“The Bill relies on litigation rather than negotiation. But the reality is that many of its rights will not be enforced. Collective bargaining is the answer to the current crisis.”
By John Hendy
The Employment Rights Bill is nearly an Act. It only remains for the government to use its majority in the House of Commons to defeat the Tory and Lib-Dem amendments made to the Bill in the Lords.
Once enacted, however, only a few provisions of the Bill will be implemented immediately. The government’s ‘roadmap’ shows that various provisions of the Bill will be rolled out gradually from royal assent into 2027. Many aspects of the Bill are subject to consultations over coming months and a multitude of sets of regulations are required in relation to these and other parts of the Bill. The business lobby will continue to seek to water down the Bill’s provisions and the unions will have to keep the pressure on.
The Campaign for Trade Union Freedom and a number of unions are calling for a second Employment Rights Bill. This may sound a far-fetched demand but one of the promised consultations is over the legal status of workers. This will necessitate a second Bill to put its proposals into legislative effect.
Apart from the outstanding issue of the status of workers, the current Bill fails to address the fundamental problem of increasing inequality of power at the workplace. The imbalance of power between workers and employers, inherent in capitalism, has exponentially increased since the Thatcher revolution in the 1980s, which aimed at freeing the ‘labour market’ from the ‘distortions’ caused by trade unions, collective bargaining, and pro-worker legislation.
This objective was unleashed through seven Acts of Parliament between 1982 and 1992 which undermined and emasculated trade union ability to defend workers. The dramatic effect is told by the figures:
In 1979, trade union membership stood at about 13.2 million in a workforce of about 24 million. Now, membership stands at 6.7 million in a workforce of about 34 million.
In 1979, collective agreements and wages council orders covered about 20 million of the 24 million workforce. Now collective agreements (wages councils having been almost wholly abolished) are estimated by the government to cover about 9 million out of 34 million workers (a figure believed to be inflated).
The consequential loss of power has led to the stagnant real value of wages, inequality of income unmatched for a hundred years, a growing and unregulated platform economy, widespread job and income insecurity, the intensification of work, unacceptable levels of stress at work, and abusive and dictatorial management.
To address these problems the Labour Party proposed in 2021 A New Deal for Working People, a commitment radically to reform British labour law. The Bill, however, is a pale shadow of the New Deal and fails to address the power imbalance imposed by the Thatcher legislation.
A second Bill is therefore needed to deal with the omissions from the current Bill and to tighten the loopholes in the rights that the current Bill does confer, welcome though they are.
The current Bill fails to deliver on a principal provision of A New Deal for Working People,: the commitment to restore multi-employer collective bargaining across each industrial sector in order to ‘[reverse] the decades long decline in collective bargaining coverage’.
Under the New Deal collective bargaining would have been rolled out across each sector of the economy, leading to the negotiation of collective agreements establishing minimum terms and conditions of employment ‘binding on all employers and workers in the sector’ concerned. This was rightly seen to be the ‘key to tackling the problems of insecurity, inequality, discrimination, enforcement, [and] low pay’, to ensure everyone gets ‘their fair share’.
Before the 1980s, sectoral collective bargaining was the principal means by which working conditions were determined in what was said by Clement Attlee to be ‘a system of collective bargaining without parallel in the world’. Disputes, individual and collective, were resolved principally by negotiation not, as projected by the Bill, by litigation. Terms and conditions were negotiated instead of being determined by employers unilaterally. It was an efficient and comprehensive system.
The Employment Rights Bill does not contain a mechanism for re-establishing sectoral bargaining. True, it plans for a Social Care Negotiating Body and a restored School Support Staff Negotiating Body. But Bill does not provide for the creation of other such bodies and these two do not amount to proper collective bargaining. Instead, the government determines the composition of the negotiating bodies, the financial envelope within which they operate, and has power to impose any outcome it wishes – whether or not the parties have reached an agreement.
The other stark omission in the current Bill is fulfilment of the commitment in A New Deal that the ‘laws regulating industrial action should ensure that UK law complies in every respect with the international obligations ratified by the UK.’ This is crucial because a significant body of the restraints on the right to strike imposed in the period 1982-92 has been held by the international supervisory bodies to be in breach of international laws ratified by the UK.
True, the Bill repeals the Strikes (Minimum Service Levels) Act 2023 and most of the Trade Union Act 2016, all condemned by the international bodies. But the Bill fails to address other restrictions, the most prominent being the ban on solidarity action, held, on multiple occasions since 1988, to violate the European Social Charter, and ILO Convention 87. Following the P&O Ferries case, the the ILO in 2023 and 2024 called on the government to engage with employers and unions to resolve ‘the legislative prohibition on sympathy strikes, in conformity with freedom of association’. So far this has been met with total inaction.
When amendments were moved to the Bill to achieve compliance, the government had the effrontery to claim that it was not in breach of its international obligations. The UK violations are not matters of opinion but findings by the relevant Committees appointed under the relevant treaties. Non-compliance with these findings violates the Rule of Law.
There are also a number of rights in the current Bill which need tightening up, notably in relation to zero hour contracts and fire and rehire. On trade union access there is no power to obtain an injunction to compel an employer to comply with an access order. On recognition the rules on unfair practices need tightening and the 3 year moratorium on making a second application if the first fails needs shortening. There are many other examples.
The Bill relies on litigation rather than negotiation. But the reality is that many of its rights will not be enforced. Collective bargaining is the answer to the current crisis, backed by a meaningful right to strike to counter employer power. The Bill does not deal with the question of employment status and bogus self-employment with the result that millions of workers will still be denied basic employment rights. Clearly a second Bill is needed.
- John Hendy is a Labour member of the House of Lords and Chair of the Institute for Employment Rights and Vice-President of the Campaign for Trade Union Freedom.
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