Bad for workers, bad for business

Sara Ibrahim (second from right), Ian Murray MP Labour’s Shadow Minister for Employment Rights (third from right) and others.

EARLIER this week the Society of Labour Lawyers battled it out with the Conservative Lawyers over the motion that this ‘government is bad for workers and bad for business’. If you fall into either of the two camps then this proposition probably won’t surprise you.


SMEs (small and medium sized enterprises) are the backbone of the UK economy employing some 14.1 million people at the start of 2012. Not only do they collectively represent almost 60% of employment in the private sector, they are more likely to employ those who have been long term unemployed. When asked in a BIS survey in 2010 what the biggest obstacle to growth was, 33% said the economy and only 7% named regulation. The number of businesses that have named regulation as a factor in the running of their business has declined on previous years. Similarly, BIS boasted in their own press release on 14 September this year that the OCED named us the most flexible labour market in the world after only the USA and Canada.


If this government is serious about improving the future prospects of business in this country then it should look at its economic policy not regulation. The fact that it has fixated on ‘cutting red tape’ and liberalising the labour market in the face of this evidence shows this is an ideological totem for the Tories.


Successful businesses co-operate with their employees. Employment rights and regulations are a necessary framework for any inevitable disputes that arise between employers and employees. What the spate of proposed Tory reforms seek to do is tilt the balance of power from employees to employers in an attempt to prevent disputes altogether. Not only is this reprehensible it demonstrates a complete lack of understanding about employment law.


What we need is a government driven by one nation values that understands that what is good for businesses – namely growth – is also good for workers. Instead we get a bonfire of basic employment rights which is being sought by big business men like Beecroft, whose economic contribution to the UK is dwarfed by that of SMEs.


So what’s currently on the table? Well the latest offering is George Osborne’s ‘rights for shares’ brainwave which has been fast tracked to be made part of the government’s legislative programme. The non partisan group, ELA (‘Employment Lawyers Association’) commented in their response earlier this month that without adequate safeguards “this would appear to introduce Adrian Beecroft’s proposal to introduce compensated “no fault” dismissals.” If that worries you it should. Firstly the government had indicated that it wasn’t pursuing this idea – because of opposition to it. Now it is trying to introduce it by the back door having allowed only 3 weeks consultation. Despite this when the committee dealing with the Growth and Infrastructure Bill heard evidence this week, the idea was panned universally by all witnesses.


Rights for shares is so unpopular because it creates greater confusion for businesses while at the same time coercing workers into signing away hard won rights for as little as £2,000. The CBI called it a niche idea. No doubt this is because it could create a whole new area of litigation, shareholder valuation disputes in the place of employment tribunals. Further, with the increase in the qualifying period for unfair dismissal from 1 to 2 years effective in April next year, this will push workers to explore other options. What will they be? Most likely discrimination claims or public whistleblowing actions which are far more costly to litigate. The rub of these supposed reforms is that they will add to the burden on both employers and employees.


If that isn’t enough to give you pause for thought what about the impact of these changes on women, ethnic minorities and the disabled. These groups are disproportionately affected by an increase in the qualifying period as they often do not obtain long periods of continuous service to make claims. Also, some of the rights that are being proposed to be waived under the ‘shares for rights’ scheme include flexible working rights that mostly women use to manage childcare responsibilities. Perhaps it is because these proposals will fall on these groups that Cameron has developed a new enthusiasm to scrap all equality impact assessments.


I could go on but I would urge you to investigate for yourselves the hugely damaging proposals this government is pursuing. Forcing a ‘u turn’ on these latest policy proposals is vital for all.


This government is bad for workers, bad for business and bad for Britain.


Sara Ibrahim is an employment Barrister


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