Amendments to the Employment Right Bill will harm Britain’s flexible labour market and damage the economy, says John Hayes
Yesterday the government tabled amendments to the Employment Rights Bill following weeks of consultation and responses from business groups, trade unions and the wider “civil society.
In the main, these changes will be a “growth killer” not a growth maker but one change in particular will be really damaging to UK PLC and, in particular, those workers who rely on a flexible way of working to get into the labour market.
The accompanying press release states that “The Government Plan to Make Work Pay is “a core part of the mission to grow the economy, raise living standards and create opportunities for people across the country.” The government claims to have sought opinions on its “five consultations” and these are:
The application of zero hours contracts measures to agency workers
Increasing the maximum period of the protective award from 90 days to 180 days (per worker) for a failure to inform and consult during redundancy processes
New (pro union) legislation covering industrial relations
New statutory sick pay arrangements for 1.3 lower paid workers
Tackling non-compliance in the umbrella company market.
Some of the more controversial changes such as the “right to switch off” and interim relief for collective consultation breaches have been shelved. So far, so good.
But this is not good: it is not good to extend the “guaranteed hours” proposals to agency workers because this will have profound, adverse implications for the UK’s flexible labour market. It means that employers will have to “guarantee” the same hours over a 12-week period as the worker enjoyed over the previous 12 week (reference period). The government says that this will result in “increased security for working people to receive reasonable notice of shifts and proportionate pay when shifts are cancelled.”
However, for “security” read “rigidity”: the UK has the most flexible labour market in Europe and it is put at risk by this proposal. Many of the changes will now be subject to specific “regulations” to sit within the Employment Rights Bill. These will be long and complex.
So many questions are left unanswered. The government does not say, for example, who will pay for cancelled shifts: the agency or the end-employer? Are retail workers to be entitled to the same “guaranteed” hours in January that they had in December? Will the pay be the same in terms of overtime and bonuses over different reference periods? And more fundamentally: what if the agency (or employer) simply cannot guarantee the same hours over the next 12 weeks as the previous 12 weeks?
The proposals will severely compromise the ability of some industries, for example, retail, construction and logistics that are heavily reliant on agency workers to manage “on/off” supply or dips and flows in their business cycles.
Of all the proposed changes announced yesterday by Angela Rayner the promise to guarantee a fixed set of hours to agency workers is the most damaging and dangerous for the economy. Businesses need to make their voices heard.
John Hayes is managing partner at Constantine Law, a specialist employment and regulatory law firm