APPENDIX 1
Memorandum by Amicus
SUMMARY
In this submission, Amicus has concentrated upon
the need to define what is meant by flexibility in the labour
market, its impact upon investment in the UK economy and the issues
which need to be addressed to ensure that UK workers are not disadvantaged
by the failure to provide appropriate employment regulation. Amicus
has also addressed the qualitative issues which employment regulation
impacts upon in terms of job category and earnings. Although the
Committee has identified labour market flexibility as its key
issue to be considered, Amicus has also taken the opportunity
to raise the overall need to tackle the strategic training needs
to cope with skill gaps and shortages.
The submission argues:
— Any debate about flexibility must
address the positive aspects of employee protection as well as
the restrictive approach of employer freedom to hire and fire
at will.
— Employers argue consistently for
the limiting of employee rights on the false premise that this
has a negative impact on productivity.
— The failure of government to recognise
social planning as an integral part of the industrial economy
has led to a European two-tier workforce with the UK viewed as
an easy option for closure and redundancy.
— Functional flexibility introduced
with full employee participation can lead to improved productivity
and greater competitiveness.
— Evidence illustrates that the UK
flexible labour market has failed to bring the real gains in productivity
and competitiveness promised.
— It is also apparent that the progression
towards full employment has masked the shifts in the labour market
reflected in the decline in manufacturing jobs
— Government should adopt a more positive
approach to employment regulation where this enhances the working
environment or conditions of UK workers and, in particular, should
ensure that all workers are protected under UK legislation.
— Negative impact of labour market
flexibility based on numeric factors rather than functional, will
undermine government strategy to create a high-skilled, added
value workforce in the UK.
INTRODUCTION
1. The Amicus Trade Union welcomes the opportunity
to contribute to this inquiry into UK Employment Regulation. As
the UK's largest general trade union covering both public and
private sector employment, Amicus is well placed to understand
the impact of legislative changes on both employers and employees.
2. In this submission to the Trade and Industry
Committee, Amicus will address the issue of the flexible labour
market and the investment implications that this has for the UK
economy. We shall also draw attention to comparative figures for
other major European Union countries.
3. Amicus is concerned about the need to
establish a level playing field for UK workers in their treatment
both at the workplace and at times of employer restructuring and
potential job loss.
4. We shall look at the impact of regulation
on the quality of jobs and earnings within the UK and refer to
the strategic needs for tackling skill gaps and shortages.
FLEXIBILITY
5. In recognising that the concept of flexibility
can provide opportunities for improved productivity and more effective
working, it is important to define what is meant by flexibility.
Too often flexibility is a pseudonym for the freedom to hire and
fire at will, to avoid regulations introduced to protect workers
such as the working time directive and to restrict the ability
of trade unions to organise in the workplace.
6. Current flexibility is controlled by
the employer rather than employee. Employee rights when introduced
are welcome but frequently do not go far enough to allow individuals
to take advantage of those rights for economic reasons. Employers
cry wolf at each new right, eg family friendly developments, whilst
failing to produce any evidence of impact on productivity or effectiveness
or competitiveness.
7. The failure of government to address
social planning as an integral part of the industrial economy
has meant that the employer's flexibility is greatly enhanced
to the cost of the employee. Redundancy protection in the UK is
minimal and frequently means that lip service is paid to the regulations
on consultation. As an increasing proportion of the workforce
move into employment in smaller establishments, even the proposed
new regulations on Information and Consultation will do little
to protect the position of millions of UK workers as it does not
apply to them immediately, or in cases of less than 50 employees,
ever.
8. The penalties against employers who abuse
the existing employment rights of workers are minimal and do not
act as a deterrent. For many workers the extension of the flexible
labour market means greater job insecurity and unacceptable workplace
practices.
9. Amicus is not opposed to the concept
of functional flexibility in the workplace where this is introduced
through consultation and the full participation of the workforce.
