Memorandum by the Chartered Institute
of Personnel and Development (CIPD)
With 127,000 members, the Chartered Institute
of Personnel and Development (CIPD) is the largest body in Europe
responsible for the management and development of people. Our
response to the Green Paper is based not on theory or ideology
but on the practical experience of our members and the evidence
about employment conditions in the United Kingdom and other member
countries. Our approach to issues of public policy is to ask "What
works?" in the context of improving employee well-being and
productivity.
As a professional body, our views are distinct
from those of the UK Government, employer bodies and trade unions.
Our research shows that the way in which people are managed is
a key driver of business performance.
We would make three general points which underpin
our comments on specific questions:
(a) organisations need to be able to respond
flexibly to changing circumstances in order to remain competitive;
(b) flexible working is attractive to many
UK workers, for whom it represents a positive choice, while for
others it represents a "bridge" into permanent employment.
(c) our survey evidence shows that those
on flexible contracts tend to be more emotionally engaged in,
and more satisfied with, their work.
This underlines that flexibility and employment
security are best seen as mutually reinforcing rather than as
alternative choices.
We set out below our answers to the questions
posed by the Sub-Committee. Our response to the European Commission
is relevant and is attached for information.
FLEXIBILITY OF
THE LABOUR
MARKET
1. The UK labour market displays considerable
flexibility in comparison with other EU member states. Comments
by CIPD members confirm that companies find it easier to shut
down operations in the UK than in other EU countries, but equally
the UK appears to continue to be an attractive destination for
investment. Greater flexibility could be achieved if more employers
seek to create a workplace culture based on teamwork, employee
engagement and flexible working. According to WERS 2004, the number
of organisations offering flexible working options to employees
increased significantly between 1998 and 2004. Simplification
of labour law would be welcome but changes that might realistically
be contemplated seem likely to help only at the margin in achieving
greater flexibility.
EMPLOYMENT SECURITY
2. CIPD surveys have consistently shown
that the great majority of UK employees do not feel insecure,
or worry that if they were to lose their job they would be unable
to find another job at similar pay without having to move house.
WERS 2004 found that the percentage of employees who feel that
their job is secure went up from 13 per cent to 19 per cent between
1998 and 2004, while the percentage feeling insecure fell from
19 per cent to 15 per cent. Employment law cannot in any event
provide a guarantee of job security, and changing employment law
with this intention would be more likely to threaten than to support
high levels of employment.
THE CONCEPT
OF "FLEXICURITY"
3. The idea that employment flexibility
and security are not mutually inconsistent but compatible—and
can indeed be mutually reinforcing—is one that CIPD supports.
However the meaning of the word is contentious and it must be
doubtful how far it is helpful to seek to use it as a framework
for political initiatives across the EU. Some elements in the
Commission's flexicurity agenda, particularly the emphasis on
active labour market policies, are welcome. But the idea of a
common floor of employment rights across member states seems to
be only loosely related to the main theme of employment security
and would be highly damaging to both flexibility and security
(see the CIPD response to the Commission on the Green Paper).
OTHER LABOUR
MARKET CHALLENGES
4. CIPD survey evidence has consistently
shown that employees in the UK have generally positive attitudes
in relation to job satisfaction and the state of the employment
relationship. This evidence is reinforced by the recently published
report on the fourth working conditions survey by the European
Foundation for the Improvement of Living and Working Conditions,
which finds that the UK comes third from the top of the list of
27 countries in respect of work satisfaction, and top in relation
to the impact of work on employees' health. In terms of working
time, the UK is close to the EU27 average recorded by the European
Foundation, and average working hours in the UK have actually
fallen by an hour in the last year. It is misleading to use the
term "subordinate" employment to denote the status of
workers who are not in permanent or full-time employment, since
many prefer temporary or self-employed status for financial or
other reasons. Professor David Guest has shown that temporary
workers generally have more positive attitudes to their job than
permanent employees.
GROUPS COVERED
BY LABOUR
LAW
5. Employment status imposes rights and
duties on both employer and employee, including—in the UK—terms
such as that of mutual trust and confidence which have been implied
by the courts. It would clearly be inappropriate to extend all
such rights and duties to "workers" who do not have
an employment contract. Occupational pension rights, and statutory
protection against redundancy and unfair dismissal, could not
simply be extended across the board to workers who are not employed.
CIPD agrees with the Government's conclusion (in "Success
at Work" published in March 2006) that there is currently
no need for further legislation in this area.
ROLE OF
EU REGULATION
6. For the reasons given in our response
to the European Commission, CIPD would be wholly resistant to
any proposal to apply common floor of employment standards across
EU members countries. There is no reason to believe that a Community-wide
definition of "worker"—assuming one could be achieved—would
be useful in improving worker mobility. CIPD sees no case for
the introduction of further employment legislation at EU level:
the UK Government has shown that, where circumstances make it
appropriate, it is capable of acting to protect vulnerable groups
(as with the recent legislation on gangmasters).
March 2007
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