Government publishes employment relations strategy paper

In March 2006, the Department of Trade and Industry published a policy paper outlining its plans for the current parliament in the area of employment relations. This paper proposes a limited extension of legal entitlements for employees, as part of its emphasis on improving the position of vulnerable workers; it also proposes measures aimed at simplifying the current regulation, making compliance easier for employers.

On 30 March 2006, the Department of Trade and Industry (DTI) published a strategy paper, entitled Success at work: Protecting vulnerable workers, supporting good employers (547Kb pdf). This paper sets out the current government’s employment relations policy for the current parliament and includes key themes such as introducing new measures to protect vulnerable workers, ‘cracking down on rogue employers’, and ‘lightening the load for legitimate business’.

Speaking at the launch of the document, Trade and Industry Secretary, Alan Johnson, said that the government’s approach of combining social justice and economic efficiency had shown that fairness and decent minimum standards were not barriers to jobs and growth.

Mr Johnson declared: ‘The new rights we have introduced are taking root – from the national minimum wage to the right to four weeks’ annual leave. This means we can now concentrate our enforcement on the minority of bad businesses that take advantage of the most vulnerable workers, further protecting such workers and benefiting legitimate companies.’ He added that the government was ‘honouring its manifesto commitments and giving business certainty over our future plans’.

Key points of strategy paper

Planned measures aimed at helping the most vulnerable workers include:

  • making paid leave for bank holidays additional to annual holiday entitlements, ending a minority practice that generally affects only the lowest paid workers (UK0504110F);
  • introducing a new pilot scheme that provides a comprehensive approach to identifying and helping vulnerable workers, as well as cracking down on employers operating illegally;
  • pursuing targeted enforcement strategies against ‘rogue employers’. The current national minimum wage enforcement pilot scheme in the hairdressing sector will be extended to other sectors (UK0510104N), and employment agencies that exploit vulnerable workers will be targeted;
  • ensuring that employees are more aware of their employment rights.

Mr Johnson said this new focus would also be good for business, as the tightening and streamlining of enforcement in this area would not affect the majority of honest businesses; rather, it would allow them to benefit from action taken to expose so-called ‘rogue’ employers who use illegal means to undercut legitimate businesses.

The strategy paper also sets out a number of measures aimed at helping business, including:

  • identifying ways to simplify employment law by reviewing, among other areas, discrimination law, redundancy payments and dispute resolution procedures (UK0408102F);
  • working with employers and human resources (HR) professionals to consider an ‘employment standard’ to reduce compliance burdens on small business. Any standard would be voluntary and subject to a genuine business need;
  • considering tougher action on employers who use illegal migrant labour.

Mr Johnson had previously used the occasion of the annual Warwick-Acas Lowry lecture, held on 21 March at Warwick Business School, to preview the key points of the government’s strategy paper. In his lecture, entitled The world of work (82Kb), he outlined the government’s key priorities and argued that addressing these measures called for a change in the role of employment legislation.

Reaction of social partners

Responding to the publication of the strategy paper, General Secretary of the Trades Union Congress (TUC), Brendan Barber, welcomed the government’s ‘firm pledges to press ahead with Labour manifesto commitments, such as ending the loophole that allows UK employers to include bank holidays as part of Europe’s minimum paid holiday entitlement’; he also praised its recognition that a significant minority of the UK workforce faces genuine exploitation at work. Mr Barber added that his organisation looked forward ‘to working with government to end abuse and, no doubt, resisting employer attempts to pull its teeth’.

Deputy Director General of the Confederation of British Industry (CBI), John Cridland, commented: ‘The commitment to reduce the red-tape burden from existing employment rights is good news for companies, their staff and the economy as a whole. But, as ever, business will judge the government on what it actually delivers.’ Both the CBI and the manufacturers’ organisation, EEF, were particularly critical of the government’s intention – as highlighted in its strategy paper – to embark, with the social partners, on an examination of the case for including pensions among the issues for collective bargaining, under the statutory trade union recognition procedure (UK0507102N). The CBI emphasised that trade unions must not be given a veto on pensions decisions.

Mark Hall, Industrial Relations Research Unit, University of Warwick

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