Government advice to interns fails to address the root cause of their exploitation

Victoria Phillips is head of employment rights at Thompsons Solicitors

The Thompsons Solicitors UnionHome blog

 

Internships have become a way for unscrupulous employers to undermine and evade the National Minimum Wage (NMW) and the government has recently published new guidance for interns with the stated aim of helping them to protect their right to fair pay.

 

A new video and posters attempt to explain to interns what their rights are in relation to NMW, where to go for more information and what action they can take if they feel they have been exploited.

 

Alongside the new guidance, HM Revenue and Customs (HMRC) – who are meant to enforce NMW on behalf of the government – will send out letters to 200 employers who have recently advertised internship opportunities and unpaid work to notify them that checks will be carried out to make sure that employers are remunerating interns in line with the law.

 

So far so positive but the government is still far from being able to guarantee the end of interns’ exploitation.

 

Recently Unite said it will be writing to HMRC to report that a third of the UK’s top 50 charity employers are using unpaid interns – despite the government’s previous attempts to enforce a code of conduct for the use of interns across all sectors.

 

Unite’s move follows its report in May, made with Intern Aware, Interns in the voluntary sector – time to end exploitation, which showed the extent to which charities are using ambiguities in NMW legislation to avoid paying their interns.

 

The sad fact is that, however much the government seeks to inform interns about their rights and encourage employers to implement best practice, the NMW regime is too easily ignored.

 

Many un-paid internships are already illegal. As the government’s new material states: ‘if the intern has a list of duties they have to fulfill and fixed times when they have to work, the intern is likely to be a worker and entitled to be paid’.

 

And yet despite the law many interns are doing a job of work and are carrying out the same duties as permanent employees in the same office – except without the pay they are legally entitled to or the likelihood of securing a paid role once the internship ends.

 

What interns – and anyone else in low paid work – really need is a National Minimum Wage regime that is both robust and properly enforced to make sure that wage exploitation by employers is made far more difficult.

 

Holding a mirror, shining a light – Trade Unions, Liberty and Human rights

The annual Human Rights awards,  hosted by Liberty, has rightly become an important fixture in each autumn’s calendar.  An opportunity to be humbled and inspired in  equal measure – a chance to learn about and reflect upon the civil liberties challenges and responses of the past year.

 

This year co-incides with the 60th anniversary of the European Convention on Human Rights – the forerunner of our own Human Rights Act., now in its own 15th year. And for something so long established, it is truly frightening that there are so many examples of adherence to this piece of international and domestic law being seen as voluntary, or partial.

 
So the awards evening was a time for, in my view, the true heroes of our age. Individuals and groups  who, Not for profit or personal recognition, but out of  what  Jude Kelly called “a ferocious idea that we all belong together”, stuck  their necks out, refused to  give in, drew their own lines in the sand and were determined to tell – or reveal – the truth.

 
“In a time of universal deceit, telling the truth is a revolutionary act,” wrote George Orwell, and that was a strong  theme throughout he evening.  Frances O’Grady and Chukka Umunna presented the “Collective Voice” award to the  Holocaust Educational Trust who spoke of the challenges of the transition from the Holocaust being living  history to just history. Jinan Younis received the Christine Jackson Young Person  award  for setting up  a  feminist society at her all-girls school and being  bullied and harassed because of it. Paul Houston spoke most movingly after receiving an award  for defending rights and  freedoms in response to sustained and “toxic” attacks on the Human Rights Act  by some  politicians and  media after the  death of his daughter. It surely cannot be right to usurp something like that for such undignified, dishonest ends.

 
Caroline Criado Perez – the woman whose campaign against all-male British banknotes    resulted in   Jane Austen going on the back of tenners from 2017 – used her acceptance speech to highlight the International Day for the Elimination of Violence Against Women (or in the UK, http://www.endviolenceagainstwomen.org.uk/).  A long title, but apparently police in England receive 1 call a minute on this  subject - but research shows it takes 35  attacks  before someone will pick up the phone and call for help. It is right to describe this, as she did, as a “global health emergency”.

