Government attempting to boost the economy: at the price of employees?

During the past year the Coalition Government has taken several steps to boost the economy by introducing new labour market reforms. This week it emerged that there are those in Whitehall who advocate for further radical measures, hoping that this would encourage economic growth.

The Government has justified the reforms as combating unemployment, but this desired outcome is not reflected in recent numbers. Rather, new figures indicate that unemployment has increased significantly. The official numbers show that unemployment rose by 114,000 between June and August 2011, to 2.57 million.

As a result, the Government’s employment law reforms are being questioned increasingly. Ed Miliband, the opposition leader, said "A year ago ... the prime minister justified his economic policy by saying unemployment would fall this year, next year and the year after. Isn't it time he admitted his plan isn't working?"

Despite accusations of the measures being unsuccessful, the Prime Minster, David Cameron, remains convinced that his Government will be able to reduce the deficit.

This week, an unofficial report emerged from Downing Street, which advocated further significant measures. The report was prepared by Adrian Beecroft, a Conservative donor. In it, he claimed that unfair dismissal laws should be scrapped completely. He considers that although this would lead to greater insecurity among employees, it was a price worth paying for economic growth.

However, the unofficial proposal has been heavily criticised by many cross-party members, including Vince Cable, the Business Secretary. Cable said, "No evidence has been advanced that I have seen that it will improve labour market flexibility in general, or have any beneficial effect, but if anyone can produce any, we will look at it."

The Shadow Business Secretary, Chuka Umunna, thought that the leaked report showed that the Government did not have the right focus. She said, "I find it absolutely extraordinary that the government should be preoccupying itself with how it can make it easier to fire people when in that context it should be looking at how it can make it easier to hire people."

On the other hand, business advocates consider that the report’s suggestions, if implemented, would have positive outcomes. For instance, Simon Walker, Director General of the Institute of Directors, said "The IoD strongly supports radical change to employee dismissal processes and fully backs 'Compensated No Fault Dismissal' as part of a solution. Ministers would do well to act upon Mr Beecroft's suggestions, freeing up wasted time and money from litigation and ensuring it is instead channelled into job creation and business growth."

The Government is being increasingly pressured to find a solution to the UK’s financial crisis, particularly as it is being less and less attributed to the eurozone tumult. Whether increased insecurity is the solution to the problems is being increasingly questioned as the economy remains in a fragile state.

More on this story:

http://www.guardian.co.uk/politics/2011/oct/26/vince-cable-unfair-dismissal-laws
http://www.bbc.co.uk/news/business-15271800

Have you been affected by any of these issues?

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New month, new employment laws

The month of October 2011 has brought with it some important changes to employment law in the UK. Employers and employees should both be aware of these changes, so they can ensure they are up-to-date on their rights and responsibilities in the workplace.

Firstly, the Agency Workers Directive (AWD) came into force on 1 October giving agency workers more rights in the workplace.

The AWD confers certain rights to those workers who have a contract with a temporary workers agency and get sent to different employers on assignment. Temporary workers who are hired directly by their employer or through an employment agency (with whom they do not have a contract or continuing relationship after they have been hired) are not included under the AWD.

So what new rights will agency workers have under the new law? From their first day with their new employer they will be able to access all the facilities that are open and available to normal permanent employees, such as staff canteens, gyms, and childcare facilities. In addition, they will also be entitled to access job opportunities with that employer in the same way as permanent staff.

After an agency worker has been on their assignment for 12 weeks, they will be entitled to the same basic rights and working conditions as their permanent counterparts. These rights include the right to paid time off for antenatal appointments and the right to be paid the same wage.

It will be up to both the agency and the employer to ensure that temporary agency workers are being treated in accordance with the new AWD.

Secondly, 30 September saw the last time an employee could be forced to retire by an employer under the default retirement age. Although technically abolished on 6 April 2011, employers could see through a forced retirement that was already in motion, so long as the employee in question turned 65 (or the normal age of retirement within that company if higher)on or before 30 September.

The abolition of the default retirement age means that if an employer wants to retire employees at a set age, they will need to have a good reason to do so. Under employment law, a good reason to do so is known as an ‘objective justification’.

Finally, the minimum wage saw an increase of 15p from £5.93 to £6.08 per hour. The youth rate increased from £4.92 to £4.98, and the rate for workers aged 16 and 17 increased from £3.64 to £3.68. The rate for apprentices also increased, from £2.50 to £2.60.

If you would like any legal advice on October’s changes to employment law, call Job Justice today. We work with local, recommended employment law solicitors throughout the UK.