Ben Willmott talks about why UK Government plans for a new code of practice to ensure employers consult with workers when changing employment conditions will fail to stop unfair treatment, as press reports suggest the long-awaited Employment Bill is to be further delayed
UK Government plans for a new statutory code of practice to try and ensure employers consult with staff when making changes to employment conditions are unlikely to be sufficient to protect workers from unfair treatment. This is particularly the case if it turns out that press reports, first in the Financial Times and subsequently The Guardian, that the Employment Bill is to be dropped from the forthcoming Queen’s Speech, are accurate.
The creation of a new Single Enforcement Body, announced in June 2021, to try and improve labour market enforcement in the UK was due to be a key element of the bill but the future of the new body currently looks uncertain.Plans for the new statutory code were announced by Labour Markets minister Paul Scully last month, following P&O Ferries’ on-the-spot sacking of 800 workers over video-link without consultation. The new Statutory Code of Practice would ‘set out how businesses must hold fair, transparent and meaningful consultations on proposed changes to employment terms’.The code is also supposed to prevent employers from engaging in ‘fire and rehire’ practices when an employer dismisses a worker and rehires them on new, less-favourable terms. A court or Employment Tribunal would take the code into account when considering relevant cases, including unfair dismissal, it is proposed. The Government has said that courts would have the power to apply an uplift of up to 25% of an employee’s compensation if an employer unreasonably fails to comply with the Code where it applies.
It is debatable though whether a 25% uplift to workers’ compensation would be sufficient to deter another company from acting like P&O Ferries in the future. After all, it is reported all but one employee accepted the firm’s compensation offer, as the company’s decision to set aside £36.5m to compensate sacked seafarers rather than abide by a lengthy consultation seems to have worked.To really deter firms from acting like P&O Ferries, tribunals would need the power to make unlimited compensation awards where companies have failed to meaningfully consult with staff when making redundancies. Besides the new code, Grant Shapps, the Transport Secretary, has stated that HM Revenue & Customs will ensure that ferry operators are paying the national minimum wage “where they should be”. The Government has also said it will explore with ‘like-minded countries’ whether ‘minimum wage corridors’ can be established to ensure seafarers are paid an agreed minimum wage.
However, more broadly there is a real need to improve the enforcement of employment rights across the labour market on a whole range of issues including the National Minimum Wage/National Living Wage, employment status, combatting discrimination and ensuring workers’ rights to a healthy and safe workplace are met. CIPD research highlights why currently both the individual enforcement of employment rights through the tribunal system and the state-based enforcement system are both inadequate. This is why there is an urgent need to improve the current system, with the proposals for a Single Enforcement Body potentially a real step forward, providing of course it were to be properly resourced. It would be a huge missed opportunity for Government to progress on its pledge to make Britain the best place in the world to work and protect and enhance workers’ rights if the Employment Bill and its key measures were omitted from next month’s Queen’s Speech.
Browse our A–Z catalogue of information, guidance and resources covering all aspects of people practice.
Discover our practice guidance and recommendations to tackle bullying and harassment in the workplace.
Ben leads the CIPD’s Public Policy team, which works to inform and shape debate, government policy and legislation in order to enable higher performance at work and better pathways into work for those seeking employment. His particular research and policy areas of interest include employment relations, employee engagement and wellbeing, absence and stress management, and leadership and management capability.
Read our latest Labour Market Outlook report for analysis on employers’ recruitment, redundancy and pay intentions
Recent data on employees' contrasting views on these contracts gives insight into how best to approach reforms.
The Good Jobs Employment Rights Bill seeks to give new protections for those living and working in Northern Ireland
Explore our collection of resources covering terms and conditions of employment, including Q&As and relevant case law
How can L&D teams create value and impact and improve performance through focusing on skills development?
Recent data on employees' contrasting views on these contracts gives insight into how best to approach reforms.
Monthly round-up of changes in employment law in the UK
The Good Jobs Employment Rights Bill seeks to give new protections for those living and working in Northern Ireland