21 March 2013

By Roger Jeary

Roger Jeary reports on the IER's latest conference - Workplace issues: learning from the frontline.

A diverse and lively audience gathered for the Institute’s latest seminar at the home of Unite in Holborn chaired by Adrian Weir, Unite’s Assistant Chief of Staff. This timely and practical seminar addressed the realities faced by workers on a daily basis, and ironically coincided with the Chancellor’s Budget speech which, as anticipated, did nothing to make life on the front line any easier for workers, handing out bonuses for employers instead.

The Institute’s President, Keith Ewing, kicked off the event by examining workplaces in the age of austerity and the impact the cuts have, and will have, on workers in both the public and private sectors. He described Beecroft’s report on employment law from 2011 as a manifesto for a Tory government, aimed at limiting or abolishing unfair dismissal rights for workers by extending the qualifying period for unfair dismissal and switching the burden of proof to applicants. Also in Beecroft's report was his famous enhanced financial payment known as “compensated no fault dismissal” – a monetary settlement provided to workers who had been sacked without good reason. All of Beecroft's ideas give a sense of what a Tory government would do if it could.

Keith Ewing

Prof Ewing pointed to the formal government document published at the same time by the DBIS entitled Flexible, Effective and Fair. This document, he reminded us, glorified a light touch approach to employment regulation as a key driver for success in the UK economy and argued the government's policies were underpinned by a vision of a labour market where employers and employees were informed and empowered and there was minimal intervention from the state. Businesses at the time were reported to have told the government they felt they had no rights.

Ewing also highlighted the reality that followed the publication of the Charter of Employer Rights in 2011. It has proceeded to introduce changes which make it easier to hire and fire employees, thus enhancing the power of employers over employees. All of this was achieved not by changes to the substance of the law, but the procedures by which the law is enforced. As Prof Ewing put it - "if you cannot enforce rights then the rights are worthless".

He listed the changes, referring in detail to pre-tribunal processes, the introduction of tribunal fees, reductions in worker compensation and other tribunal procedural changes, all of which are detailed and carefully analysed in the IER's latest publication Justice Deferred. Perhaps most importantly, he posed the question as to how we should respond to this situation. What would Labour do if in power? Will the mistakes of the Blair/Brown government be repeated and none of the changes rolled back? Currently the silence is deafening. He suggested that what we want Labour to do is learn from past mistakes; assert that regulation is a good thing but it needs to be decent. The party should look back at statement from the pre-war government - a Tory one at that - that said the value of voluntary bargaining system cannot be over-estimated and was one of the most important instruments of economic growth. Prof Ewing concluded by suggesting that the duty of government was to foster and establish coverage of collective bargaining across all sectors and arguing that the Ministry of Labour should be reinstituted to represent the UK's 30 million workers in parliament.

Rakesh Patel

Rakesh Patel from Thompsons Solicitors then addressed the changes to the redundancy process on consultation and selection. Against the current austerity background the changes proposed were described as particularly pernicious. Mr Patel reminded the session of the intent of the original Directive – to avoid dismissals, reduce the number and mitigate the consequences. The changes will also address the issue of defining an establishment (not currently in legislation), as case law to date has provided various definitions.

In referring to the government’s proposals, Rakesh discussed the halving of the consultation period from 90 to 45 days where 100 or more employees are affected; the exclusion of fixed-term employees from these consultations and the defining of an establishment. For instance, in the case of Woolworths, a court found that each branch of the chain was an establishment in and of itself, and therefore consultation laws should be applied according to the number of employees working in each branch, not in the entire chain itself.

He argued that the real impact of halving consultations periods will be to give employers the ability to alter terms and conditions of employees more easily. However, he also reminded us that employers still have a duty to consult and any process of slotting-in has to be the subject of consultation. Likewise, 45 days is only the minimum period for consultation, the consultation has to be meaningful and fixed-term employees - although excluded from the overall count - still have to be treated fairly.

Victoria Phillips

Victoria Phillips, also from Thompsons, then presented an overview of the law relating to changing terms and conditions. She began by reminding us that it was not all doom and gloom. The trade unions had played a great role in the development of rights that workers still have in the workplace – paid holidays, maternity rights and challenges to discrimination in all its forms – all achieved through collective bargaining and more latterly enshrined in legislation.

