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The social partners’ joint statement on the risk of a no-deal Brexit risk, launch of the first labour market enforcement strategy and a record low for workers’ strikes are the main topics of interest in this article. This country update reports on the latest developments in working life in the UK in the second quarter of 2018.
The UK government’s European Union (Withdrawal) Bill passed through Parliament on 20 June, followed by the Prime Minister promising a white paper on the proposed future relationship with the EU on 9 July.1 Expected proposals include the UK remaining indefinitely in a single market for goods (to avoid the need for checks at the Irish border) and restrictions on free movement of people (a stated red line for the EU).
In July, however, senior EU officials dismissed a draft of the proposals as unrealistic and unacceptable.2 And, at the EU summit on 29 June, the EU warned that ‘serious divergence’ between itself and the UK risks the possibility of a no-deal.3 The 27 EU leaders signed a joint statement pledging to prepare for the possibility of a no-deal, highlighting their concern at the lack of progress on the Irish border issue. This is in contrast with the apparent joint progress between the EU and UK in March.4
The Trades Union Congress (TUC) and Confederation of British Industry (CBI), together with their European counterparts, issued a rare joint statement on 27 June demanding more urgency in the Brexit talks. They requested that the withdrawal agreement and transitional arrangements be in place by October, warning that the consequences of lack of agreement between the EU and the UK would be dire for firms, workers and communities.5 In the same week, UK-based car manufacturers said that investment and thousands of jobs in the sector would be at risk unless the government rethinks its red lines in negotiations. But the CBI and TUC said their concern spread further: to 23 industrial sectors which would need ‘regulatory alignment’ post-Brexit.
The Director of Labour Market Enforcement, Sir David Metcalf, published his first full annual report in May to tackle the exploitation of low-paid workers. This sets out the priorities for three government enforcement bodies: the Employment Agency Standards Inspectorate (EAS), the Gangmasters and Labour Abuse Authority (GLAA) and the HMRC National Minimum Wage team.
Among the 37 recommendations were: greater penalties and enforcement for those failing to pay the national minimum wage; that Her Majesty’s Revenue and Customs (HMRC) adopts responsibility for enforcement of unpaid holiday pay; and either to enforce the Swedish derogation (an exception to the right to equal pay for agency workers) properly or abolish it. It rejected proposals for a single, joined-up labour inspectorate.
In recognition of the fact that while employment rights are now chiefly enforced individually, workers are often unaware of their rights, the report called for clearer and more accessible employment information for all.
Only 33,000 workers were involved in labour disputes in 2017, down from 154,000 a year earlier, according to figures from the Office for National Statistics (ONS). This is the lowest number since records began in 1893. While the previous record low came in 2015, when 81,000 workers went out on strike, there have only been four other occasions over the past 120 years when fewer than 100,000 employees went on strike. The number of working days lost to labour disputes in 2017 was 276,000, the sixth lowest annual total since records began in 1891.
The social partners’ joint statement shows rising concern that the UK may leave the EU without a deal in place; these fears are exacerbated by warnings from the recent EU summit. The passing of the EU (Withdrawal) Bill is also significant. The House of Lords had passed the Bill back to the Commons with an amendment that would have ensured the House of Commons would have the chance to block a ‘no deal’ Brexit. However, a potential backbench rebellion was headed off by last minute-concessions to Conservative rebels and the peers backed down, allowing the Bill to pass into law.
Trade unions have been critical of the LMES on two fronts. Firstly, that the proposed reforms to the existing enforcement system do not go far enough. Secondly, that despite acknowledging the importance of unions in enforcement, it does not make any recommendations that would strengthen unions or their ability to collectively bargain.
On this matter, the latest strike figures are likely to stoke renewed debate over the government crackdown on unionism,6 reflected in the punitive Trade Union Act, and at a time when workers are coming under increasing financial pressure. With average pay yet to recover to pre-crisis levels, workers are going through the worst period for wage growth since 1825.7
Many economists fear weak wage growth has been exacerbated by the waning power of unions, arguing that workers are less able to demand better pay and conditions despite record-low levels of unemployment.
1 BBC News (2018), Brexit: Bill approved after May sees off rebellion, 20 June.
2 The Guardian (2018), UK's latest Brexit proposal is unrealistic, say EU officials , 2 July.
3 The Independent, (2018), Brexit: ‘Serious divergence’ in talks threatens no deal, EU warns , 29 June.
4 Eurofound (2018), United Kingdom: Latest working life developments – Q1 2018 .
5 TUC (2018), Union and business leaders issue joint appeal for progress in Brexit negotiations , 27 June.
6 The Guardian (2016), Tories forced to rethink trade union crackdown after Lords defeat , 16 March.
7 The Guardian (2017), UK pay squeeze to last five more years, warns think-tank , 13 November.