NEWS & VIEWS

Labour’s plans for employers

Labour’s plans for employers

A fantasy world?

Phillip K Dick wrote a compelling novel, now serialized for TV, called ‘The Man in The High Castle’.  It dealt with a parallel universe where the Allies lost World War II leaving the world under Nazi control. Reading the Labour Party manifesto is rather like reading the book, not because it necessarily heralds a fascist regime, (though, according to some, perhaps a marxist one) but it does seem to belong to another world.  I select only a few of the proposals and consider the impact on mediation and arbitration of two of them. Generally, if Labour win, and do introduce these changes, I believe the use of both is likely to increase.

Time off

For lovers of more holidays and less work there are to be four new bank holidays on each of the patron saint’s days.   This choice is somewhat random.  It is unlikely to be signaling any religious fervour on the part of the Labour hierarchy. The impact is unlikely to have been considered very carefully. For example, in April 2020 there will be holidays on 10, 13 and 23rd followed shortly thereafter by a delayed May Day on 8th May. For the economy the loss of approximately 130,000,000 working days is no doubt considered a flea bite. Indeed, it is a flea bite compared with the other idea of reducing average working hours to 32 with no loss of pay. Effectively this is four day’s work for five day’s pay, to be funded by “productivity increases”. This optimistic idea is based on research relating to the improvement in well-being resulting from working less. In effect it is a huge gamble that UK GDP will make up the loss of between 1 and 1.5 billion workdays because of the resulting feel-good factor. Those for whom a 40-hour week seems like an unheard-of nirvana will use their own experience when considering whether this project is likely to succeed in improving the UK’s productivity.

Pay and Conditions

Labour plan to submit the entire economy to sectoral collective bargaining. All employing businesses are to be allocated to a ‘sector’ and required to fix minimum standards of pay and benefits to levels that are to be set by compulsory collective bargaining. The assumption is presumably that in some sectors the minimum wage for that sector may be greater than that set nationally as otherwise there seems little reason to have a minimum set by two processes. For those with long memories this is the re-introduction of Wages Councils. The idea is plainly designed to encourage increases in union membership but there is no detail published about who will represent the workers in the seventy-five percent of the workforce who have chosen not to belong to a union. The scope of the terms to be covered are very wide.  I was the solicitor to the Agricultural Wages Board for several years. In that body there were three panels, the Unions, the National Farmers Union representing employers, and a panel of independents. Regularly both employers and Unions voted as a block and it had to be the independents that decided disagreements.  Labour will not mandate a panel of independents, leaving that to each sector to choose whether to have one, but in the absence of that mechanism when there is a failure to agree is to be resolved by a compulsory arbitration. What will result here is a hugely cumbersome, time-consuming and inflexible annual pay-round structure that is likely to restrict the growth of much enterprise. There will be a proliferation of statutory instruments that, if current standards are maintained, will be incomprehensible to many. It will however provide more work for arbitrators familiar with workplace issues and collective bargaining to settle what are likely to be regular and repeated failures to agree.

Employment Rights

Everyone is to have full employment rights from their date of starting work. For example, at present a claim for unfair dismissal or a statutory redundancy payment can only be made after two years employment. In addition, the rights do not exist for those who are not employees. Labour plan to remove the current distinction between workers and employees and provide all rights to everyone except the genuinely self-employed. This will increase substantially the number of claims that are brought to employment tribunals, not only for unfair dismissal and redundancy but also the new rights that are to be created for flexible working, increased protection from harassment and increased protection from redundancy. Given the cost of dealing with such claims in a tribunal it is highly likely that more employers (and claimants) will be attracted to use mediation to resolve these disputes and employers are likely to be increasingly attracted to incorporating mediation into workplace procedures. For those who want to think more about this please see the Keynote here https://www.slevinson.com/wp-content/uploads/2019/11/Levinson-Key-Notes-How-to-Introduce-In-House-Mediation.pdf .

This is only a tiny part of huge changes the Labour Party seeks to impose on employers if it wins the election.  For those wanting to see more here is the link: https://labour.org.uk/manifesto/tackle-poverty-and-inequality/ .