Memorandum by the British Retail Consortium
1. The British Retail Consortium (BRC) represents
the whole range of retailers, from the large multiples and department
stores through to independents, selling a wide selection of products
through centre of town, out of town, rural and virtual stores.
Membership includes all major multiples; a range of small and
medium sized retailers plus various sector-specific and small
business trade associations.
2. The BRC has-responded to the European
Commission's Green Paper and is pleased to submit evidence to
the House of Lords European Sub-Committee. The Committee has requested
written submissions on the implications of the Commission's paper
on the UK labour market and UK employment practices. The BRC has
discussed these issues with HR professionals from its membership
and hopes the Committee finds our submissions helpful. We would
be delighted to assist the committee should any further information
be required.
3. The BRC is concerned at the Commission's
suggestion that contracts of employment which depart from the
five day 9am to 5pm week are, de facto, precarious and
in need of additional protection. In the retail sector part time
employment is a strong employee preference—64 per cent[70]
of the workforce has chosen to work on a part-time basis. The
suggestion that employers who facilitate flexible employment opportunities
avoid long-term commitment to their staff is erroneous, illogical
and not supported by evidence. The success of a sector like retail,
where the majority of employees work part-time, is dependent on
the take-up of these flexible employment contracts combined with
security to assist staff retention. Competition from other retailers
serves to ensure standards are high—both in terms of the
types of employment contract available and in the incorporation
of long-term commitment to an employee's personal growth potential.
Retail can demonstrate that success is dependent on finding solutions
which simultaneously meet the needs of the workforce and a demanding
customer base.
4. In the UK, the employment law framework
is already saturated and employers are forced to comply with an
increasing burden of administrative requirements. The BRC believes
that further legislation should only be imposed as a last resort
and only where other forms of soft regulation, for example codes
of practice and self regulation, are inappropriate. Given the
Commission's own commitment to reduce the burden of administration
contained in its Better Regulation strategy, new legislation should
be the exception rather than the norm. Furthermore, the EU should
resist temptation to harmonise employment administration across
member states. However, it does pave a key role to play in raising
employment standards by opening debate and facilitating an exchange
a of experience and practice.
Flexibility of the labour market
5. In the UK retailers have a history of
providing innovative, flexible working schemes and the success
of the UK retail industry is due, in part, to the types of working
patterns that employees are able to choose. As a result, even
though food retailers are increasing the number of stores that
are open twenty-four hours a day and non-food retailers are extending
their opening hours during the week, the majority of the 2.8 million
retail employees work less than 48 hours, a week, and can choose
working patterns to suit their specific needs. In the UK, retail
has consistently led the way in creating a flexible, supportive
environment by investing heavily in training and development,
recruiting and retaining a diverse workforce, creating jobs in
deprived communities, supporting further education and offering
excellent career opportunities for all employees regardless of
contract type. The BRC believes that the UK Retail Sector's success
in creating flexible, secure jobs is an example that should be
recognised across the EU.
6. In order for this debate to progress
constructively it is vital to ensure there is a common understanding
of "flexibility". For retail employees, flexibility
means providing opportunities to vary working patterns, to change
between working patterns and to choose to work around caring or
educational requirements. To retailers, workforces must be in
place to cope with seasonal demand and competition.
7. Retailers have developed policies to
ensure that flexibility exists and this is demonstrated by the
fact that 64 per cent of the workforce work part time. As different
forms of work and working patterns emerge employers must be in
a position to provide responsive employment opportunities. Entrenching
any sort of "flexibility" in a rigid legal instrument
will impede modernisation and the evolution of new forms of working.
Employers should instead be encouraged to recognise emerging habits.
Commercial competition and new forms of technology will in any
case create new forms of work and competition for staff will ensure
employers provide responsive employment solutions. This works
as an extremely effective form of self-regulation—raising
the bar for flexible and innovative opportunities.
