A Manifesto for Labour Law: what would it look like in Scotland?
Professor Gregor Gall describes the Institute of Employment Rights' Manifesto for Labour Law and discusses its implementation in Scotland.
Professor Gregor Gall describes the Institute of Employment Rights' Manifesto for Labour Law and discusses its implementation in Scotland.
05 May 2017
In this abridged version of an article originally published by the Jimmy Reid Foundation, Professor Gregor Gall describes the Institute of Employment Rights’ Manifesto for Labour Law and discusses its implementation in Scotland. For the full version of the article, please click here.
The premise of the Institute of Employment Rights’ Manifesto for Labour Law is to shift the focus of labour law from statutory minimum rights to collective bargaining, allowing workers to organise and negotiate for higher wages and conditions within not only their companies but across entire sectors. Such sectoral collective bargaining could lead to wage and condition floors being set across industries, which can be built on at company level. This should lead to higher pay and better conditions, adding to workers’ job security and income. What this amounts to is using the law as an enabler rather than being wholly reliant upon it to deliver protection whilst recognising that without strong unions, individual employment rights are too difficult to enforce at a workplace level. Moreover, it also recognises that too strong a focus on individual employment rights wrongly suggests the only role of the state is to enforce minimum standards with everything else left to determination by the market.
However, the Manifesto for Labour Law also recommends that the definition of the legal term ‘worker’ is reviewed so that all workers are covered no matter the attempts to impose the bogus status of ‘self-employed’ upon them and that the repercussions for those employers who break the rules are both punitive and deterrent in nature. Part of this would involve rebuilding the regime of regulation and enforcement through having labour inspectors within workplaces to make sure the law is followed, labour courts specifically focused on employment cases, and sanctioning unscrupulous employers including through criminal proceedings.
Sectoral (industry-wide, multi-employer) collective bargaining along the lines deployed in Germany, Sweden, Norway and Denmark works by creating a floor of collectively bargained basic terms applicable to all employers in the sector. The terms are binding on all employers within the sector, whether or not they recognise unions or participate in the bargaining process. The minimum terms can be improved upon through local bargaining or in individual employment contracts, but they cannot be undercut. This forces employers to compete by innovating and investing in their workforce, rather than cutting wages. This works to improve productivity and increase wages, stimulating demand. The process can also help tackle some of the problems linked to immigration and the importing of cheap labour. To achieve this, the proposals include a new Ministry of Labour responsible for promoting collective bargaining, and Sectoral Employment Commissions that would set minimum terms and conditions for each industry, through the negotiation of sector-level agreements (see below on detailed proposals).
The extent and coverage of union recognition and collective bargaining have fallen in Britain over the last thirty years as employers and the state have attacked them. The consequence has been workers in Britain work longer hours for less pay than in most other competitor economies in western Europe. The overall effect of this is shown in the proportion of GDP going to wages falling from a high of 65% in the mid-1970s to 53% by mid-2010s. And given that this is the total spent on wages, it does not take into account the extremely unequal way these wages are distributed. To quote from the manifesto:
On average, British workers work more hours per week, more days per year, more years before they retire, after which they receive lower levels of pension than most of their European counterparts. In comparison to other European workers they have generally received less education and training, and (because of lack of employer investment) their productivity is lower. They get fewer paid holidays than almost all European comparators (the Working Time Directive notwithstanding). Their pay is so low that a great proportion of them are in poverty (and the State subsidises employers’ low wages in respect of a higher proportion of workers) than almost anywhere elsewhere in Europe. The gender pay gap is at a wholly unacceptable level … [with] ‘the law has been moulded purposefully to achieve these outcomes … [so that] by 2011 Britain had fallen to the second lowest in Europe in terms of the level of collective bargaining coverage. Coverage is probably less than 20% today, lower than at any time since before the First World War.
The following are the key detailed proposals to be found in the Manifesto:
The possibility exists that in the longer-term under independence that the Manifesto could be implemented. With full power on matters of employment law and employment relations, a Scottish Parliament could decide to do so. The issue then becomes one of political will. Under the first scenario, the devolution of employment law could take place under a new constitutional system (such as federalism). Post-Brexit this becomes more possible and, indeed, some pressure is building for the devolution of employment with the Scottish Trades Union Congress and the Unite union recently adopting this as policy. Under the second scenario, there is no need for devolution of employment law because independence has taken place.