We have been instrumental in working with employers to achieve
team working and multi skilling which has both enhanced the individuals'
skill levels and resulted in improved productivity and greater
competitiveness. However, too often the concept of flexibility
from an employers' perspective is about numeric flexibility which
is about greater use of temporary and agency labour and knee-jerk
reactions to dips in demand for products.
FLEXIBLE WORKING
10. Flexible working for employees provides
an opening up of the employment market to many who would otherwise
not be able to work and Amicus welcomes recent improvements in
legislation in this area. This widening of the labour pool has
the potential to help address the skill needs of a number of industries.
Progressive employers have embraced these provisions and in some
cases enhanced them in an effort to position themselves as employers
of choice. This would clearly not be done if they felt that this
would damage their competitive position.
11. Equally, we are concerned that without
adequate employment regulation, workers who choose to work part-time
or are employed by agencies, will be disadvantaged and leave themselves
open to unfair employment practices.
INVESTMENT
12. Much has been made of the benefits that
a flexible labour market brings in terms of attracting investment
into the UK (include comparisons with Germany and France over
last 10 years).
13. Although the numbers employed in the
UK now are higher than ever the quality of the jobs available
and the levels of earnings do little to support the government's
stated aim of achieving a high-skilled, added value workforce.
There is little evidence to support the contention that the flexibility
in the UK labour market has brought long term investment into
the country or that indigenous employers are prepared to increase
investment other than those in areas where there is a guaranteed,
quick return.
14. Our own research has shown that despite
statistics showing progress towards full employment this has hidden
the serious decline in manufacturing jobs over the past 15 years.
The shifts in the labour market in the UK towards the service
sectors has brought with it a diminishing supply of key skills
which impacts upon the attractiveness of the UK to inward investors.
EMPLOYMENT REGULATION
15. Conversely there is no real evidence
to suggest that employment regulation where it has been introduced
has a detrimental effect on investment and jobs. This is due,
in part, to the extent to which positive rights for workers are
integrated into UK employment legislation by the Government.
16. Amicus notes that many of the positive
developments in employee rights in the UK have originated from
European legislation and directives. Amicus would like to see
a more positive approach from the UK Government when such directives
are proposed and consulted upon. We welcome the earlier opportunity
for consultation which the DTI now provides to interested parties,
but are concerned that the outcomes to date have represented a
dilution of the intent of such directives. This is apparent in
the Working Time Regulations where the UK has continued to argue
for the retention of the opt out clause, and the Information and
Consultation Regulations where many employers will be excluded
from the requirements.
17. There is no evidence from those countries
where existing consultation rights meet the new regulation requirements
or where there is no opt out from the working time regulations
that investment has been undermined or productivity has suffered.
18. It is important that positive changes
that will create the right sort of working environment to encourage
the acceptance of change, so necessary to today's economic climate,
are introduced with enthusiasm by industry's partners if the UK
economy is to meet the aspirations of government in terms of productivity
and competitiveness.
A SKILLED WORKFORCE
19. There is a general recognition that
for the UK to compete in the global economy in manufacturing and
commercial services, it needs to create a balanced workforce with
the capability to adapt to change through training and re-skilling.
Such an approach needs the right sort of workplace and employment
environment.
20. If on the basis of the false premise
that the UK is over-regulated, government restricts the ability
of trade unions to organise or play a full role in business strategy
through consultation, it is unlikely to create the environment
where change is seen as an opportunity rather than a threat.
21. Amicus argues that the record of the
UK employers demonstrates that there is a need for the provision
of mandatory training levies where industries fail to demonstrate
that they are investing in the future through a strategic training
plan.
22. It is against this scenario that Amicus
argues that there is no question that the UK workforce can or
should seek to compete with low wage economies on the basis of
low wages and less regulation. Such an approach would be disastrous
and seriously damage the UK economy in the medium and long term.
A programme of sustained investment, innovation and high-skill,
added value workplaces is the sustainable approach for UK employment
and the proposal for a level playing field by expanding regulations
on a par with the rest of Europe, provides no real obstacle to
such a strategy, or to flexibility.
June 2004
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