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UK government warned 'little appetite' for ditching workers' rights as MPs vote

Tom Belger
·Finance and policy reporter
·8-min read
A EU flag hangs beside the Union Jack at the Europa House in London, Wednesday, Feb. 17, 2016. Britain's Prime Minister David Cameron will attend a EU summit starting tomorrow. (AP Photo/Frank Augstein)
The UK government has rejected claims it plans to review EU employment rights. Photo: AP Photo/Frank Augstein.

The Conservatives have been warned there is “little appetite” among voters they won over at the last election for de-regulating employment rights in the UK.

Labour will force a non-binding vote on the issue in the Commons on Monday, urging MPs to show their backing for current worker protections derived from EU law.

Ministers have repeatedly denied plans to lower EU standards, but officials reportedly floated scrapping rules on working hours, rest breaks and holiday pay earlier this month.

Britain’s most senior trade union leader, the government’s own jobs tsar and employment lawyers all told Yahoo Finance UK of their concerns about the government’s commitment to upholding workplace standards.

Public opinion on EU rights

A survey for the Trades Union Congress (TUC) after the 2019 election found four in five Labour-turned-Conservative voters said EU-based rights should be protected and enhanced.

The same proportion backed new rights for gig economy workers and a £10 ($13.68) minimum wage.

“There is little appetite among voters for ripping up our EU-derived workplace rights,” said Frances O’Grady, the TUC’s general secretary.

“Working-class people rely on their precious paid holiday, and safety measures like rest breaks and limits on working time.

WATCH: What could scrapping EU labour rights mean for workers?

“The prime minister promised to make Britain the best place in the world to work. Rather than threatening hard-won rights, the prime minister must make good on his promise to voters.”

Another TUC poll published on Monday suggests a deterioration in workers’ terms and conditions since the pandemic struck. Almost a quarter said their terms had been downgraded, including lower pay or hours, and one in 10 reported being told to re-apply for their job on inferior terms.

O’Grady said fire-and-re-hire tactics had “no place in modern Britain.”

Richard Arthur, head of trade union law at social justice law firm Thompsons Solicitors, said removing EU protections would affect key workers, Leave voters and those who backed the Conservatives in the so-called “Red Wall” of former Labour seats.

“However people voted, they still want workers’ rights protected and enhanced,” he said.

Less strict rules on overtime, rest breaks and logging hours, as well as less generous holiday pay, may prove more popular among managers and business owners, however. The working time directive proved controversial when it was introduced in the early 1990s, though criticism of EU legislation has been fairly limited in recent years.

Few business leaders have spoken out in favour of slashing EU rules since reports first surfaced of the government’s plans.

‘Fairly minor’ reforms likely

Labour is seeking to keep the issue on the agenda this week by forcing a debate in the Commons, and highlighting the impact on key workers in op-eds for national newspapers.

While it suits the opposition to suggest wide-scale de-regulation is imminent, sensing a weak spot for the Conservatives, the reality could be less clear-cut.

Some experts believe there will be reforms to EU legislation, but less radically than Labour and trade unions suggest.

Matthew Taylor, author of a review into insecure work and a sometimes outspoken government advisor on employment, said any reforms would like be “fairly minor.”

Philip Henson, head of employment at EBL Miller Rosenfalck, agreed anticipation of a “massive bonfire” of EU rules was likely misplaced, and concrete changes may only end up being “tinkering.”

READ MORE: What are the EU labour reforms the government could scrap?

If ministers intend to stay true to their word, they have left themselves only limited wiggle room for reforms. Not only business secretary Kwasi Kwarteng but the prime minister Boris Johnson have both repeatedly denied workers’ rights will be watered down.

A government spokesperson denied reports a review of employment rights had been commissioned at all, and told Yahoo Finance UK: “There will be no reduction in workers’ rights and the new business secretary has reiterated this multiple times.

“The UK has one of the best workers’ rights records in the world, including generous holiday pay and high standards for workplace safety – these were never dependent on our membership of the EU and it is well known that the UK goes further than the EU in many areas.”

Signal to boost investment

Prime Minister Boris Johnson signs a copy of The Northern Echo for a supporter during a visit to see newly elected Conservative party MP for Sedgefield, Paul Howell during a visit to Sedgefield Cricket Club in County Durham.
Prime Minister Boris Johnson during a visit with newly elected Conservative party MP for Sedgefield in 2019. De-regulating employment could threaten election gains in areas like Tony Blair's former seat. Photo: PA.