 
Image of the night for me was the video of Celeste Dandeker-Arnold’s award winning dance troupe. the first fully integrated disabled and able-bodied group. It was utterly amazing to see how, for example, differently abled people, together with whatever supporting aids they needed could meld so seamlessly together.

 

If you have stayed with this piece so far, you may be thinking “all well and good, but so what….”  There are two answers to that.

 
The first is that the right  for all of us to be treated equally under the law is truly under direct  threat. Barriers to access justice are being  erected. UK Newspapers carrying  Edward Snowden’s disclsoures are criticised – including having journalists gratuitously detained under the Terrorism Act, and editors summonsed   before select Parliamentary committees (although their counterparts in the US and Germany not subject too such measures. Whole communities are being placed beyond the law. Stephanie Harrison QC who won an award for her work on migrants’ rights, gave a cry from the heart:  “If we do not stand to defend our rights we will lose them.”

 
The second is that we as trade unionists are directly affected by all of this.  Not just because we are also members of society and citizens. But because we too do what we do and believe what we believe   because of that “ferocious idea”.  Because we - our society – achieves more by co-operation that conflict, because we dare to dream – because we assert a human right to the imagination. Because there are many, in politics, in the media who wish to deny our rights and   diminish our aspirations.

 
It remains my view that many more trade unions and trade unionists need to be part of Liberty. We  can’t leave this all to the lawyers. Human rights are everyone’s business. The awards evening  emphasised the connection with  our core and common purpose,  and that we can and do change things  by what we do.

 

Filtering “common sense” to benefit the employer

Victoria Phillips is head of employment rights at Thompsons Solicitors

The Thompsons Solicitors blog

 

David Cameron has stepped up his campaign against worker’s rights by asking for a “common sense filter” on EU ‘red tape’.

 

A business task force commissioned by the government and made up of only employer representatives has identified 30 priority areas where EU regulations are said to be a barrier to economic growth, from ‘excessively strict’ food labeling to health and safety assessments.

 

The report is predicated on the basis that anything that protects people, such as workers’ rights, data protection and even controls on clinical trials for new medicines is a costly ‘encumbrance’.

 

EU regulations on employment rights apparently cause ‘a huge headache’ for employers and the “common sense”. The solution? Attack the rights of working people.

 

The report suggests, amongst other things scrapping proposed protection for British workers sent to other EU countries, removing the rights of agency workers – an increasingly common feature of the employment market in rapidly privatising public services – to equal pay with non agency staff, and stopping measures that would make abuses of work experience by employers illegal.

 

Singled out for particular attack by the taskforce is the Working Time Directive (WTD) because of ‘problems’ caused by European Court rulings that have ‘expanded the original scope of the legislation’.  It’s a familiar refrain as it parrots the government’ line in its consultation on the issue in May 2011.

 

The report’s self justificatory line that employment and health and safety laws simply represent a burden to business and bring no benefit is familiar stuff from this government and its mates in business but marrying that rhetoric with “common sense” is dishonest as good employers are well aware.

 

Read the Labour & European Law Review on the Business Taskforce report “Cut EU red tape” – http://www.thompsonstradeunionlaw.co.uk/information-and-resources/lelr/weekly-342.htm

 

ENDS

Community organising is so important – in all its forms

I was privileged recently to spend some time in the company of iconic US community/union organiser Arnie Graf. Part of his current brief is to revitalise the Labour Party’s links with the community and his work has won many plaudits.

 

As someone who passionately believes that the future of trade unionism in the UK depends on us meaning as much to people in their communities as we do to them at work, the occasion,   a fringe event at the TUC, organised by Unite, on Community Trade Unionism, was “no miss” event.

 

There are, self-evidently, many models of “community organising” on display.

 

Unite has its Community section, now 4000 strong which is deliberately aimed at recruiting – and dare I say organising – unemployed people. Philosophically and practically you can see the attraction. High levels of unemployment undercut the terms and conditions of those in work. The young unemployed have no experience of trade unionism and involvement in the Community Section will mean that they already have access to support when they enter the workplace.  And it is also empowering for the individuals.

