CBI wrong on tribunals and minimum wage, says TUC

Commenting on the CBI’s trends survey published today (Monday) TUC General Secretary Brendan Barber said:

The CBI has got everything wrong about employment tribunals. There is no long term increase in applications, simply a one-off blip in cases about dress codes that could have been reduced to a single case if the law allowed group test cases. Unions are not behind the vast bulk of tribunal cases, these come from non-union employers. The best way for the CBI to reduce tribunal cases would be to encourage their members to recognise unions and agree fair procedures that can deal with difficulties without resorting to legal action.

It looks as if the CBI is getting ready to oppose any further increases in the minimum wage, even though the wage helps fewer than was originally planned and has had no adverse affect on jobs. Nothing could do more to reduce CBI influence in this debate. The minimum wage has been a huge success, and further careful increases to boost the income of the low paid above inflation have always been part of the deal. Too many CBI members already practice boardroom excess. Now it seems they want to keep the poor in their place too.

CBI instincts may be to line up with John Redwood, but it is very bad politics.

CBI should focus on the facts on tribunals, temporary agency workers and National Minimum Wage

There is no evidence of an increase in vexatious tribunal claims

Fact: The 17% increase in employment tribunal applications in 2002-3, was nearly entirely due to multiple sex discrimination claims brought by PCS members in the civil service over dress codes.

The TUC wants the government to change the law to allow trade unions to bring representative actions for groups of members. This would reduce the overall workload for tribunals and improve the consistency and fairness of decisions.

Trade unions resolve disputes in the workplace

Fact: DTI Research confirms that trade unions are effective in resolving disputes by using workplace procedures and only use litigation as a matter of last resort. The latest annual Trade Union Trends survey shows that the numbers of tribunals brought by trade unions fell by 40% due to effective collective bargaining but that if a tribunal application is necessary unions win or settle nine out of ten tribunal cases.

Statutory recognition legislation should be extended to all small firms
Fact: Small firms account for the majority of employment tribunal applications. In 2003, firms employing fewer than 25 employees accounted for 45% of claims and those employing fewer than 50 accounted for 62% of claims. (DTI)

Currently statutory recognition legislation only applies to workplaces with fewer than 20 workers and new Information and Consultation Regulations only apply to workplaces with more than 50 employees. The TUC believes that extending these collective rights to smaller companies would enable trade unions to resolve disputes effectively within workplaces, without resorting to tribunals.

(Findings from DTI Survey of Employment Tribunal Users 2003, published in August 2004)

CBI Myth: the introduction of equal treatment rights for agency workers will result in job cuts

Fact: Part time workers won equal rights with full-time workers in 2002, the number of part-time workers in the UK has since grown by 7%.

Fact: Despite strong employment growth, all forms of temporary work has fallen in absolute terms and as a share of the workforce since its peak back in 1998 - 7.9% to 6.5% in 2002 and 6.1% in 2004.

Fact: In 2002 equal rights were introduced for employees on fixed term contracts. Since 2002 the number of agency workers has fallen by 14%, whilst the number of staff on fixed term contracts has only fallen by 8%.

Fact: agency work is growing across Europe where agency workers are much better protected: France and Netherlands are the market leaders

Figures based on LFS statistics for Spring Quarter

Fact: employers say they use temps as short short-term cover (59%) and during short busy periods (40%), not to cut costs.

Fact: there is no evidence that agency working is a stepping-stone to work for excluded workers. Between a third and two-thirds of temporary workers move on to permanent jobs within two years but these are most likely to be highly employable, educated workers aged 25 - 34 who have not been unemployed in the last five years.

The National Minimum Wage (NMW) underpinning strong economic growth

Fact: The Low Pay Commission has aimed to benefit between 1 - 2 million workers with each minimum wage rise. It has consistently undershot this target with the NMW benefiting between 900,000 - 1.2 million between 1999 - 2003, and the number of beneficiaries falls dramatically between rises, reaching a low point of less than 500,000 in September 2003. The October 2004 increase is expected to initially benefit 1.5 million low paid workers.

Fact: Women part time workers benefit most from minimum wage increases, making up over half the workers who benefited from the 2003 increase.

The CBI appears to be going back on a deal made in 2003 by its members on the Low Pay Commission, who said:

’We ... believe that there is a case for increasing the effective level of the minimum wage, implying a series of increases for a number of years above average earnings, and increasing gradually the number of people benefiting.’ (The National Minimum Wage - Building on Success: The fourth report of the Low Pay Commission, 2003, p173)