What lies in store in 2016?
The year will see the new statutory “National Living Wage” (NLW) minimum of £7.20 for workers aged 25 and over coming into force in April. It will have the most immediate impact in the hospitality sector where half of the workforce earned just £7.00 per hour or less last year.
Cash-strapped councils will come under pressure from the social care sector to boost the value of their contracts, making use of the 2% Council Tax “precept” allowed for in the government’s 2015 Autumn Statement. But how they and other public sector employers handle pay this year is another key issue — for the four years from 2016-17, the Tories are only funding public sector workforces for an average of a 1% pay rise.
The NLW is not just a one-off event in April. Chancellor George Osborne expects it to rise to around £9 per hour (60% of median earnings) by 2020. It’s up to the Low Pay Commission to make recommendations on how that will happen. October is the normal anniversary for National Minimum Wage increases, so this is a story that will play throughout the year.
For anyone earning more than the minimum (including those already covered by the £8.25 voluntary Living Wage or £9.40 London Living Wage), it might feel as if this is a party they haven’t been invited to. When inflation fell during the last pay round so did settlements, dropping to a 2% mid-point (the lowest for several years).
The outlook might be better this year, although there’s gloom in the manufacturing sector. Employers will point to costs arising from pensions auto-enrolment, as small companies are finally drawn in, but forthcoming contribution increases are being delayed.
They may also be anticipating business rate rises, and the largest have a 0.5% apprenticeship levy to pay from 2017. A conservative line on wages could backfire if staff turnover rates and skill shortages rise.
While the book may open on pay trends, the die has been cast on pensions. The full basic State Pension is going up by £3.35 to £119.30 per week (by £5.35 to £190.80 for a couple where a wife relies on her husband’s contributions). But for people reaching State Pension Age after 6 April there’s a new single tier pension set at £155.65 a week.
While that may look like a big increase, people will need to check the small print and see what the impact is on their overall income, taking into account the other changes taking place.
Trade Union Bill
The most important development set to take place this year affecting union organisation — at least in the public sector — are those aspects of the Trade Union Bill which directly target their internal operations.
Most notably, these are the threat to the check-off system — where union members authorise the employer to deduct their subscriptions from their wage packet and pay them direct to the union — and the plans to spread the squeeze on facility time (already widespread in the civil service) to the rest of the public sector.
While these aspects of the Bill only directly apply to public sector employers, they will impact heavily on the resources of those unions hit, many of whom also have members in private sector workplaces and who may be indirectly affected. (And, of course, other parts of the Bill are not limited to the public sector — see section on Employment Law see pages 10-12.)
For the time being, unions will continue their campaign to overturn the planned ban on public sector employers providing check-off facilities.
The government has found it difficult to provide any convincing arguments in favour of this measure, particularly since many employers are actually charging unions for the service, so the cost-saving argument does not stand up. Unions are left with little doubt that it is aimed at making life more difficult for them, and destroying any good relationships that exist between them and employers.
And many public sector employers feel the same. Local authorities in Scotland have said they will refuse to implement the provision if it becomes law (see feature on pages 16-18), and unions are pressing the Scottish government, which is also opposed to the ban, to follow suit.
NHS managers up and down the country have warned that the prohibition will jeopardise their relationships with staff. In a survey of senior NHS managers carried out by their union, Managers in Partnership (MiP), 86% said that check-off is not a significant financial burden on the NHS and that it “helps to facilitate good industrial relations”.
And the Financial Times reported that HR directors in the NHS had written to Cabinet Office minister Matthew Hancock expressing concern over the potential damage to employment relations, and asking the government to think again.
One senior manager, Dean Royals, HR director at Leeds Teaching Hospitals NHS Trust, pointed out that the ban could have what he called “unintended (but entirely predictable) consequences”.
He told HR magazine that check-off “does give employers a sense of their union density, particularly when dealing with multiple trade unions”, which he said was useful, particularly when union balloting is taking place.
Although unions — and some employers — are still hoping to get the plan dropped, unions with members in the public sector are simultaneously working hard to transfer members onto direct debit (DD) to shore up their organisation and finances in the event of the law being passed.
Skills minister Nick Boles has said that the Bill would give unions a year to transfer members from check-off to DD. Yet for unions, persuading large numbers of members to sign up to direct debit to pay their subs is tantamount to a wholesale re-recruitment exercise.
The PCS civil service union was forced to show the way early on as, even before the 2015 election, eight government departments, urged on by the then Tory-led coalition government, announced that check-off would be withdrawn.
By July 2014, PCS in one of the largest government departments, HMRC, announced that it had signed up over 80% of members to DD, and the union said that its switching campaign throughout the departments had led to the recruitment of thousands of new members and activists, including 800 who had taken on representative roles.
However, as the government is well aware, this sort of campaign clearly takes a toll on union activity and resources, when those same organisations will also be dealing with further huge job cuts among their members with the latest swing of the government’s public spending axe.