 

In fact, this  seem to be the most  noticeable achievement of the section so far – enabling people  who  do not have a voice,  or  who  feel they cannot exercise influence, the means to do just that.

 

But whilst self-empowerment and the democratisation of society are central aims of trade unions, they are not our only defining qualities.  The Unite initiative arguably takes unions into new territory. “Ultimately isn’t about numbers signed up?” asked someone at the fringe event.

 

I think that is a question for another day.  The increase in people who are active is the most important thing of all at present. Whose logo they have on their t-shirt is a secondary issue.

 

An alternative model of community organising in TSSA, the small but impressive Transport and Salaried Staffs Association, is articulated by their National Organiser Nadine Rae.  There is clearly a community of interests shared by all those who use the rail network, either for employment, commerce or just travel.  TSSA has appointed three organisers whose brief is to make the links with the users of the services their members provide – principally the travelling public.

 

I believe that this is important in a number of ways.

 

First, it broadens the alliance of people with the same overall strategic objective – better funding for and management of the rail network. More people equals louder voice.

 

Second,  it  isn’t just numbers -  it  broadens the base of the campaign, and it is  a fair bet that many commuters in, say,  the Home Counties  may not  share the same overall politics as the  union – so there is a real increase in the “reach” of the campaign.

 

And third, it makes trade unions a relevant voice in  the community and not just the workplace.

 

Incidentally, a potential hypothetical criticism is that the campaign does not add to the “bottom line” of increased   numbers of members.  But I think (and it is  for the TSSA NEC, of course, not me  to say) the advantages  could well eclipse the membership issue – not least the way in which   this has helped make  rail  a key political issue now and in the 2015  general election too.

 

There is a   third model of community trade unionism that my own union, CWU, has developed. This takes the form  of  specific campaigns to  root  trade unions in  the communities where  our members live, rather than   have a  dedicated resource for  community  organising  that  is  separate   to those campaigns.

 

That is clear a prerequisite for our largest campaigns – Keep the Post Public and Save Our Royal Mail for example. But that is more about engaging the public as part of a grand coalition, than getting our members to take our union home with them.

 

Our campaigns on Climate Change, Mental Health and Housing are all about practical ways in which the union can – and does – respond to issues that affect members at home and at work.  These issues self-select by virtue, for example, of policy motions to our conference. They are therefore being generated and driven by our members and local reps, and not Head Office.

 

The advantage of this approach is – clearly – that is it “organic”.  It grows up from the roots of our union. The next stage of development would be see if these stand-alone campaigns should or could to be joined together to make a comprehensive “community programme.”

 

In my view, the approach adopted by the NZCTU is one which deserves much wider recognition. There, affiliates have ceded some autonomy and money to create a dedicated organisation looking to mobilise support from the community for trade unions and issues identified as trade union priorities.  Here, the emphasis is on additional resource and leverage initially through attracting supporters in this way and from this constituency rather than increasing membership.

 

Graf himself talks of   the transformational value of focussing on Community Leaders – essentially this means that these leaders bring their supporters with them rather than the union having to try to engage the self-same supporters directly.  Within the CWU, we have had direct examples of this with pockets of potential members from the same non-English speaking demographic.  Making contact with and then working with a respected member of this group’s community was not just an effective way to step up recruitment of this group – it was the only way.

 

In some unions, historically there has been a close overlap between community and workplace  – Community’s membership, for example, was based in what were known as “steel towns” or “mill towns”. For much of the last century,  the  NUM occupied  similar   territory  with  pits  dominating  (or in some cases  generating)  the surrounding  communities.

 

But now we have a different challenge – on the one hand we are living through a political hurricane, uprooting old certainties and structures. As one senior shadow cabinet member remarked to me recently “Who would have thought that everything we built over 13 years could be swept away so easily.”  The effect on our values is chilling and destructive.  So we need a political, organisational response.

 

But on the other hand, our members and potential members, our supporters and sympathisers are suffering and many feel marginalised and disempowered.

 

And that is why community organising is so important – in all its forms – in 2013. A movement rooted in both workplace and community is better placed to withstand attacks on either. Informed, and empowered and organised people are not only a defensive tactic – it also increases the resources and power of progressive agents for change. We must not let any confusion about what is meant by “community organising” distract from that key objective.

