This is the third post I have written in response to the Government’s consultation over recommendations made in the Review of Modern Employment - The Review, which I chaired, was launched in the summer of 2017.
My first blog made the case for a higher minimum wage for non-guaranteed hours while the second offered a way of responding to the complex issue of employment status. This time I am tackling some of the issues raised in the Government’s paper entitled ‘Consultation on measures to increase transparency in the UK labour market’.
Towards the end of this post I will offer some thoughts about the proposal to give workers the right to request permanent contracts, but first I’ll focus on what, for me, has from early on in the process been one the most important recommendations: measures to promote worker engagement.
The route to employee engagement
Section E of the consultation document cites the following recommendation from my report:
The Government should examine the effectiveness of the Information and Consultation Regulations (ICE) in improving employee engagement in the workplace. In particular it should extend the Regulation to include employee and workers and reduce the threshold for implementation from 10% to 2% of the workforce making the request.
There are two questions here; should the threshold be lowered and, if it so, are the ICE arrangements the most effective way to secure employee engagement?
But first, what about the principle that employee engagement should be undergirded by a right for employees (including casual workers) to have access to information and consultation? In essence this provision means that employers would need to set up some kind of joint consultative committee with workers able to elect their representatives. There are, I believe, three arguments for this principle; the pragmatic, the philosophical, and the political.
The pragmatic argument derives from the growing (although rather diffuse) evidence that effective employee engagement can be an important part of improving organisational performance and could help address the UK’s knotty problem of poor productivity. This isn’t an argument that comes exclusively from trade unions or progressives. It is also supported by many business leaders themselves, indeed it is a cornerstone of the method being used by the Be the Business initiative set up by the Government to boost productivity.
The issue here is about legal enforcement. Employee engagement can take many forms and many businesses which say they support it would prefer a kind of enlightened HR policy to giving workers’ rights, albeit the very soft ones encoded in ICE. Yet an important point about the credibility of engagement is that companies can’t just do it when it suits them. Indeed, we have seen impressive examples of engagement in firms where employees agreed to a general cut in hours rather than seeing colleagues being laid off. Furthermore, if engagement is good we need not just rely on employer beneficence. Indeed, ICE provides ways for workers to make engagement happen in those firms where bosses remain sceptical or stubborn.
The philosophical argument starts from the discontinuity between how we tend to talk about people as citizens, on the one hand, and workers on the other. In the former we largely take it for granted that we want people to be active and engaged, that they should be listened to and respected, indeed that they should ‘take back control’. Yet, when it comes to work, a master and servant view still persists. The assumption here is that the employment contract implicitly exchanges the wages paid by the boss for the dumb acquiescence of the worker.
But if we believe that people should be respected and listened to as citizens it is difficult to see why we would want to abandon that idea in relation to the single activity that takes up the largest part of most people’s lives. Furthermore, if we want to inculcate in people an active, democratic mind set wouldn’t we want the workplace to exercise and develop these capabilities rather than stunt them?
The political reason lies with the Conservatives. One of the ideas floated by Theresa May both just before and soon after she become Prime Minister was mandating a place for workers on company boards. This was intended to underline her commitment to run a Government on the side of all people and not just the privileged and it also spoke to the communitarian critique of neo-liberalism articulated by her chief policy advisor, Nick Timothy. However, that idea has now been side-lined. Were the Government to reject my modest proposal on ICE it would have to explain not just the abandonment of the specific policy of workers on boards but of the whole principle of greater partnership at work.
What of the proposal itself? The take up of ICE has been very limited since it was introduced in 2005. Some people take this to mean that it is ineffective and there is nothing to be gained by applying it more generally. My view is that take up figures are much more about the unreasonable threshold for workers to be able to require it, namely that the request must be made by a minimum of 15 employees or 10% of workers (up to a limit of 2,500), whichever of the two is greater. Not only does this figure apply to the whole undertaking and not just the specific workplace, but crucially the threshold is the same as for trade union recognition. Why would workers wanting a stronger voice, or unions wanting to help them gain one, aim for information and consultation rights when for the same effort they could get full union recognition?
By lowering the threshold to 2% of employees (and extending the right to casual workers) there is a good chance that two things might happen. First, information and consultation could move from being a largely unknown exception in a small number of firms already supportive of engagement to being the accepted norm in all medium sized and large companies, as it is in most parts of Europe. Second, trade unions would have the incentive to support workers in reaching the ICE threshold. Unions have the resources and skills to help workers use their new rights effectively and they could seek to use the ICE provisions as a stepping stone to union recognition and collective bargaining.
The right to request
The document cites two recommendations from my report:
The Government should introduce a right to request a direct contract of employment for agency workers who have been placed with the same hirer for 12 months and an obligation on the hirer to consider the request in a reasonable manner
The Government should act to create a right to request a contract that guarantees hours for those on zero hours contracts who have been in post for 12 months which better reflects the hours worked
Interestingly, in asking for views about these recommendations the consultation document implies that the right to request could apply not just to agency workers and those on zero hours contracts but that it could be a general provision for temporary and low hours workers who find themselves working for the same employer for a year and/or consistently working more hours than those specified in the contract. I support this and was pleased to read the following sentence:
‘We accept the principle of individuals having the right to request a more predictable and stable contract and this consultation seeks information on how best to implement this’
As with many of my recommendations, there are critics on both sides. But while those who oppose the right to request as being “too interfering” have been pretty muted, those who see it as too weak include serious people, like the folks at the Resolution Foundation. I defend my Review proposal on the grounds that the evidence from other flexible working provisions is that what might be called ‘enhanced voluntarism’ can have a real impact both on what happens at work and how we think of good practice. Also, the alternative of a mandatory right to a permanent contract or fixed hours might either have jeopardised forms of work with which many people are perfectly happy, or created strong incentive for gaming (whereby, for example, agency workers would be laid off after 51 weeks). But it is important that a right to request is implemented robustly. I have two suggestions.
First, companies (above a certain size threshold) should have to publish in their annual report how many requests they have had and how many they have acceded to. Companies that unreasonably refuse such requests will then have to reckon with the reputational impact, particularly when the date enables comparisons between employers to be made. Second, employers (including agencies) should be required to notify workers if they have reached the twelve month trigger. This is relatively straightforward for the one year point, although the government will presumably need to define how many days or weeks in the year will have to have been worked for it to qualify as a year’s continuous employment. The issue is more complex for hours especially if the right is extended from zero hours to anyone who consistently works more than their contracted period (many employers hire people on one or two hour a week contracts but effectively require them to work for many more).
My suggestion is that anyone passing the 12 month threshold should be supplied by the employer with a statement of how many hours per week they have worked on average across the 12 months and should be entitled to request a permanent contract of no fewer hours than that average. Given this is not mandatory but a right to request there should be no reason why, after 12 months, someone can’t request more than the average hours they have worked.
I have been frequently asked what I think of the Government’s response to my report. My answer is ‘four out of ten, so far’. Ministers’ pledge to measuring and reporting on good work and the small changes already committed to are worthwhile and at least guarantee that the Review won’t have been futile. But getting this four to seven or eight (which would be very high for an independent review) depends on how the Government responds to the several consultations now taking place.
Extending rights to information and consultation in British workplaces won’t be revolutionary. It would still leave us well short of anything that could be meaningfully termed industrial democracy. But it would be an important statement about the kind of country we want to be, the kind of relations we want at work and the route we want to take to better work and more productive workplaces.
If you agree you have until May 23rd to tell the Government so.