In March the Employment Rights Bill passed its third reading in the House of Commons before moving to the House of Lords for scrutiny.
Amongst a number of measures designed to improve worker voice and boost job security, the Bill will introduce new protections from unfair dismissal, rights to sick pay and will guarantee trade unions a right to access workplaces to tell workers about the benefits of trade union membership, so they can make a free and informed choice about whether to join a union.
The Government and Trades Union Congress claim it will be the biggest upgrade to workers’ rights in a generation.
HPC’s Charter for Fair Pay, published in Autumn, called for full implementation of the Bill as the first step in a programme including reforms to corporate reporting and governance and responsible investment practices to create a business culture more aligned with the interests of the country as a whole. There is overwhelming evidence showing that high levels of trade union membership and collective bargaining coverage help ordinary workers get a bigger share of the wealth created by their labour, rather than losing out to wealthy executives and investors. Heightened job security can also give workers’ greater confidence in pay negotiations.
Therefore, stronger employment rights are critical to tackling income inequality pre-taxation, and it’s really encouraging to see that as the Bill progresses through Parliament, the Government have so far resisted fierce lobbying to dilute it. Our briefing for peers debating the Bill last week calls on parliamentarians to support the Bill, while making three key points on the detail:
- In order to truly deliver ‘fair pay’ the negotiating body that will oversee new ‘Fair Pay Agreements’ that will apply in the social care sector (and potentially other sectors in future) should have a remit to cover excess pay-outs to owners and executives at the top of companies providing social care, as well as under-payment of social care workers in the middle and at the bottom.
- The vital and welcome new requirement for employers to provide workers with a statement of their trade union rights could also cover other key employment rights including rights to the minimum wage, sick pay or consultation rights. Many workers – particularly lower earners lack awareness of their rights at work generally, and ensuring they are informed of key rights when they start a new job would go a long way to ensuring these important rights are actually applied.
- When workers vote to recognise a trade union, this should give the union rights to consultation on major business decisions that would affect their members. This would give people more voice and control over their working lives, and improve a situation whereby the UK ranks 26th out of 28 European countries for worker participation in decision-making at work. HPC’s submission to the consultation on the UK’s Modern Industrial Framework making this argument was endorsed by 12 Professors of Employment Relations from leading UK Universities.
Read the full briefing to parliamentarians here.
Is it time for a maximum ‘pay ratio’?
The debate in the Lords also included a proposal from Green Party peer Baroness Jones to introduce a ‘maximum pay ratios’ amendment in line with the Green Party’s long held policy of limiting the pay ratios between executive and worker pay to 10:1. HPC have previously published research looking at the hypothetical impact of capping top pay and redistributing the excess across the wider workforce. We are also due to publish an updated analysis of CEO to worker pay gaps in the coming weeks – our most recent report found a median ratio of 119:1 between FTSE 100 CEOs and their lower earning colleagues.
A study published last month found that £213,000 is the annual income necessary to be considered wealthy in Britain, so it ought to be possible to re-distribute CEO pay packages worth over £4m considerably. A cap on top pay could also be popular with the public. HPC polling has found that over 60% of the population think that CEOs should be paid less than 20 times their low and middle earning colleagues.
Forbes Billionaire List
This year’s Forbes billionaire list, as with recent years, demonstrated the concerning and rapid growth of global billionaire wealth.
- 3,028 global billionaires up from 2,781 last year
- Total billionaire wealth reached $16.1 trillion up $2 trillion from a year ago
- 15 billionaires with fortunes exceeding $100 billion, up from 14 last year and 0 in 2017
- Total billionaire wealth exceeds the collective GDP of all countries in the world
These figures being released in a context where the UK government is making welfare cuts means that it is unsurprising that calls for a wealth tax including from ourselves are getting stronger.
Calls for a wealth tax in parliament from the Greens and Labour backbenchers have become a more frequent part of PMQs and were a major feature of the Spring Statement Debate.
A recent rally held on the eve of the Spring Statement on Whitehall, led by speakers including bestselling anti-inequality campaigner Gary Stevenson and Green Party Leader Carla Denyer MP and supported by a range of organisation including the High Pay Centre, showed that this is likely to remain a core demand of the progressive movement in the UK unless the government is able to increase public spending or show signs that its other policies (such as the employment rights bill) play a meaningful role in cutting poverty and inequality.
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