 

Read the Unions21 publication The Future for Union Community Organising

 

When the politicians get it wrong! – Again!

Warren Town is SoR Director of Industrial Relations

This week has seen more than just the St Jude storm; we have also seen a flurry of judicial outcomes that question if we should leave decision making to politicians.

Take the payout for the sacked head of services for Haringey. This is reported to be in the region of 600k but as it is under the terms of a confidential agreement we cannot be absolutely sure of the exact sum. Leaving the amount aside and the morality of this payment, it is worth considering how it can happen that someone who is ultimately responsible for the safety of children, can in fact be recompensed for a dismissal for what was seen by many as failure. The answer is as simple as it is tragic.

 The Children’s Secretary at the time was Ed Balls [Labour] instead of leaving the decision to dismiss to the appropriate authority; he decided to act. He dismissed Ms Shoesmith and that decision was seen as unfair and in the words of the Court of Appeal, Ms Shoesmith had been ‘Unfairly scapegoated’ and the decision taken by Balls was ‘intrinsically unfair and unlawful’.

Ed [Balls not Miliband] now takes the view that the payout to Ms Shoesmith now ‘leaves a bad taste in the mouth’. But what of his decision to dismiss; does this not leave us with that same bad taste because had he left the decision to a competent authority than we, the taxpayer, would not have to foot this bill. It is all very well trying to blame someone else when the root cause is your own incompetence.

Now we move onto another decision that has hit the news this week. The coalition has lost a Supreme Court of Appeal about the flagship policy- ‘Back to Work’ schemes. These scheme required claimant’s to work for nothing or take a benefit cut. 5 Supreme Court Justices ruled that the government had failed to provide “sufficient detailed prescribed description” of the schemes and what would happen if people refused to take part. A further claim that the schemes amounted to ‘Slave Labour’ was not upheld but nevertheless the government now has to spend valuable time revisiting the terms of the schemes to get them fit for purpose.  In response the government Minister responsible for this debacle [Iain Duncan Smith] said “we have always said that it was ridiculous to say that our schemes amounted to forced labour, and yet again we have won this argument’.

Umm, no you haven’t, you have had the status of the commitment clarified but you lost the appeal and you now have to revise the scheme to meet the requirements of the ruling. Talk about cheery picking your argument!!

And now we come to the real humdinger!  Having lost at the first hurdle to enforce his decision to cut back emergency and maternity services at Lewisham, Jeremy Hunt goes all out to argue his case at the Court of Appeal. And they say- he does not have the power to do so. The High Court had already said that Hunt’s decision was unlawful and lacked power, not to mention that it breached the National Health Act 2006. It would appear that the Court of Appeal agrees with the lower court and the Minister is left with egg on his face and a bad taste in his mouth.

Then again you need to look carefully at the response from the coalition. Not content with squandering public money on a fool’s errand he now wants’ to ‘…look at the law to make sure that at a time of great challenge the NHS is able to change and innovate when local doctors believe it is in the interests of patients’. I may have missed something here but how do the’ interests of patients ‘ conflict with the interests of the local populace who opposed this move and are likely to be the patients that he has decided that he and his cronies must protect?  It smells of sour grapes and the use of political power in government to get what he wants despite the wishes of the local people. It does seem at odds with the concept of ‘big society’ [remember this idea from the coalition- as Hunt has clearly forgotten] that his leader, Dave Cameron, wanted to champion. A sort of power to the people thingy.

It has not been a good week for the politicians, but it has been an expensive week for the rest of us.

FINANCIAL PENALTIES FOR EMPLOYERS AT TRIBUNALS: PROTECTING WORKERS OR TOPPING UP GOVERNMENT COFFERS?

Victoria Phillips is head of employment rights at Thompsons Solicitors

The Thompsons Solicitors blog

 

Last week the minister for employment relations, Jo Swinson, said on Twitter that section 16 of the Enterprise and Regulatory Reform Act 2013 will come in to force from April next year.

 

This gives employment tribunals the power to impose financial penalties of between £100 and £5,000 on employers who breach the rights of their employees.