Employment security
8. The Commission's debate must also start
with a commmon understanding of the term security. Security means
demonstrating long-term commitment to employees, rewarding their
hard work and loyalty, ensuring they are informed and consulted
in relation to changes in the workplace and encouraging them to
develop their careers by providing training and supporting further
education. The benefit to both sides of industry is clear; the
employee is secure in their employment and has the opportunity
to expand their skills base should they wish. By providing employment
Security the employer will retain a dedicated, skilled workforce
able to perform well, provide efficient customer service and ultimately
increase value to the corporation. Again, the BRC's members feel
that along with the basic protection afforded to employees in
UK law, commercial competition serves to ensure employers offer
a range of benefits to enhance employment security.
The concept of "Flexicurity"
9. The Commission's buzzword is of limited
use conceptually but has succeeded in engaging debate on employment
models in the EU. The definition in Scandinavia, where this model
stems, is based on the availability of significant social protection.
The accessibility of flexible employment there is bolstered by
the State. In other countries in the EU where this level of protection
is not available the requirement to provide longer term security
becomes more focused on the employer. In the UK our social protection
adequately supports the unemployed who are also encouraged to
gain employment through a range of government initiatives. However,
our high unemployment rate coupled with our robust legal framework
as well as the competitive nature of industries like retail requires
employers to make long term commitments to their staff. Because
many staff are on flexible employment contracts but receive the
same employment security as their full time counterparts, the
retail sector is a very useful exemplar of how flexibility and
security can come together in an ecoromic environment which differs
from the framework in which the model was originally developed.
10. While flexibility and security are indeed
key aspects of sustainable employment, the BRC believes it inappropriate
to impose any one model on the whole of the EU and.the operation
of concepts such as flexibility and security will depend on the
adequacy of social protection in each country. In addition, each
member state has a different economy and a different legislative
and regulatory framework. Each responds differently to regulation
and in each the composition within employment types differs—those
who make up the majority of the part time workforce, the night
workforce etc. How the concepts of flexibility and security operate
and how they are enforce will be an individual matter for member
states. However, as a short-hand for engaging debate on flexible,
secure employment it is a useful start point.
Other labour market challenges and groups covered
by labour law (questions 4 and 5)
11. The BRC believes that combined, flexibility
and employment security can produce optimum conditions for employment
and that additional, burdensome regulation purporting to facilitate
their operation serves only to hamper them. However well-intentioned
additional regulation is, the UK employment legislative framework
is already saturated and new regulation is likely to result in
knock-on effects as employers spend time and money satisfying
bureaucratic require regulatory framework on SMEs is of course
even greater. The BRC believes that it is counter-intuitive to
implement more regulation in the name of achieving modernisation.
The dynamic nature of the labour market means it requires flexible,
adaptable solutions which entrenched burdensome regulation simply
cannot achieve.
12. Retailers have demonstrated their ability
to adapt to the needs of the labour market and ensure that their
solutions are original and competitive. In the UK retailers invest
heavily in training and many have launched innovative schemes,
providing their staff with access to professional or personal
development plans. Low-skilled workers in particular benefit greatly
from the opportunity to access training and enhance their skills
base. Many retailers offer skills and development packages as
standard to all employees regardless of length of service and
go to great lengths to ensure there are a variety of original
and accessible options available[71].
In terms of flexibility, again, employers respond to the requirements
of their customers and their employees by providing flexible employment
opportunities which meet the needs of both groups. Often those
requiring flexible working patterns are those underrepresented
in the labour market generally—for example women, the disabled
and older workers. The fact that the UK retail workforce comprises
62 per cent women, 56 per cent older workers, 12 per cent disabled
workers and 7 per cent workers from ethnic minorities[72]
is testament to the fact that these practices have elimintated
marginalisation within the retail workforce. Ensuring that employers
are poised to adapt to facilitate this trend. The BRC believes
that a wealth of administrative requirements imposed by regulation
will only hinder employers' ability to respond quickly and positively
to the changing needs of modern workforce.
13. The definitions of employment and self
employment and the issue of disguised self-employment, and how
to facilitate bona fide transition between the two are distinct
matters. The BRC agrees with the Commission that the most constructive
direction in which to take the matter of definitions is by opening
up an EU-wide discussion in which member states share the rationales
behind their definitions, consider when to protect freedom of
contract and allow parties to exclude employment protection and
examine how and why harm is caused. Regulation often presupposes
that there are clear distinctions between contractual types that
do not exist in practice and in any case, however tight the definition
there will always be controversy at the margins. In the UK the
statutory definition of "employment" requires reference
to a common law test which looks at an indeterminate list of factors,
including the degree of control exercised by the employee, the
extent to which the employee is integrated with the employer's
organisation and the allocation of risk.
