05 May 2017
By Gregor Gall, Professor of Industrial Relations at the University of Bradford; Director of the Jimmy Reid Foundation; and Editor of the Scottish Left Review
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).
Workers’ rights today
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:
- A new Ministry of Labour should be established – led by a Secretary of State with a seat in the Cabinet, and mandated to represent the interests of workers in government;
- A Labour Court should be established, with specialist judges and exclusive jurisdiction to deal with all employment and labour related matters;
- A National Economic Forum should be created to encourage greater tripartite engagement in and ownership of major economic decisions and the direction of economic policy;
- The Ministry of Labour should establish Sectoral Employment Commissions with responsibilities including to promote and negotiate Sectoral Collective Agreements, set minimum terms and conditions of employment, mechanisms for the resolution of collective and individual disputes, and health and safety standards for the sector as a whole;
- Sectoral based bargaining should be complemented by enterprise based bargaining, applying the principle of favourability so that workers are entitled to the most favourable terms and conditions;
- Regulatory legislation should underpin collective bargaining on a range of matters such as pay, working time (including zero hours contracts), discrimination, equality, and health and safety at work. Existing statutory standards should be universal in scope and effective in application;
- Steps should be taken to resolve more disputes without recourse to the law, under collectively agreed procedures, or summarily by labour inspectors with powers to cancel dismissal notices and order reinstatement;
- Reforms to the law on freedom of association should be made to ensure a better balance between trade union autonomy and trade union democracy (with trade union elections conducted in accordance with trade union rules and procedures);
- Recognised or representative trade unions should have the right to check off facilities on request;
- More effective legislation should be introduced to stamp out blacklisting, which has a ‘long and pernicious pedigree in the UK’. To this end, the Employment Relations Act 1999 (Blacklists) Regulations 2010 should be amended to ensure that it is always illegitimate to refuse to hire workers on grounds of past trade union activity;
- It should be made unlawful to dismiss a workplace representative except for good cause, requiring the prior approval of a senior labour inspector, whose decision should be subject to possible review;
- On the right to strike, it should be lawful for everyone to be able to take collective action with others in defence of their social and economic interests in the workplace, and for their trade unions to organise such action. The Manifesto calls for the repeal of the existing statutory duty to give notice of an intention to take industrial action, as well as the duty to give notice of an intention to ballot for industrial action. It proposes that a simple duty to give no less than 3 days strike notice would be ample;
- Unions should also be permitted to take or to call for ‘secondary’ or ‘solidarity’ industrial action in support of any other workers in dispute (including industrial action involving another employer) where the primary action is lawful. There should be a ‘presumption that solidarity action is lawful’, because ‘the whole point of trade unionism is not only collective strength, but mutual support in times of trouble’.
- Moreover, lawful industrial action should not be regarded as a breach of the contract of employment or service, but as a temporary suspension only. To this end, those participating in lawful collective action should have the right to be reinstated at the end of the strike, if it is their wish to be reinstated.
Situation in Scotland
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.