 

While we have finally got the information, its announcement on social media was not welcomed.

 

Section 16 of the Act adds a new clause to the Employment Tribunal Act 1996 which gives tribunals the ability to impose a financial penalty on an employer where there has been a breach of employment rights and the tribunal considers that, in the circumstances, the employer’s behaviour has one or more aggravating features.

 

‘Aggravating feature’ has yet to be defined but it appears that tribunals can consider the employer’s ability to pay when deciding whether or not to impose a penalty. The reality is that there are many aspects of the procedure which mean the ‘teeth’ of this legislation will be blunted.

 

The penalty will be set at 50% of the value of compensation payable by the employer, but if the award is less than £200 the penalty will be capped at £100. If the award is more than £10,000 the penalty will be capped at £5,000.

 

Incredibly, if half the penalty is paid within 21 days it will be reduced by up to 50 per cent. Why should an employer get a discount for swift payment while the claimant receives nothing extra?

 

Even though the penalty is awarded against an employer because of their poor behaviour towards an employee, the fine is not an additional sum paid to the claimant, but instead goes into government coffers. What’s more, the penalty may be applied regardless of whether a financial award of compensation is made against the employer.

 

A government that has steadily eroded employment rights hasn’t changed its spots. This seems simply to be a tax on tribunals and, at best, a gentle (discounted) slap on the wrist for bosses who mistreat their staff.

 

To read Thompsons’ response to the Enterprise and Regulatory Reform Bill, click here  

 

Super-riches don’t ‘trickle down’, they ‘hoover up’

Luke Hildyard head of research at the High Pay Centre speaking at Unions21 conference 2013

Are people bothered about the huge gap between the super-rich and everyone else? There is some scepticism about this.

 

When the British Social Attitudes Survey asks if people support redistribution of wealth from rich to poor, opinion is more or less evenly divided. Support for the Government’s welfare cuts perhaps implies that the public will not unconditionally back measures designed, in part, to provide some limit to the gap between top and bottom.

 

Conversely, when the question considers inequality as a social problem, rather than identifying a possible solution (ie redistribution via Government) the response is much stronger. Polling for the High Pay Commissions found that 73% of the population agree with the proposition that differences in income in Britain are too large. Just 8% disagree.

 

The problem with both arguments is that they start from the assumption that the public broadly understand the scale of the nation’s wealth controlled by the rich. As the new video from the Inequality Briefing shows, this is not the case.

 

Polling by Ipsos Mori shows that the public’s perception of how wealth is distributed in the UK seriously understates the gap between the richest and poorest 20 per cent.

 

Respondents felt that in an ideal world, the top and bottom fifth would have about 27% and 15% of the nation’s wealth respectively, but in modern Britain they estimated the breakdown was more like 42% to 9%.

 

In actual fact, the figures are more like 62% to 0.6%. The richest 1% control more wealth than the bottom 60%.

 

This has significant implications for the debate about the cost of the super-rich. The huge gap between their own wealth  and that of everyone else makes it look like less a case of  ‘trickle down’ , where spending on part of the rich benefits the rest of the population, than ‘hoover up’, with those at the top using their power and money to grab an ever increasing slice of the nation’s wealth at the expense of everyone else.

 

The video also presents a problem for those such as Boris Johnson who has repeatedly called for an end to the antipathy towards bankers. Though we are now five years on from the banking collapse, public resentment towards bankers and other members of the richest 1% actually underestimated the extent of their self-enrichment!

 

(Luke Hildyard is head of research at the High Pay Centre – an independent think tank examining issues of top pay and corporate governance. They are hosting a debate on the impact of corporations on the North East economy this week in Newcastle)

Further tinkering removes tribunal fees safety net for almost everyone

Victoria Phillips is head of employment rights at Thompsons Solicitors

As of July this year, Employment Tribunals stopped being free to access. The Ministry of Justice claimed this was to save money for the tax-payer and clamp down on workers who chose to unnecessarily escalate workplace disputes to a tribunal.