14. The European Court of Justice has held
that the precise scope of the term "employment relationship",
used in many European Directives, is a matter for national law
and this is in line with the wording of the Directives themselves
which often include the statement "This Directive shall be
without prejudice to national law as regards the definition of
contract of employment or employment relationship[73]".
The English Courts have demonstrated their commitment to ensuring
that the existence of a contract and its provisions is a true
reflection of the actual relationship between the parties and
have found an employment relationship where contracts and tax
codes expressly identify the claimant as self-employed[74].
The BRC also agrees that there is a real need to protect workers
who are forced into involuntary self-employment in order to exempt
them from benefits and security which they would otherwise attract,
and believes that initiating a debate as an opportunity to learn
from experiences across the EU would be invaluable.
15. Pinpointing responsibility in multiple
employment relationships in the UK is a matter for the courts
assessed by reference to a range of factors. The end-user has
frequently been held responsible for compliance with employment
rights and while the BRC believes that has resulted in harsh consequences
it also believes that requiring prescriptive contractual forms,
and/or imposing liability as standard (eg subsidiary liability
in the case of sub contractors) will not resolve this difficulty.
The specific circumstances will indicate where the responsibilities
lie and this is the case notwithstanding the purported contractual
relationships and, again, the UK courts have demonstrated willing
to look beyond the contract. While it is right that not too great
a focus is given to formalities, neither should they be completely
disregarded. Stripping away formalities in analysing the relationship
will create uncertainty between all parties which is ultimately
in the interests of no one.
16. The BRC believes that the employment
status of short term temporary agency workers could be clarified
to ease the burden on employers and employment agencies. The DTI
is currently looking at ways in which to ease the requirements
relating to the provision of information for short assignments
and the BRC welcomes this proposal. Aside from this, and in relation
to longer-term assignments, the BRC fully supports the principle
of protecting agency workers from discrimination but believes
that this must be balanced so as to preserve the use of agency
workers and retain business flexibility.
ROLE OF
EU REGULATION
17. The use of the term "worker"
within European legislation provides a basic minimum set of employment
rights. Workers are covered by all Minimum Wage and Health and
Safety legislation including Working Time legislation and are
also protected by the Employment Relations Act 1999 and provisions
in the Employment Rights Act 1996. Statutory protection has also
been extended in a variety of situations to new starters without
a qualifying period[75].
The BRC believes that the current minimum protection strikes the
right balance between protecting freedom of contract and ensuring
employee welfare. This debate focuses on the need for Labour Law
to be appropriate or the 21st Century and able to adapt to emerging
new forms of work, which it recognises as becoming increasingly
mainstream. The BRC believes that restricting the available forms
of contract further would serve to hamper job creation and stifle
entrepreneurship.
18. The ECJ and many European Directives
refer the definitions of employment contract and worker to national
law and the BRC agrees with this approach. Aside from the fact
that, as discussed, a base "floor of rights" exists
across the EU to protect the welfare of workers any further definitions
must be appropriate for the each member state. On a practical
Ievel, the BRC also believes that any attempt to converge the
definition would be extremely difficult and unlikely to succeed.
19. The BRC hopes the Committee finds this
paper useful and attaches its employment brochure which provides
examples of the type of employment opportunities offered by the
retail sector. We would be very happy to provide oral evidence
as part of the enquiry should the Committee find that useful.
30 March 2007
70 Nomis data February 2007. Back
71
For further info and examples please see BRC Brochure which accompanies
this paper. Back
72
Nomis data February 2007. Back
73
EG Acquired Rights Directive 77/187, Article 2.2. Back
74
See for example, Lane v Shire Roofing Company (Oxford) Ltd (1995)
IRLR 493 (CA). Back
75
For example unfair dismissal for discrimination or reasons relating
to working time and minimum pay. Back
| 
