On Monday the CBI unveiled a package of measures to ensure Britain’s labour market is best placed to sustain businesses and jobs during the recovery. The proposals include embracing more flexible working, blocking regulations that will cost jobs and changing industrial relations legislation.

In a new report, Making Britain the Place to Work, the UK’s leading business group highlights the importance of the UK’s flexible labour market and the key role it played in minimising job losses during the recession. Now employers want to build on that flexibility, which has benefitted businesses and the workforce, by supporting the right to request flexible working to all employees.

On the regulation front, the CBI wants the Government to introduce a sustainable employment test to ensure that any future employment laws help, rather than hinder, the creation of new jobs.

Strikes damage economic growth and inconvenience the public. At a time of fragile recovery, strikes should require a higher bar of support. The CBI is therefore calling for changes to rules around ballots to ensure that industrial action can only go ahead if 40% of the balloted workforce support it, as well as a simple majority of those voting. This would prevent strikes going ahead based on a relatively small turnout of particularly active members.

In addition, the consultation period for collective redundancies should be shortened from 90 days to 30 days to reduce uncertainty for staff and allow employers to reshape their workforces swiftly to respond to significant falls in demand.

John Cridland, CBI Deputy Director-General, said:

“As we enter a period of fragile recovery, we need to do everything we can to create a jobs market that works for Britain, and to ensure Britain is the place to work.

“To position the UK for growth, any new employment legislation must pass a simple test of whether it will encourage job creation.

“We also need to look at changing the rules around industrial action. Strikes cause misery. They prevent ordinary people going about their daily lives, whether it’s getting to work or getting the kids to school.

“Strikes also cost the economy dearly and undermine our efforts to help rebuild the economy. That is why we believe the bar needs to be raised, so strike action is not possible unless 40 per cent of the workforce has actively voted to withdraw its labour.”

Looking at the proposals to encourage greater flexibility in the workplace in more detail, the CBI recognises that boosting participation rates and tackling under-representation will play a key role in fostering economic growth. The CBI’s proposals include:

  • Extending the right to request flexible working to all employees, while ensuring employers have enough time to adapt and are given clear guidance on how to prioritise requests.  
  • Retaining the individual opt-out from the maximum 48-hour week under the Working Time Directive, which allows staff to choose to work longer hours, for example to earn extra money to support their families. 
  • Working with the Government to introduce greater flexibility in the sharing of caring responsibilities between parents. 
  • Making the right to request flexible retirement more effective, rather than simply abolishing the default retirement age when there is not a practical alternative in place. This risks creating problems in the workplace.

The CBI’s measures for positioning the UK for recovery and promoting growth are focused on making sure employment legislation helps firms sustain and create jobs, as well as enabling them to take swift action to respond to changes in demand that will protect the business and job prospects in the longer-term. One key measure is shortening the consultation period for collective redundancies from 90 to 30 days for companies seeking to make more than 100 people redundant. This would bring the requirement in line with the one-month consultation period needed for proposed redundancies of fewer than 100 jobs.

John Cridland added:

“During the recession, many firms had to restructure their businesses to survive. No company takes the decision to let go of staff lightly, but when businesses reach the stage where demand has fallen off a cliff and redundancies are inevitable, dragging out the process over three months just prolongs the agony for employees.

“We believe shortening the consultation period to a month would spare staff from some of this uncertainty, while allowing companies to act quickly to protect the longer-term health of the business.”

Other measures to position the UK for recovery include:

  • Introducing a sustainable employment test to block regulations that will cost jobs. All proposals should be subjected to rigorous audit with businesses given the chance to highlight where regulation has been poorly designed and suggest ways to improve them.
  • Simplifying rules around the employment of agency workers to ensure existing jobs can be maintained and new posts created.
  • Reviewing the implementation of existing EU directives to remove any gold-plating, including of European TUPE rules. Current TUPE laws effectively prevent an employer from harmonising the terms and conditions of a newly-acquired business with its existing workforce. This could mean two employees doing the same jobs but with different holiday and sickness entitlements.

The CBI’s measures to promote a fairer approach to employment relations in the workplace centre on reform of industrial relations legislation and a framework of shared minimum rights at work. Union membership has been falling consistently over the last 30 years with only 15% of private sector employees choosing to join a union. Moreover, the reasons for joining may also have changed with membership no longer primarily about collective bargaining but accessing other services and benefits, such as discounted insurance or legal advice. In this context, employees should be given the right to decide whether they want to be covered by collective bargaining. The CBI is calling for:

  • A ballot to be held to demonstrate workforce support for trade union recognition. This would replace the current system where the Central Arbitration Committee can automatically grant recognition if it believes union membership is greater than 50%.  
  • Rules on strike action to be changed to ensure that industrial action has the support of 40% of the balloted workforce, in addition to a majority of votes cast. 
  • Action to strengthen the tribunal system to make greater use of pre-hearing reviews to weed out weak claims.

Responding to the CBI report, Martin Warren, head of employment law at international law firm Eversheds commented:

“The CBI’s report offers broad support to the government’s commitment to extend the right to request flexible working to all employees and to introduce greater flexibility in the sharing of caring responsibilities between parents. Our experience suggests that many employers have embraced flexible working and will similarly provide their support to its extension, but they must be given sufficient time to adapt and prepare.

“Also, the CBI’s report calls for the 90-day consultation period for collective redundancies to be reduced to 30 days. The TUC opposes this proposal on the grounds that a longer time is needed to develop alternatives. Legally, the requirement to consult for collective redundancies derives from an EU directive; however, this directive does not require a 90 day period, instead consultation must begin in “good time” and the employers must notify the state of the impending redundancies 30 days before they take effect. Reducing the 90 day period would not therefore breach EU rules, however, employers would remain under the obligation to begin “in good time” (regardless of any minimum timescale for consultation) and it would not remove the need for genuine consultation.

“More controversially, the CBI proposes a change to strike ballot rules, specifically, requiring the support of 40% of the balloted workforce, in addition to the present requirement for a majority of the votes cast. The TUC has suggested that this would “almost certainly breach the UK’s international human rights obligations”. Putting to one side the obvious political and emotional issues attaching to this proposal, legally, it has precedence. Currently, this ballot requirement exists under the statutory framework providing for a trade union to request collective bargaining rights with an employer. There are no suggestions that it is contrary to international human rights in that context and, to date, other trade unions complaints that UK strike rules breach international human rights have been rejected by the Court of Appeal.”