More messing with employment rights

The coalition is proposing to charge workers up to £1,250 to take claims to employment tribunals and to prevent workers with less than two years’ service from making claims for unfair dismissal. In addition, a leaked report, commissioned by David Cameron, is proposing to make it easier for employers to dismiss workers without having to worry about tribunals at all.

In this report, venture capitalist Adrian Beechcroft makes the ridiculous claim that unfair dismissal rules are making it too difficult for employers to dismiss under-performing workers and that making it easier would encourage economic growth and “increase employment”.

His proposal is to introduce a new system where dismissal would “not be unfair if no particular reason is specified” provided the dismissed employee was given notice pay and compensation equivalent to statutory redundancy (one week’s pay per year’s service for most people). He calls this ‘quick fire’ system “compensated no fault dismissal” and any worker dispatched in this way would have no right to take a claim for unfair dismissal to tribunal.

He admits that the downside of this proposal is that “some people would be dismissed simply because their employer doesn’t like them” but he believes this would be “a price worth paying”.  He also points out that, as there is no EU legislation behind UK unfair dismissal law, it would be comparatively easy to make the necessary legislative changes.

It is not known whether the coalition will pick up this daft proposal but it is known that a large number of other proposals to weaken workers’ rights are also under consideration at the moment. These include proposals to reduce health and safety regulations (the Lofstedt Review), to reduce rights of workers in sickness absence situations, to reduce the redundancy consultation period and to ‘simplify’ the National Minimum Wage.

Another measure, which is not a proposal but established coalition policy and written into law, is a system for allowing employers to get out of giving equal pay to temporary/agency workers under the new Agency Workers Regulations. This system is called the Swedish Derogation Model and it is now being adopted by a range of major employers, including Tesco, Carlsberg and DHL. This little-known rule allows employers to reach agreement with employment agencies which result in the agency workers being taken on as employees by the agencies, thus making them ineligible for equal pay after 12 weeks in the company where they are working.

Employees and agencies have to comply with certain conditions before they can adopt this model but these conditions are hardly onerous:

  • the contract of employment with the agency must be in place before the agency worker’s first assignment with the company where they will be working,
  • the agency must agree to pay the workers with these employment contracts a ‘minimum amount’ when they are between assignments and
  • the agency must take reasonable steps to seek suitable further employment for the agency worker when their assignment ends and make sure it is offered to them.

However, the minimum amount that has to be paid is 50% of the worker’s average basic pay for the previous 12 weeks on assignment, provided that figure is at least of National Minimum Wage level. This differential is worse than the differential which currently exists between agency workers’ pay and pay in the companies where they are working (generally considered as around 30%). In addition, the agency can decide how many hours the agency worker is contracted for, provided it is greater than one hour a week! The ‘wage between assignments’ which is offered is therefore virtually meaningless.

Although agency workers who complete 12 weeks in  a particular role cannot be denied certain rights under the regulations (equal holidays with permanent employees etc), this model must be one of the most blatant mechanisms for undermining a piece of legislation improving workers’ rights that have ever been seen.

A Unite motion to this year’s TUC called for the model to be challenged in law but it must also be challenged in the workplace and union reps are encouraged to ensure that it is. Don’t let agency workers be done over in this way in your workplace.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.