Workers in the UK are the easiest to sack in Europe, according to a recent report by the trade and industry select committee into problems in the UK car industry.
And the report believes that allegations of how easily UK employees can be made redundant are serious enough to justify government investigation.
At the same time, the UK’s success in attracting foreign investment is also attributed to its ‘flexible workforce’. So how can workers be protected from multinationals taking the easy option — and dumping them when the global going gets tough — without deterring companies from investing in the UK?
Martin O’Neill, Labour MP and chairman of the trade and industry select committee, says a careful balancing act is needed. ‘One thing is certain, there is insufficient opportunity for workers in the UK to be informed and consulted, not only about redundancy matters, but also the general running of the business,’ he says.
Tales of Vauxhall workers hearing about their job losses over the radio last December seem to have shocked the government into action. Soon after Vauxhall said it would shut Luton, trade and industry secretary Stephen Byers announced a review of collective redundancy legislation in the UK. But he remained opposed to a draft EU directive on information and consultation, which would force companies to keep workers informed and offer consultation periods before large-scale redundancies.
Instead, O’Neill says, the government should pick the best of the European law to introduce into the UK.
The EU Information and Consultation Directive would give all European workers in firms with more than 50 staff the right to be consulted on major changes. The draft legislation, which was proposed by the European Commission in 1998, was designed to harmonise consultation rules across Europe. Under the directive, employers would have to consult workers on issues such as mergers, major reorganisation programmes and redundancies.
The UK claims that different corporate structures in Britain from those on mainland Europe make the legislation inappropriate, and that national governments should be left to determine their own redundancy laws.
The DTI is discussing the UK’s redundancy rules with the Trades Union Congress and the Confederation of British Industry. A decision is hoped for soon, says a DTI spokesman. ‘We are taking it very seriously and are in favour of information and consultation legislation at a national level, but we’re opposed to the EU directive, because it doesn’t address specifically British issues — one law for all European states is not the way to go.’
The CBI is also opposed to UK adoption of the EU directive, claiming its one-size-fits-all approach is inappropriate for the whole of Europe. Not surprisingly, the TUC supports the directive.
The issue had been due for debate by EU member states in early March, but was pushed back, leading to speculation that the UK government had pressurised the Swedish presidency to delay a vote until after the general election. There is unlikely to be a vote until after the Belgian government takes over the EU presidency in July.
Now that the German government seems to have changed its stance and is expected to back the draft legislation, the ‘no’ vote among European states looks likely to be confined only to the UK and Ireland.
A strong case
Whether the UK government is prepared to adopt the European model for consulting workers will be the biggest employment issue after the election, says Patrick Burns, policy director at the Industrial Society. ‘After the election I think things will be different. There is no question the UK is now in a shrinking minority in Europe, and there is such a strong case for this legislation, that I think it’s possible ministers will come round to it.’
But even if the directive is passed, it could be some years before it is adopted in the UK. And following its meetings with the CBI and TUC, the government should soon produce its own report into UK redundancy laws.
Whether or not the government is forced into line with the rest of Europe, Burns predicts that within a year of the general election — if Labour wins — tighter rules will be introduced. ‘It will be very difficult for the UK to resist it in any case, but it would be a positive result for our economy if employers like Vauxhall and Corus had to consult their workforces before taking these decisions.’