part time work and be much
more accommodating. I think five years ago the debate was not
anywhere near as ripe as it now is.
Q98 Judy Mallaber: What about those employers,
like the ones I have mentioned, who seem to think that because
you have got a fixed production line it is not possible to work
part time without even looking at whether you might get two part
time workers to cover that area? I have firms in my constituency
who do operate flexibly on production lines and others that clearly
cannot envisage such an idea. There does not seem to me, when
I look at their production processes, to be much difference between
them?
Mr Cridland: Each case will vary
and needs to be looked at on its merits, but ultimately those
businesses that just slam the door in the face of the employee
and say, "I am not even prepared to think about it",
will lose out in the war for talent, but if they play their cards
very badly in the way I have just described, they will offend
the regulation, because the individual has a right to request,
they have a right to have their request seriously considered,
they have a right to have written reasons which give a clear business
case; and they can go to a tribunal if they think the employer
is just ignoring and refusing to engage, but we cannot get everybody
to catch up with the tide; there will always be laggards. I do
think overall the fact that only 8% of requests have been denied
is a success and one that employers are as happy to see work as
employees have been.
Q99 Judy Mallaber: I take it from what
you are saying that you would endorse the recent pamphlet of the
Secretary of State in which she said about employers that had
a happy work force, "Instead of imposing long and rigid hours
on their workforce they understand that by giving their people
more choice and control over working hours they achieve higher
productivity and better results". That is an approach you
endorse?
Mr Cridland: Yes, indeed.
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