Why Labour's Employment Rights bill could have a chilling impact: Catherine Wilson
As a child growing up in the 1970s I had a pretty clear idea of what employers were like.
Parents employed in a benign public sector and surrounded by the titans of the labour movement, it was pretty clear to me that employers were generally the exploiters and employees the downtrodden in need of protection.
Thirty years of working as an employment lawyer however have altered my opinion. Yes businesses need to make money to survive but most try to create a functioning working environment.
An unhappy employee is generally not a particularly productive employee. They are after all employed under contracts of employment not slavery and there are often greener pastures around the corner. This revelation based on experience however does not appear to have occurred to the current Labour government. Their perception of employers seems rooted in the 1970s model and nowhere is this seen more clearly than the Employment Rights bill slowly proceeding through parliament.
Pre-election the consensus was that this wide-ranging series of reforms would be watered down, if and when, Labour were victorious. The reality has been somewhat different. The huge scope of these reforms has in fact been increased as the bill as proceeded though parliament. Some level of regulation is essential. Over regulation will drive out private sector jobs in this country. Aside from the up to £5 billion annual additional costs associated with implementation, there are a large number of specific changes which will have a chilling impact. Three spring to mind. The first is the suggestion that employment protection will become a day one right. There is some talk about an, as yet unspecified, “light touch” regulatory system which may apply during an initial, again unspecified, period.
The existence of a qualifying period allows employers to take a chance on those hard to place employees particularly the long term sick, the young and the returners. If there is no qualifying period then the risk of an employee who does not work out may be too much for employers and encourage relocation abroad, outsourcing, automation and the loss of work opportunities.
The second is that the bill will make it more difficult to change terms and conditions. These have been narrowed to “restricted variations” however these can be wide ranging in practice. Many of our older local businesses still operate with fairly antiquated terms.
Paid shower breaks, for example, for factory workers clearly made sense when the majority of housing did not include private bathing facilities. It makes less sense nowadays yet the removal of shower breaks, change in working hours and loss of payment could fall within this prohibition. Businesses will not go bust as a result. They will be inhibited in creating a streamlined more efficient workplace. And finally the removal of non disclosure agreements in cases of discrimination and harassment. So called gagging clauses have been the subject to significant criticism in recent years. However employers are often prepared to enter into such agreements to secure a quick and confidential settlement without any acceptance of liability. Not all complainants wish to martyr themselves on the ME TOO altar and are happy to accept financial compensation and move on. This legislation removes this option which will necessarily mean a greater number of claims to our already creaking Employment Tribunal system. I could go on but I hopefully make my point. Any thing that discourages employers is a bad thing not just for our economy but crucially the people who work within it.
Catherine Wilson is a partner with Constantine Law. These opinions are her own.