A New Deal for Workers

After decades of attacks on workers' rights, Britain needs a government prepared to take bold action to reset industrial relations.

Britain is changing rapidly. Whether it is technological advancements, an ageing population, or the decision to leave the EU, the need for our economy to adapt to new challenges is now beyond question, regardless of our personal political persuasions or beliefs.

Such challenges are often framed as threats (and not without justification), but they can just as reasonably be viewed as opportunities to create a fairer, more equal society. It is the job of the Left to own the narrative on how a new deal for workers should look, or risk — as the International Labour Organisation’s (ILO) Global Commission on the Future of Work recently put it — ‘sleepwalking into a world that widens existing inequalities and uncertainties’.

This commission — co-chaired by Swedish Prime Minister Stefan Löfven and President of South Africa Cyril Ramaphosa — was established to help members protect their citizens from the potential disruption to their employment (and their rights in employment) in the face of global shifts, such as increased automation and climate change. On publishing its final report in January 2019, it called for a ‘collective global response’.

Central to its proposals was a call for nations to promote the implementation of collective bargaining structures, rather than pitching citizens into a dog-eat-dog race for survival in trying times. As the commission argued: ‘These are collective challenges; they demand collective responses. Social dialogue and collective bargaining play a key role in building resilience and adaptation.’

A Collective Future

The recent recommendations the Institute of Employment Rights made in our Manifesto for Labour Law have proven influential in both political and industrial circles, most notably in their adoption by the Labour Party and their inclusion in its 2017 manifesto. We have been delighted to contribute to the party’s labour law strategy — a programme of reforms that we believe has the power to create modern workplaces that benefit everyone in our economy, and are responsive to a changing world.

The overarching aim of our proposals is to shift the focus of employment law from one based on statutory individual rights to one based on collective rights. Basing labour law on collective rights is not new — such a system contributed to economic development in the post-war period, and continues to be the norm across Europe as well as many other comparative economies to this day. Britain’s soaring inequality has its root in the dismantling of this system by Thatcher’s government in the 1980s and early 1990s, when the onus on protecting workers’ rights was transferred from the collective to the individual.

The unreasonable expectation that each individual worker would have an understanding and awareness of what was to become a very complex set of rights, as well as the ability and motivation to police them through litigation, has led to many breaches of labour law going unenforced.

In such circumstances, the vast majority of employment contracts are now made and imposed unilaterally by the employer, with workers being told to ‘take or leave’ inadequate terms and conditions and — due to a race to the bottom among employers — are usually unable to find a better deal elsewhere.

A significant proportion of the UK’s thirty-one million workers now find themselves employed in a practically lawless ‘Wild West’, exemplified by gig economy employers such as Uber, and the agency-staffed warehouses of Amazon and Sports Direct, the latter of which was compared to a ‘Victorian workhouse’ by a parliamentary inquiry.

Necessary Reforms

To redress this imbalance, workers must be provided with effective means to have their voices heard, not only in the workplace but at all levels of the economy. This begins with representation in government, as Keir Hardie demanded over a hundred years ago. This should be achieved through the establishment of a ministry of labour, headed by a secretary of state with a seat at the cabinet table. This new department would set up a national economic forum, bringing together representatives of employers, workers, and others to plan for future industrial prosperity and scrutinise the impact of proposed policy on different sections of society.

Economic democracy must also be expanded through the reinstatement of sectoral collective bargaining. This can be achieved through the establishment of national joint councils, on which an equal number of employers’ and workers’ representatives sit, joined by government nominees where necessary. Sectoral collective bargaining has proven not only to be the most effective way to raise wages and conditions across the economy, but it has an important strategic function too. As the Global Commission for the Future of Work put it: ‘Tripartite social dialogue allows opportunity for the partners to the social contract to consider the broader societal issues that change brings and to guide policy responses.’

But none of this will be enough without changes in the business landscape. This means giving workers the right to be represented by their union in all matters pertaining to work; enabling unions to apply for recognition wherever at least 10 per cent of the workforce are members; guaranteeing workers a minimum of two seats on company boards; providing for workers’ representatives to have at least half the seats on pension fund boards; and offering workers the right to vote at company meetings.

These arrangements should be underpinned by strengthened rights for workers: the implementation of a Real Living Wage, better protection from discrimination and harassment in the workplace, and bringing parental rights up to international standards. Vitally, we must ensure everyone in employment is entitled to these rights, which means scrapping the distinction between ‘workers’ and ‘employees’ in favour of a universal employment status that covers everyone except for the genuinely self-employed.

Making it Matter

But, as has been proven with our current labour law framework, rights without enforcement and effective remedies are rights written in sand. It is essential that workers are unburdened of the onus to police their own workplace. Union representatives need adequate powers to investigate reports of non-adherence to collective agreements, and to tackle these in an appropriate way. In particular, health and safety representatives should have the power to stop jobs that present an immediate risk, and to issue enforcement notices for less urgent concerns.

For the most part, disputes should be resolved in-house through procedures agreed at a sectoral level to avoid unnecessary and costly litigation. But, where necessary, labour inspectors employed as part of an independent agency should have the power to bring breaches in front of the labour courts. This inspectorate should also have a role in scrutinising workplaces and the power to enforce the law, up to and including the reinstatement of unfairly dismissed workers.

Agencies that already exist to inspect and police certain aspects of the law, such as the Health and Safety Executive (HSE), must have their funding and powers returned to levels adequate to effectively conduct their duties. For the worst offenders, such as employers who maintain blacklists or those who routinely disrespect the law, we recommend the introduction of effective criminal sanctions with personal as well as corporate liability where appropriate.

As Britain’s economy faces into a tumultuous period, the Left now has the evidence base it needs to ensure that workers can look forward with confidence. In 2017, Labour committed to build a society for the many and not the few — this can only be done with a bold vision to decisively rebalance power towards those who work, and away from those who would diminish their pay, conditions, and rights.