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Employment rights

One of the arguments used in the Brexit debate is that the EU has provided employment rights.

Had Theresa May brought back her withdrawal agreement for a fourth time, as she had planned, it would have included provisions to match employment rights subsequently adopted by the EU.

There are two points to note about all this.

First, the UK is capable of introducing its own employment laws without requiring another body to do it.

Consider these fundamental employment rights:

  • right to a written contract of employment
  • right not to have deductions from pay without unauthorised deductions
  • right to be paid in legal tender and not in tokens
  • notice periods for dismissal
  • right to be consulted on redundancies and offered other work if possible
  • redundancy pay
  • equal pay for women
  • protection from unfair dismissal
  • protection from wrongful dismissal
  • right to defend oneself before being dismissed
  • protection from racial discrimination
  • right to join a trade union
  • right to a paid holiday
  • ban on child labour, with very few exceptions
  • protection at work for pregnant and breastfeeding workers
  • unemployment benefit.

Every one of these rights was established before the UK joined the predecessor bodies to the EU in 1973. British workers had these rights when many other European citizens were under the yoke of Communism or military dictatorship.

In 2019, the government introduced new laws requiring all workers, not just employees, to be given a payslip. It also required hourly-paid workers to be told how many hours they have worked. The government announced plans to introduce leave and pay for bereaved workers who lose a child. None of these new employment rights are required by the EU.

Even when the UK does enact EU law, it often upgrades them. EU law requires workers to have 20 days’ paid holiday. English law requires 28 days.

The second point is the criticism that employment rights are seen as burdens on business. The problem is that such rights can be a burden.

For one person to have the right to receive a benefit, another person must have a duty to provide it.

To some extent the UK/EU discussion reflects the different traditions of how employment is seen. The UK sees employment as a contractual arrangement: an employee sells his labour in the same way that a grocer sells baked beans. The EU see employment more as a relationship where the employer must take on responsibilities for the worker as part of the price of being able to be in business. Both traditions have some validity. The point to note is that the European tradition does not always sit well with British tradition.

An employer could ask why he should pay an employee who has not provided labour when he would not pay a grocer who has not provided groceries. (In fact, very few employers do say this, at least not too loudly.)

The employee, quite reasonably, wants a regular assured income, and protection if prevented from working by illness, childbirth, redundancy or other good reason.

This conflict has an obvious solution – insurance. The employer and employee contribute to a fund which supports the employee during a time of need. And this is exactly what national insurance was intended to do, hence the name.

But what has happened is that the “insurance” demands have increased more than the “premiums” (actually called contributions) to fund them. So the shortfall has fallen on employers. When redundancy pay and statutory sick pay were introduced, the employer paid it and reclaimed from the state. In both cases that reclaim has been whittled away and now the whole cost falls on the employer.

It is noticeable that good employers generally meet their obligations without complaint. Many go further and offer additional employment rights, such as more holiday, greater sick pay, employment assistance programmes, compassionate leave and similar. This is not charity. Good employers recognise that treating staff well is good for business. It leads to less absenteeism, higher productivity and lower staff turnover.

My two conclusions from all this are:

  1. Whatever other reasons are advance for or against Brexit, protection of employment rights is not one of them. Britain has a good record in employment law.
  2. Employment rights are generally not a problem for business, but in a time of international competition, it must not be assumed that more and more employment rights can be imposed at employers’ expense before the UK becomes internationally uncompetitive.

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