Public sector unions are also facing the prospect of restrictions on the amount of facility time available to their reps, again following in the footsteps of the civil service, where limits were imposed in October 2012. The Trade Union Bill prepares the ground for squeezing the amount of facility time available to lay union reps in the public sector. It provides the government with powers to:
• require public sector employers to publish information on their numbers of union officials and the amount spent on facility time;
• limit the percentage of working time an employee can spend on union matters; and
• limit the percentage of an employer’s pay bill that can be spent on facility time.
The government was boosted by the results of its cap on facility time in its own departments — a large drop in the number of reps on full facility time, from 200 in November 2011 to just 13, less than a year later. Again, however, the government will face opposition from many managers and employers, as well as from unions. Scottish local authorities have said the measure would be damaging to employment relations.
And the MiP survey found that 95% of senior NHS managers felt that the cost of providing paid time off “is outweighed by the benefits their organisation receives in addressing problems in the workplace and supporting good employee relations”.
A study carried out for the Royal College of Nursing found that a squeeze on facility time in the NHS could actually cost taxpayers’ money rather than saving it. It said the powers set out in the Bill “may well result in the imposition of unnecessary costs on the NHS, and reduce the positive impact that union representative presence appears to have across a range of performance outcomes”.
While unions will undoubtedly suffer if these measures go ahead, they will clearly not be the only losers.
Other aspects of the Trade Union Bill will dominate 2016. The introduction of employment tribunal fees effectively closed off individual rights-based dispute resolution for most workers, securing, in the words of TUC general secretary Frances O’Grady, a “huge victory for bad bosses”.
As a next step, with its Trade Union Bill, the government has turned its attention to silencing collective voice, in the most far-reaching attack on trade unions since the 1980s.
The restrictions on the right to strike and protest in the Bill are highly ideological, and target, in particular, the power of public sector unions.
Commenting on the Bill, the general secretary of the UNISON public services union, Dave Prentis, said his union will not be “neutered” by the “draconian” attack on workers’ rights. Prentis predicted that instead, the move will result in more strikes, with far more effective, localised ballots.
The Bill will introduce higher strike thresholds: for a lawful strike, at least 50% of balloted workers will have to cast their vote, turning abstentions into “No” votes. Higher thresholds will be needed for a strike in “important public services”, where at least 40% of balloted workers must vote in favour.
Tory claims to want to increase workplace democracy ring hollow given the continued blocking of secure electronic and workplace balloting (see feature pages 13-15).
Other restrictions include longer notice requirements and even more complicated rules about the exact wording that must appear on the ballot paper. Having overcome all these hurdles, striking workers will face employers determined to break their strike by replacing them with agency workers, with the lifting of the longstanding ban on doing this, described by the International Labour Organisation as a “serious violation of freedom of association”.
The ban, mocked by the Tories as “nonsensical”, is a basic feature of the strike laws of nearly every other European member state. Rolling strikes will also become very difficult, with a new requirement to re-ballot when industrial action lasts for more than four months, fundamentally undermining the union’s bargaining position at the negotiating table.
All ordinary workers will suffer as a result of the loss of collective voice and power represented by this Bill, but its impact is likely to be felt hardest by low-paid female workers.
TUC evidence demonstrates that the higher ballot threshold for “essential services” will affect significantly more women than men. Initial findings indicate that nearly three quarters (73%) of trade union members working in “important public services” are women.
In addition, the Picketing Code is to be “strengthened and updated” and extended to include “protests linked to industrial disputes”, even though only 25% of 118 respondents to the government’s consultation on picketing agreed that the Code needed updating at all. Meanwhile, only 3% supported its extension to wider protests. The new Code will also include advice on the “responsible use of social media”, another proposal that met with very little support.
A new legal requirement in the Bill for unions to appoint a picket supervisor will inevitably lead to more applications for injunctions and new opportunities for the victimisation of striking workers.
Unions will be required to notify police of the name and contact details of the picketing supervisor, and the location of the picket. He or she will have to carry a letter of approval from the union, wear an armband or badge, and be present or able to attend the picket at short notice.
Proposals to require unions to report on their use of social media, and to share their strike plans with the employer and the certification officer, have been abandoned.
Significant opposition to the Bill comes from outside England. SNP leader and Scotland’s first minister Nicola Sturgeon has confirmed that the SNP will continue to “vigorously oppose” the Bill, and will not enforce at least some of its measures if enacted in Scotland (see feature pages 16-18). Meanwhile, in Wales, first minister Carwyn Jones has promised to try to block the Bill becoming law in Wales.
Speaking to an audience of delegates at an Institute of Employment Rights (IER) conference in London, IER president Keith Ewing outlined how many of the Bill’s provisions clearly violate ILO conventions and international laws and treaties.
These include ILO Convention 98 on collective bargaining, ILO Convention 151 on dispute resolution in the public sector, and Article 11 of the European Convention on Human Rights (the right to freedom of association), opening the way to a future legal challenge.