She went on to explain the existing law on contract changes, referring to the statement of particulars; the types of term and the methods of variation. The focus on variation then turned to variation by agreement – express or implied. She warned that employees occasionally seek to argue that agreement was under duress, but these claims were very difficult to prove and rarely successful in the courts. Conversely, on non-contractual provisions the courts have been more helpful, particularly with redundancy agreements being accepted as contractual rights.

No discussion about contract changes is complete in today's climate without reference to bankers’ bonuses, with such terms frequently preceded by the word "discretionary". The courts frequently consider these as contractual, even if not expressly made so in the contract, particularly when read in the context of the method of application, which has made it an implied term. However, she warned that this leniency does not extend to lower-paid workers.

Victoria went on to warn about flexibility clauses, which do not allow an employer to operate in a high-handed or frivolous manner. Courts take the view that the right to vary has to be clear and unambiguous and not used to produce an unreasonable outcome.

On the issue of unilateral variation, increasingly common in the current environment, Victoria posed the rhetorical question “What do you do?” The potential answers included – Accept; stand and sue (not a great record of success); resign and pursue constructive dismissal (again not to be recommended based on experience); or refuse to work under the new terms. Victoria said that in UK law the contract is sacrosanct; therefore it is possible to bring breach of contract cases through the civil courts and she suggested that this may be a better route for compensation, particularly for the higher paid. Victoria also recommended that trade unions bargain for the protection of contractual arrangements, leading to the incorporation of their terms into contracts.

Enrico Tortolano

The morning finished with an entertaining presentation from Enrico Tortolano of PCS on economic segregation – the case against low and regional pay. Enrico presented a comprehensive outline on the arguments against low pay by setting out the shocking statistics of wealth inequality in the UK. The richest 1,000 people in the UK have increased their wealth in the last 3 years enough to pay off the entire UK deficit, and their combined wealth totals £414bn.

On the issue of regional pay, Enrico dispelled the many myths which abound and praised the trade unions who mounted such a vigorous and generally successful campaign against the proposition of regional pay in the public sector. More recently, the government has looked to its tame think tank, Policy Exchange, to resurrect the arguments again in its 2012 publication “Local Pay, Local Growth: Reforming pay setting in the public sector”. Again the arguments were refuted by PCS and other unions as fantasy politics based on flawed research and wholly driven by ideology.

Enrico concluded by reminding us that there were examples of successful alternatives and made particular reference to the events in Argentina in 2001 where the government - in response to a major financial crisis - raised public sector pay, increased the national minimum wage, strengthened trade union rights and increased taxes on the wealthiest. As a result, Argentina became one of the fastest growing economies in Latin America.

The afternoon sessions began with 3 workshops and these were reported back on by delegates. The topics covered experience of resisting attacks on facility time; a radical approach to organising, and alternatives to economic segregation. The reports back indicated that wide-ranging discussions had taken place in each of the workshops with the final workshop delivering an alternative economic strategy, the principles of which was widely supported in the room, but which was perhaps only practical in an ideal world!

The final speaker to address the conference was Hannah Reed, the TUC’s Senior Employment Rights Officer. Hannah provided an overview of the impact of changes to employment rights and the TUC response. Referring to the government’s agenda, Hannah told the seminar that the twin attack of making it easier to sack workers and harder for workers to enforce their rights, linked to the weakening of rights arising from restructuring, had combined to undermine the very fabric of employment rights in the UK. She told delegates that the TUC has campaigned for many years to stop attacks on worker rights. Their campaigning has a dual purpose – firstly to press for change, and secondly to remind people of the key role that trade unions play in such matters.

She emphasised that the current unfair dismissal changes were mostly targeted at the most vulnerable, with women and the low paid most susceptible to the changes in process and casualisation of employment. She also asserted that reduced compensatory awards impact particularly on older workers and those in the public sector.

With reference to the collective redundancy rights and changes to TUPE Hannah told delegates that job security will be undermined and again the most vulnerable will be the most likely to suffer.

Settlement agreements were attacked as most likely to be used to bully and intimidate individuals out of the workplace. The TUC’s key concern is that these conversations will take place before disciplinary procedures and Hannah strongly recommended that trade unions tell their members to say ‘NO’ to such approaches and insist on trade union representation.

Hannah ended her contribution by looking forward and urging representatives and unions to press for change. Her emphasis was on fair pay, protection of outsourced workers and reducing casualisation – all of which require a continued emphasis on building stronger unions.

There are still some places left at the IER's Workplace issues: learning from the front line conference in Liverpool on Wednesday March 27th. Click here to book your seat