The Institute for Employment Rights (IER) – an independent, UK think tank - has put forward detailed policy proposals to reform UK labour law. A Manifesto for Labour Law: towards a comprehensive revision of workers’ rights represents a timely intervention to tackle low pay, extreme wage inequality, and job insecurity whilst promoting a stable and productive economy.
Numerous recent scandals have highlighted the need for reform of corporate governance, employment rights and labour law. Recent UK parliamentary enquiries into the ‘Victorian’ conditions workers faced at Sports Direct, the destruction of jobs and pensions savings at BHS, and the denials of a national minimum wage to drivers for delivery company Hermes have shown that the current UK system – as elsewhere in the world – is seriously failing workers and damaging the economy.
The IER report is particularly timely given the number of reviews being undertaken into the future of UK employment rights by the Labour Party, the Conservative Party and by the Department for Business, Energy and Industrial Strategy (BEIS) – all of which IER hopes to influence with its 25 policy recommendation.
At the heart of the IER’s proposals is the extension of collective bargaining. IER believes regulation of the employment relationship should be tilted towards collective bargaining rather than legislation. Currently the UK has less than 20 per cent of its workforce covered by collective bargaining arrangements, against an EU average of 62 per cent, with countries in western and northern Europe mostly above 80 per cent coverage.
British workers have on average the longest working hours in Europe, and since 2010 the number of people working in excess of 48 hours per week has risen by 15 per cent to 3.4 million. Yet productivity is 31 per cent lower than in France, and for the first time there are now more people in working poverty (6.7 million) than out-of-work poverty (6.3 million).
Executives earn 183 times average workers’ earnings. The UK is the most unequal country in the European Union.
Unsustainable status quo
Against this backdrop, the IER proposals – developed by 15 leading labour lawyers and academics – represent a wholesale challenge to this unsustainable status quo, through a comprehensive revision of the governance, legislation and practice of labour law, and the re-establishment of extensive collective bargaining structures.
Key proposals include:
The establishment of a Ministry of Labour, to ensure the interests and voices of British workers are represented in government, with a seat in cabinet. The Ministry would promote employment, supervise labour standards, promote collective bargaining, seek to eliminate employment insecurity, and would oversee an improved framework of statutory rights. It would also be charged with labour planning to ensure the British workforce has the skills and education needed for the contemporary and future workplace.
A National Economic Forum should be created involving representatives from government, employers, unions and independent academics. The Forum would put forward strategic plans, particularly for skills and training, scrutinise the impact of proposed labour law reforms, decide the direction of economic policy and ensure that workers’ voices are heard on economic issues.
Sectoral Employment Commissions should be established to negotiate Sectoral Collective Agreements (SCA). These would promote sector-specific collective bargaining and regulate minimum terms and conditions, reversing the current ‘race to the bottom’ in certain sectors, where employers are driven to cut pay, terms and conditions in order to compete. SCA’s, and Wages Council orders would apply to all workers and employers within a given sector regardless of employment status, safeguarding vulnerable workers and those with precarious contracts. Collective bargaining would tackle low pay, excessive working hours, and the gender pay gap.
A strengthened framework of statutory rights would ensure universal coverage of employment law for all workers regardless of employment status. False self-employment would be prevented by shifting the burden of proof onto the employer, denying employment rights.
Labour courts and labour inspectors would be established, with reformed employment tribunals functioning as the first tier of a new autonomous Labour Court System. This would be free at the point of access to ensure that rights are genuinely enforceable.
The right to strike would be brought back into line with international standards and the Trade Union Act 2016 would be repealed in its entirety. Successful collective bargaining requires strong trades unions, and must be underpinned by the right for workers to take action in defence of their social and economic interest, and in solidarity with others involved in lawful action.
The proposals have been well received by both the Labour party leadership and major trade unions, with the TUC, UNITE, Unison and 11 other trade unions pledging support for the proposals.
Shadow Chancellor John McDonnell told the Labour party conference that a Labour government would look to implement the IER’s manifesto for labour Law:
“Until working people have proper protections at work, the labour market will always work against them. To achieve fair wages, the next Labour government will look to implement the recommendations of the Institute of Employment Rights. We’ll reintroduce sectoral collective bargaining across the economy, ending the race to the bottom on wages.”