United Kingdom: Latest working life developments Q3 2018

The positions of social partners on the Brexit negotiations, the new gender pay gap reporting system and strikes over pay 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 third quarter of 2018.

Social partners state positions on Brexit negotiations

Prime Minister Theresa May was forced to defend her so-called ‘Chequers plan’, following its rejection by EU leaders at the summit in Salzburg on 20 September.[1] The Chequers plan proposes the maintenance of a ‘common rulebook for all goods’ with the EU, in order to avoid friction at the UK-EU border, including Northern Ireland. It also plans to introduce a ‘combined customs territory’ on the borders between the UK and the EU, and to abolish the free movement of people.

Prior to the Salzburg summit, the General Secretary of the Trades Union Congress (TUC) Frances O'Grady had outlined the TUC’s position on the plan during her speech to this year’s congress. She said that if the government fails to secure a Brexit deal that delivers on jobs and workers’ rights, the TUC will fully support a campaign for a popular vote on the terms of the final agreement.

The Confederation of British Industry (CBI) has been vocal in highlighting the disruption that a ‘no-deal Brexit’ would cause. In August, it published a report that predicts reductions in competitiveness, prosperity and soft power in the event of such an outcome. The CBI has called on negotiators to secure a transitional agreement and responded to the Salzburg summit by calling on both sides to change their approach in order to end the stalemate. In a statement, it called for ‘constructive dialogue, with pragmatism coming before politics’.

Parliament recommends extension of gender pay gap reporting requirements

A report on the new gender pay gap reporting system, published by the House of Commons Business, Energy and Industrial Strategy Committee on 17 September, advocated more ambitious and effective action from the government and employers. The UK’s median gender pay gap is around 18% (in favour of men) – one of the highest in Europe – with gaps in some sectors as high as 40%.

As of spring this year, organisations in the UK with 250 or more employees are obliged to publish annual figures relating to their gender pay gap.
However, the report highlighted that this will only cover around half of the UK workforce and that evidence suggests smaller businesses have higher gender pay gaps. The committee therefore called on the government to extend this obligation to employers with 50 or more employees.
It also proposed that the reporting requirements include an explanation for the pay gap and an action plan to address it. The committee’s suggestion received support from the TUC, but the CBI stated that businesses should have the option to provide additional explanations and/or figures.

The committee also calls on the government to make changes to the reporting requirements which currently allow some professional service providers to exclude their highest earners (partners) from their statistics. Furthermore, it criticised the government for failing to clarify the legal sanctions available to the Equality and Human Rights Commission (EHRC) to deal with non-compliance. It proposed that the government outline specific fines for non-compliance, while the TUC demanded the EHRC be given direct powers to issue fines. In contrast, the CBI called for greater education rather than punitive sanctions.

Workers stage walkouts over pay

On 4 October, workers from Uber Eats, JD Wetherspoon, McDonald’s and TGI Fridays staged walkouts across several UK cities as part of disputes over pay.[2] A rally also took place in London, addressed by TUC General Secretary O'Grady and Shadow Chancellor John McDonnell. In addition, around 50 Uber Eats couriers, Uber drivers and supporters temporarily occupied the lobby of Uber's London headquarters. Their protest was supported by the Independent Workers Union of Great Britain and the Industrial Workers of the World union.

Commentary

The Brexit negotiations continue to cause high levels of uncertainty, particularly after Brexit Secretary Dominic Raab stated that the government was stepping up preparations for a no-deal Brexit following the Salzburg summit.[3] The CBI and TUC strongly oppose such an outcome and have called for a withdrawal agreement that includes appropriate transitional arrangements. In its report on a no-deal Brexit, the CBI provided data on the negative impacts on foreign direct investment in the UK since the vote to leave the EU. In addition, the CBI’s most recent industrial trends survey revealed that economic output slowed in the third quarter, with company export orders at their lowest level since October 2017.[4]

The TUC’s call for a popular vote on the terms of a final Brexit deal builds on a recent poll of members of its three largest affiliates, which found overwhelming support for a vote.[5] A number of trade unions, including Unite and the GMB, have also openly endorsed this. A poll of more than 2,700 members of Unite, GMB and UNISON, carried out by YouGov for the People’s Vote campaign, found two-thirds supported a second referendum.

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