Memorandum by Construction Confederation
1. The Construction Confederation is the
main trade association for building and civil engineering contractors
in the UK, representing over 5,000 contractors which deliver 75
per cent of total construction turnover.
2. The Confederation comprises: British
Woodworking Federation, Civil Engineering Contractors Association,
Major Contractors Group, National Contractors Federation, National
Federation of Builders, Scottish Building.
3. The Confederation welcomes the opportunity
to submit evidence to Sub-Committee G (Social Policy & Consumer
Affairs) of the House of Lords Select Committee on the European
Union in order to assist the Inquiry into the EU Commission Green
Paper "Modernising labour law to meet the challenges of the
21st century".
4. In submitting written evidence the Confederation
has sought to provide answers both to the questions as detailed
in the Call for Evidence and to a number of those featured in
the original European Commission Green Paper.
FLEXIBILITY OF
THE LABOUR
MARKET
5. How flexible is the labour market in the
UK? What could be the benefits of making it more flexible, and
how could this be achieved? In which ways, if any, could changes
in labour law help with this?
UK labour protection laws strike an effective
balance between flexibility and the protection of the individual.
The CC considers that should the European Commission pursue new
or additional European-wide labour law proposals, the priority
must be to maintain an overall EU framework of legislation that
allows national flexibility in transposition into national legislation.
EMPLOYMENT SECURITY
6. What is the extent of employment security in
the UK? What could be the benefits of changing the present arrangements
for employment security? In which ways, if any, could changes
in labour law help with this?
Existing UK legislation and regulations provide
adequate social protection. The last decade has seen a significant
increase in employment protection and "family friendly"
entitlements, with a marked increase in the range of social protection
in such areas as national minimum wage, discrimination, parenting,
and business transfers. All of which place additional burdens
upon the employer. Security of employment cannot be facilitated
by law or collective agreement and is ultimately dependent upon
prevailing economic factors in a competitive marketplace.
THE CONCEPT
OF "FLEXICURITY"
7. How helpful do you think is the Commission's
concept of "flexicurity" seeking to combine the ideals
of a flexible labour market with those of employment security?
How practical could it be to strike a balance between these two
ideals and where should such a balance be struck? In which ways,
if any, could changes in labour law help with this?
The CC believes that current EU and UK employment
legislation strikes the correct balance. There is a danger that
the imposition of further employment protection legislation may
have a detrimental impact upon employment security with employers
seeking new ways to maintain workforce flexibility. For example,
taking work outside the European Union, where call-centres are
an example.
8. The Commission's concept of "flexicurity"
is idealistic and likely to create "unintended" effects.
Even at the current conceptual stage of potential labour law review,
the Commission appears to be taking a one-size-fits-all approach.
Given differing traditions and employment cultures across the
Member States, the Confederation does not believe it to be practicable
to impose an EU-wide definition.
GROUPS COVERED
BY LABOUR
LAW
9. To which categories of workers should labour
law apply? What is your view of the issues raised by the Green
Paper about the applicability of labour law to groups of workers
whose employment status is intermediate between that of employee
and self-employed?
Labour laws should apply where a clear "master
and servant" relationship exists. Consistency of approach
between Government agencies would assist in removing ambiguities
in this area. Increasing the burden and complexity of labour law
is likely to promote the incidence of ill-defined relationships.
ROLE OF
EU REGULATION
10. What is the role of regulation at the
EU-level in achieving a modernised system of labour law? Are there
any specific pieces of EU legislation that need either to be repealed
or to be introduced? Do you consider that the Green Paper's proposed
"Floor of Rights" for all workers is a viable one? In
order to promote worker mobility, would a Community-wide definition
of "worker" be useful?
The role of EU regulation must be to maintain
an overall framework of employment legislation that allows national
flexibility where appropriate. The floor of rights currently operating
in the UK is that which is laid down in EU legislation and is
satisfactory in dealing with working conditions.
11. If the intention of this "Floor
of Rights" is to create a legal framework wherein an employer
must, for example, provide paid holiday entitlement to a self-employed
person providing services then this would have an adverse impact.
Models that may suit one member state in respect of such issues
may not be suitable for transport into EU wide legislation. These
are issues that are best dealt with at national level.
12. How could minimum requirements concerning
the organization of working time be modified in order to provide
greater flexibility for both employers and employees, while ensuring
a high standard of protection of workers' health and safety? What
aspects of the organization of working time should be tackled
as a matter of priority by the Community?
This matter is currently being addressed through
the proposed update of the Working Time Directive which seeks
to provide flexibility for both employers and employees whilst
ensuring a high standard of protection of workers health and safety.
The Confederation is keen to maintain the opt-out facility to
the 48-hour average working week.
13. Do you think it is necessary to reinforce
administrative co-operation between the relevant authorities to
boost their effectiveness in enforcing Community labour law? Do
you see a role for social partners in such cooperation?
Administrative co-operation between relevant
authorities is important to ensure effectiveness in enforcing
community law. Social dialogue in each member state differs and
therefore any role for social partners must be dealt with at national
level.
14. Do you consider that further initiatives
are needed at an EU level to support action by the Member States
to combat undeclared work?
Undeclared labour practices are not only illegal
but have serious social, economic, health and safety, and reputational
consequences for the construction sector. National government
has the key role to play in ensuring measures and adequate resources
are in place to combat undeclared labour. It is a matter for Member
States themselves collectively to decide whether or not further
initiatives may be required at the EU level. Should this be the
case, it would seem prudent for the national government to consult
with and seek input from the national social partners in the construction
sector. The Confederation believes that a reduction in VAT on
domestic repairs and maintenance work would make a significant
contribution to tackling undeclared work and the "black economy".
This is an area where cash payments are notorious and the imposition
of VAT creates a significant opportunity for those working informally
to undercut the legitimate businesses.
CONCLUSION
15. The more complex the regulations then
the greater the burden of understanding placed upon all parties.
Both the EU and national governments need to ensure an acceptable
balance in this area. No "one-size will fit all" concerning
EU employment legislation. The concept of "flexicurity"
is admirable, but as previously stated likely to create unintended
detrimental effects.
16 April 2007
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