Justice at work

6. Justice at work

Creating an inclusive labour market, in which all those capable of work can find a job at decent wages, with reasonable opportunities for progression in an environment where they will be treated fairly and with respect, inevitably requires some level of regulation – either by statute or through collective agreements. Indeed, no one who was involved with the inquiry advocated a labour market completely free of employment regulation. The debate between employers and employees was about how proportionate and effective employment rights should be. As the BIS employment law review paper put it in 2011:

A core of fundamental employment protections is needed: to safeguard employees from unscrupulous businesses and to ensure that good employers are competing on a level playing field, not undercut by unscrupulous competitors.1

It was said that in a world where statutory employment rights are ubiquitous and unions often absent, employees often have no choice but to call in the lawyers.2 _{The fact that conflict in} the workplace has become much more individualised in this way raises challenges for employers and employees, especially those not in full-time employment.

The inquiry acknowledged that there are no easy routes to employment law reform and that problems in the workplace are often related to other corporate issues, such as cost pressures, technological change and management culture. However, several witnesses, including those from the legal profession, commented that part of the answer must be with prevention and better workplace relationships. It was said in this respect that there is a case for stronger voice (and social partnership) at work to help identify systemic problems.

The connections between perceptions of the troubled workplace and the desire for worker representation were considered by the inquiry. It was felt that although workers’ perceptions vary and are influenced by a wide range of factors (such as quality of management, individual expectations, unionisation, profitability and ability to pay for improvements), there is a substantial literature showing that poor conditions and injustice at work trigger union organising. According to Bryon and Freeman, such research…

… tends to underscore the contention of various analysts who have argued that there is a “representation gap” in the sense that there is unmet demand for union representation. This desire has not been assuaged by employer practices which aim to involve employees and manufacture non-union forms of communication.

Employment rights are damaging business?

The inquiry was told that the decline of organised labour and the lack of effective alternative forums for conflict resolution in the workplace have led to an increasing reliance on the floor

of employment rights.3 _{The evidence certainly shows that there}

has been a growth in UK employment rights over the past half- century, in part driven by EU directives.

On the surface it appears that British workers now have more protection at work than they did at any time in the past. Indeed, the inquiry was made aware that some employers now want to see a watering-down of employment rights, which are sometimes

presented as a serious “burden on business”.4 _{For example, the CBI}

director-general, John Cridland, stated:

… the increasingly bureaucratic and prescriptive nature of employment regulation doesn’t just impose costs on employers; it is fundamentally at odds with the more individualised, flexible working relationship that we see today.5

Employment rights

From the 1960s onwards, governments of all parties increasingly intervened in the employment relationship, establishing for example:

• the right to a redundancy payment (1966);

• protection against unfair dismissal (1971);

• equal pay for like work (1970) and then equal pay for work

of equal value (1983);

• the comprehensive statutory regulation of health and

safety at work (1974);

• non-discrimination in employment on the grounds of race

and gender (1975) – supplemented by similar protections on the grounds of disability (1995), sexuality, and faith (2010) ;

• the in-principle right to a limit on maximum working hours

(the 48-hour week) (1998);

• the right to four weeks’ paid holiday (pro-rata for part-

time workers) (1998);

• the national minimum wage (1999);

• a guarantee of equal treatment for part-time workers

(2000);

• the right for working parents to request flexible hours of

work (2002), extended to carers (2007) and then all workers (2014);

• rights for workers to be informed and consulted about

major changes in their workplace (2004);

• equal treatment rights for agency workers (2011);

• rights for shares scheme (2013);

• new employment tribunal rules (2013);

• reform of TUPE Regulations (2014);

• shared parental leave (2015).

However, the inquiry could find little evidence to show that the introduction of employment rights had in fact undermined the nation’s employment performance. Indeed, by international rankings the UK still has a very lightly regulated labour market, and even more so since the ease of dismissal was increased following the rise in the qualifying period for protection from one year to two years (in 2012).

The problem is people are ignorant of their rights; they are not presented to them.

It should also be noted that several countries have witnessed equally good employment performance over the last six years (such as Denmark, Sweden, the Netherlands, Germany and Austria)

and they all offer much stronger protections for employees.6

Rights for shares?

The inquiry was told that the relative weakness of employment protection legislation probably explains why so few employers have expressed enthusiasm for the new “owner-employee” arrangements allowing employees to waive their employment rights in return for shares.7 _{It was said that there are real risks} for employees if they waive their right for shares, including no recourse to an employment tribunal should they get into trouble at work. It was also said that any widespread application of the scheme could lead to a two-tier workforce with some employees waiving their rights for shares and others choosing not to do so. The Institute for Fiscal Studies warned that the schemes would “foster a whole new avoidance industry”. The inquiry could find no

evidence of employer or employee enthusiasm for the scheme.8

A rising tide of litigation?

The inquiry was made aware of the argument that the expansion of employment rights has fuelled a rising tide of litigation in

employment tribunals.9 _{It was said by employers that there are}

many vexatious claims, and that management time could be better spent on running successful businesses than in attending employment tribunal hearings.

These arguments were generally accepted by the government and

used to justify major changes to tribunal procedures.10 _{Before the}

reforms were implemented, many commentators suggested that they would act as a disincentive to legitimate as well as vexatious claims. In other words, workers who had genuine grievances would be denied access to justice. The evidence to date suggests that these concerns have been vindicated. In the period from

January to March 2014, the volume of claims was 67 percent lower than in the same period in 2013, before the procedural changes became effective. Moreover, the (37 percent) fall in the number of applications in the final quarter of 2013 (after the

changes) explains most of the fall in numbers from 2012.11

According to new research by Citizens Advice, seven in 10 potentially successful cases are not pursued by people at employment tribunals; and only 14 percent with valid claims are definitely being taken forward.12

Workers are now too frightened to take claims.

– Low-wage worker Before the recent changes the number of applications was much higher than a decade earlier. In part this can be explained by the submission of multiple claims (a substitute for class actions) relating to working time and equal pay. However, since the 2009 peak, the number of applications has followed a

gentle downward trajectory.13 _{Moreover, the number of claims}

was significantly higher from the early 1990s onwards than in the 1970s, when the labour market was notionally much less flexible.

One possible explanation for the increase in tribunal applications is that people are becoming more conscious of their rights and more enthusiastic about challenging bad practice. It may also be due to institutional changes in the world of work. For example, before the state began to intervene it was assumed that union representatives would spend much of their time resolving workplace disputes between individuals (or groups of workers) and their managers. The trends in tribunal application numbers and union membership suggest that this may have been the case. Employment tribunal applications certainly rose as union membership fell.