Many Conservative ministers and newly elected MPs in hard-fought, ex-Labour seats may not welcome being painted as a threat to the rights of workers, particularly key workers.

Yet the party and government may see more to gain from such controversy than it first seems.

The leaked proposals and any subsequent reforms may be primarily intended as a symbolic gesture, according to Henson. It could be part of a bid to paint post-Brexit Britain as a business-friendly “Singapore on Thames” and attract investment, he said.

“There are several audiences to whom they’re speaking. The base, Europe, and potential investors, most likely the US. I could see how that could play to that audience.”

While EU reforms may prove limited, Henson said they could be wrapped up in a wider package of reforms to UK-based employment and other business rules.

“I think this is the start of something much bigger, where the UK government can say it’s opening up the economy, making it more competitive.”

The UK government could then signal a break from Brussels, but lower the risk of EU retaliation under the terms of the Brexit deal. The agreement does not allow Britain to diverge from EU standards if the changes give it a trade or investment advantage.

Controversial ideas floating around government

Officials stress any reforms would not be at the expense of employment rights, but say the government is looking at how to stimulate business growth, innovation and job creation.

Henson speculated that a wider package of measures could still be substantial despite such pledges, noting some of the ideas floating around government over the past decade.

Reforms would build on an existing government plan to reform non-compete clauses, in a bid to boost entrepreneurship.

More significantly, Kwarteng himself co-authored a radical pamphlet in 2013, which called for new startups to be exempted from all employment legislation and business taxes.

Meanwhile a government-commissioned review in 2012 proposed making it easier to fire staff without reason, as long as they pay a compensatory sum as with redundancy. The Beecroft review also proposed allowing small firms to opt out of employment rules, from unfair dismissal to pension auto-enrolment to flexible working and flexible parental leave.

Henson called the ideas “bizarre” and likely to spark “uproar from people like me,” but said they could well be considered if his intuitions were correct.

He also expects fees for employees bringing tribunal claims against employers — introduced in 2013, before being declared unlawful in 2017 — to be reintroduced, but a lower level.

In Henson’s view, areas of EU law that could see “tinkering” include not only working hours, breaks and holiday pay, but also some areas of discrmination law and protections for workers when their organisations change hands.

“There have been a couple of bugbears for big business for a long time,” said Henson.

The “TUPE” rules include employees being automatically transferred to a new owner. “The fear is there’d be a cherry-picking of people if auto-transfer didn’t apply,” he said.

Slow progress on plans to boost rights

Britain's Prime Minister Theresa May (R) arrives with RSA Chief Executive Matthew Taylor (L) to deliver a speech on modern working practices at the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) in London, on July 11, 2017. A weakened Theresa May came under fresh pressure Tuesday to soften her Brexit position, adding to uncertainty about her negotiating strategy with Brussels one year after she became Britain's leader. / AFP PHOTO / POOL / Matt Dunham        (Photo credit should read MATT DUNHAM/AFP via Getty Images)
Matthew Taylor, left, with former prime minister Theresa May, after his Good Work review in 2017. Photo: MATT DUNHAM/AFP via Getty Images.

Such proposals could be welcomed by some employers, investors and Conservatives, but it remains to be seen if the government is in fact as keen on de-regulation as Henson suggests.

It could face a backlash not only from Conservative MPs representing former Labour seats, as well as unions and Labour. Just as significantly, prime minister Boris Johnson’s administration also inherited plans to significantly upgrade, rather than lower, employment rights in many areas.

Former prime minister Theresa May commissioned Matthew Taylor to carry out a review of insecure work and the gig economy in 2017. The government accepted 51 of the “Good Work” review’s 53 recommendations, and has promised the “largest upgrade in workers’ rights in a generation.”

Several reforms have passed into law, including the right to a payslip and statement of rights and equal pay for agency workers. The Conservatives’ 2019 manifesto pledged to “build on existing employment law with measures that protect those in low-paid work and the gig economy.”

But most of the proposals are still not on the statute book. The government has been accused of being “far too slow” with reforms, with a long-promised employment bill yet to reach parliament.

A government spokesperson highlighted some of the plans, including merging several organisations into one labour enforcement watchdog. But even Taylor appears concerned about progress.

Taylor’s term as the government’s labour market enforcement tsar is also due to end in a few days’ time, with no sign yet of a replacement.

He told Yahoo Finance UK: “I think the issue of what will probably be some fairly minor shifts to EU regulation is not as important as the government demonstrating it remains committed to the Good Work agenda—which covers a much wider set of issues including employment status, protection for zero-hours workers and the single enforcement body.”