 

No doubt aware of the backlash this move would generate, the government sugared the pill with a facility whereby vulnerable low-earners could receive a full or partial waiver of tribunal fees.

 

However, in a reminder of the government’s true colours, this week has seen new restrictions come into force which drastically weaken this essential safety net leaving the remissions scheme almost worthless and playing into the hands of unscrupulous employers who want to take advantage of workers.

 

Now individuals – or their partners – with savings or investments of just £3,000 will have to pay the full £1,200 fee, whether or not they are out of work or on a low wage. That’s £250 upfront and £950 due on the day of the tribunal.

 

Research commissioned by the TUC shows that just one in 20 workers over the age of 50 are now likely to be fully exempt from paying the full amount. And, with fewer than one in four workers over 50 likely to receive any kind of financial support, those sacked because of their age may end up paying the full amount as well. The analysis also shows that, even among households where someone is on the minimum wage, less that a quarter of workers will benefit from any support.

 

The change also means that disabled workers are more likely to be disadvantaged, with only one in nine exempt from paying the full £1,200.

 

TUC General Secretary Frances O’Grady has commented that the changes “could mean thousands of older workers having to raid their retirement savings if they want to seek justice against an employer that has mistreated them [and] make it easier for rogue bosses to get away with mistreating staff, not paying them properly and dodging the minimum wage.”

 

Read Thompsons’ response to the fees remission consultation at: http://www.thompsonstradeunionlaw.co.uk/information-and-resources/moj-fees-remissions-thompsons-response.htm

 

Click on the image to access the full Thompsons Labour and European Law Review

 

 

 

The link that matters to millions

Paul Moloney is a member of the Unions21 Steering Committee and Industrial Relations Manager for the Society of Radiographers

There has been a lot of criticism of the lack of substance to the policy announcements from the Labour Party during conference week. Important announcements about abolishing the bedroom tax, freezing fuel bills and the promise to repeal the 2012 Health Act should not be underestimated and the impact these will have for working people and the working in and relying on our NHS will be immense.

 

Nevertheless the policies announced are all details and the lack of an over-riding context for them plays into the hands of those who claim there is really little difference to choose between all three main parties. This of course is further evidenced by Nick Clegg’s apparent indifference to who he will get into bed with, as long as he can get into bed.

 

So you have to go back to the Andrew Marr interview before the start of the conference to find the most important announcement made by Ed Miliband, and also to find the issue that will win the next election outright for the Labour Party if articulated correctly.

 

During the interview Ed Miliband referred to the fact that, for the first time in Britain’s post war history the link between economic growth and improving the standard of living of the majority, working people, has now been well and truly broken.  Even Thatcher was not able to do this.

 

Members of my own union, the Society of Radiographers, have not had a pay increase above RPI for 5 years. Even with annual increments their pay has failed to keep up with inflation. In addition more of their disposable income is now spent on pensions so their standard of living has decreased significantly. Pay cuts have also become more common place as highly skilled workers responsible for delivering high levels of patient care find their jobs re-banded downwards.

 

This is true of other sectors where pay freezes and even cuts have become the norm in both the public and private sectors.

 

For the last 3 years RPI, however measured, has been higher than average earnings.  But it is not the statistics but the message behind the figures that matters. If the statistics say inflation is higher than earnings then that means quite simply that any improvement in the economy is not being translated into improving standards of living for the vast majority. In the past, although the distribution was unequal, there was still an overall improvement when the economy grew. The fact that this has come to an end will be seen by those the Tories represent as the holy grail of politics and the ultimate aim of the Thatcher revolution. To the rest of us it is nothing short of the cynical use of austerity measures for political and ideological means.

 

So Ed is right to highlight the problem. But to win the election he must do two things. He must ensure his policies ensure the link between economic growth and earnings growth is restored and he must ensure the Tories and their coalition partners are held to account for exploiting the austerity measures in a way that has deliberately broken the link. If he does, and the TUC and individual unions work with him, then victory at the election is not just possible but will be meaningful.

 

So let’s not have a debate about the links between different sectors of our movement and instead start talking about the link that really matters for working people, the link between economic growth and earnings growth and in so doing expose the deeply ideological approach of this Conservative led coalition.