The latest economic forecast from the European Commission, published in November, suggests that the EU’s current “subdued” economic recovery will continue into the future although it identifies “heightened global risks, including persistent geopolitical tensions”.
It forecasts that output (GDP) for the whole of the EU will increase from 1.4% in 2014 to 1.9% in 2015 and 2.0% in 2016. By that date, only the Greek economy is still expected to be shrinking.
One reason for the slowly improving position is that most member states have ceased to make major cuts in public spending — adopting a “neutral fiscal policy stance” in the jargon of the report. In 2016, only Cyprus, Greece, Finland and Hungary are expected to be cutting government expenditure, although in the UK it is expected to be unchanged and to begin falling again in 2017.
However, although the general ending of spending cuts is expected to “support the economic recovery”, the overall level of growth is likely to be “insufficient to reduce unemployment rates below pre-crisis levels”.
By autumn 2016, unemployment in the EU as a whole is still forecast to be running at 9.2%, compared with 9.5% in autumn 2015, while just over a quarter (25.8%) of the Greek labour force and a fifth (20.5%) of the Spanish labour force are forecast to be out of work.
Wages are expected to rise by 2.0% on average. And with inflation still forecast to be low, this will translate into a real-terms growth of 0.9%.
Against this background, the Commission’s work programme for 2016, published at more or less the same time, says that “this is no time for business as usual” and promises legislation which “can have a direct impact on jobs and growth, on our environment and social well-being, on our security and the way we engage with an interconnected world”.
The programme contains some elements which the European Trade Union Confederation (ETUC) has welcomed, notably the promise of “a new skills agenda”, action to tackle tax avoidance, and a new approach on migration.
However, on key social and employment issues, there are few specific new proposals which can be expected over the next 12 months.
The three main ones are a new “European pillar of social rights”, which could potentially be positive, particularly if, as promised, it lifted all countries to the level of the best; a package on employee mobility, which will revise the directive on so-called posted-workers (those working in one country but for an employer based in another); and measures to improve work-life balance. (This is instead of a revision of the maternity leave directive which was abandoned in 2015.) In all three cases, the detail is still awaited.
For the UK, these changes could prove to be academic if the referendum on the UK’s membership of the EU — promised for either this year or next — produces a vote to leave.
Health and safety
February 2016 will see the introduction of new sentencing guidelines that will mean large companies convicted of the most serious health and safety offences facing fines of up to £20 million.
The Sentencing Council’s new definitive guideline for health and safety offences, corporate manslaughter and food safety and hygiene offences recommends fines of up to £20 million for large organisations (with a turnover of more than £50 million) who commit the most serious corporate manslaughter offences.
Where a fatal health and safety offence is involved, the guidelines advise fines of up to £10 million. In addition, in the most serious cases, they set out that judges can send company managers or directors found guilty of a breach of duty to their employees to up to two years’ prison.
The TUC has warned that changes being introduced by the Trade Union Bill (see above ) will make it much harder for unions to work with employers on health and safety, and that allowing untrained temporary workers to cover for experienced staff during strikes could lead to even more accidents at work.
Union safety reps will continue to follow developments in the High Court blacklisting case (see Labour Research, October 2015, pages 13-15). Following a number of preliminary hearings, the full trial is due to begin in May 2016.
The government will be drawing up regulations on gender pay gap reporting in early 2016. These will apply to public, private and voluntary sector organisations with 250 or more employees.
Bonuses as well as basic pay will be included, although it has been proposed that pay is calculated by looking at median hourly earnings excluding overtime. This could skew the figures as men tend to work more overtime.
It’s unclear how effective any of this will be as the government is relying on “competition and peer pressure” alone to make employers sort out any pay inequalities. In response, unions have called for speedier implementation of the regulations and for companies that do not comply with the law to be fined.
Britain’s equality watchdog, the EHRC, is undertaking a public consultation on its Strategic Plan for 2016-2019. This sets out the commission’s key objectives for the next three years. The EHRC is facing challenging times. A new chair will be appointed in April to succeed Baroness Onora O’Neill. With the organisation struggling with job losses and budget cuts, strong leadership will be essential.
Learning and skills
A number of developments in skills and learning at work will start to take effect during 2016. The Welfare Reform and Work Bill includes an obligation for the government to report each year on the progress made towards meeting its target of three million new apprenticeships by 2020. Public sector bodies will be required to employ apprentices and set targets to increase apprenticeship numbers.
The government has also announced that it will give apprenticeships the same legal treatment as degrees, and protect the term “apprenticeship” by preventing misuse of the term.
The Enterprise Bill makes it an offence for a person, in the course of business, to provide or offer a course or training as an apprenticeship if it is not a statutory apprenticeship. And it will protect the reputation of training providers, employers who offer statutory apprenticeships and apprentices who join those apprenticeships by maintaining their standards and ensuring that statutory apprenticeships are not confused with lower quality training.