Labour market regulation is always a balance between providing reasonable flexibility for employers with fair treatment, access to opportunities and security for individuals. Too much regulation can be burdensome and discourage employers from hiring, but too little and employees will be at risk of unfair treatment and insecurity.
Generally, the UK has been seen to have a reasonable balance between the stronger regulation and worker protections seen in many other European countries, and the more liberal labour market regulation in North America. We recently updated a report we first published in 2015 assessing evidence about how well the UK performed on labour market outcomes and the quality of work compared with other OECD economies. Both reports showed that the UK performed relatively well on a range of employment outcomes and concluded there was little advantage to be had from moving towards either significantly greater regulation or deregulation of the UK labour market. However, there is recognition of the need to better reflect changes in work and workplaces in recent years, and to encourage wider access to work to increase rates of employment.
The new Labour government promised to modernise regulation, and to provide more protection and security for workers. The recently published Employment Rights Bill, part of the wider ‘Make Work Pay’ agenda, with 28 provisions, is the most extensive change to employment regulation in decades. As the CIPD we’ve been closely involved in the consultations to date, and will continue to be, bringing the voice and influence of the profession that will be at the heart of understanding and embedding changes.
There are proposals aimed at supportive practices such as improving Statutory Sick Pay, support for bereavement, the menopause, parental leave, and protections against harassment, and these can help maximise labour market participation. Some changes will more directly impact employers in how they recruit and manage their workforces, such as removal of the qualification period for unfair dismissal, further restrictions on fire and rehire practices and new rights for zero hours workers. The details are still being worked through and there are important questions to be answered to ensure changes are reasonable and workable, particularly for smaller businesses.
As expected, part of the emerging plans aims to strengthen the voice and positioning of the trade unions. These have also raised questions and require careful consultation. Establishing better tri-partite relations between government, business, and unions is a stated goal and we can all learn from where these ‘social partnerships’ have been defined in large employers such as the NHS, places like Wales under their Labour government in recent years, and in countries such as Singapore.
Changes will be phased in over the next couple of years and there’s still a lot more detail and planning to come. The Government is keen to emphasise being ‘pro-worker and pro-business’ to support opportunity, growth and productivity. Ongoing consultation with business and unions will be key to achieving this, and we’ll support you with resources and share insights and more detail as it emerges.