A voice at the top table

Joe Dromey photo

Joe Dromey is Head of Policy and Research at the IPA. He writes in a personal capacity.

The financial crisis of 2008 and the recession that followed were supposed to mark an historic watershed. There could be ‘no more business as usual.’ Yet this is exactly what we have returned to.

 

Britain’s model of corporate governance – based on the principle of shareholder primacy – is not fit for purpose. Shareholders have proved themselves unwilling or unable to undertake their role as custodians of our large companies. With shares being held for increasingly short periods of time, the system has incentivised a focus on short-term profits over long-term investment. They have failed to curb excessive executive pay or to identify and address unsustainable business practices. And shareholder primacy means that other stakeholders – including employees – are not given a say.

 

We need to reform our corporate governance in order to give employees a voice at the top table – on both the board and the remuneration committee.

 

More than anyone, it is employees who have the greatest interest in the sustainable success of the company. Employees understand the business, its services, products and customers – and, with the right training and support, they can really contribute to decision-making. Workers on the board will add a dose of realism to discussions at the top table; bringing an understanding of how things really are at the shop floor. And by breaking the cosy clique on remuneration committees, we could also reverse the process whereby the share of profits going to wages has fallen whilst executive pay has soared.

 

There is a wealth of evidence of the benefits of participation at work. On an individual level, it is correlated with engagement and wellbeing. On an organisational level it is associated with productivity and innovation.  It should therefore be a serious concern that Britain has the second lowest levels of employee participation in the EU, beaten into last place only by Lithuania. By adopting more participative ways of working – including employee representation at the top – we could improve both the workplace experience and productivity.

 

So what are the arguments against employee participation in corporate governance? Some might say it is unworkable or radically left-wing. Yet in most other EU states – including Austria, France, Germany the Netherlands and Sweden to name a few – worker representation on the board is required by law. It works well and is largely uncontroversial.

 

Others argue our adversarial industrial relations and opposition from employers would make it impossible in the UK. But this is to assume that such attitudes are fixed and unchanging. In fact, as the High Pay Centre has shown, employee representation on boards was bitterly opposed by employers in Germany. It was only after implementation that they came to accept and indeed value the measure.

 

Some insist employees simply aren’t up to the job. In their response to the Government’s consultation on executive remuneration, the CBI claimed employees would ‘add little’ to the process of decision making as they have an insufficient ‘understanding of the business’ compared to non-exec directors. These arguments risk sounding patronising and dismissive. And if workers in Europe are capable of sitting on the board, why should British employees not be?

 

Employee representation on boards and remuneration committees would be a massive opportunity for the labour movement. It would give employees a say at the top table for the first time. In organised workplaces, it would give unions another channel through which they could influence employers. In those without unions, it could offer the opportunity for them to organise and gain membership.

 

But it also poses a significant challenge to trade unions. In her exceptional Attlee Memorial Lecture in April, Frances O’Grady highlighted the union movement’s ‘strategic failure’ to embrace co-determination and industrial democracy in the post-war era, focusing instead on fighting incrementally to improve terms and conditions. O’Grady claims that to do so would have meant taking on a role that ‘is not just more ambitions but more demanding, than the one we usually have now. It means accepting responsibility, moving out of our comfort zone of short-termism, to taking the long view and championing the greater good.

 

For a movement used to adversarialism, board level representation may require a change of mind-set; from sitting across the table from the boss to sitting around a table together. Unions, as they do in Europe, would still retain the independence to fight for their members both individually and collectively. But they would also be responsible for working collaboratively to set the direction of the organisation. Such a system would only work if there is good-will, trust and commitment to develop a workable consensus on all sides. Of course, such a cultural shift would be required of many employers too, but as the German experience shows, it is possible.

 

Having employees sitting on boards and remuneration committees would strengthen workplace democracy, encourage long-termism and ensure fairness. It would be good for workers, good for business and good for the country.  And after all, what could better define a One Nation Economy than having workers take their rightful place at the top table.

 

Joe Dromey (@Joe_Dromey) is Head of Policy and Research at the IPA. He writes in a personal capacity.

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