Corbyn Will Re-Introduce Collective Bargaining and End Zero-Hours Contracts

This looks like a piece of very good news. According to Mike, Jeremy Corbyn plans to repeal the laws passed by Blair’s government in 1999 limiting workers’ rights to have a recognised trade union, and end zero-hours contracts.

Corbyn wrote a piece in the Observer stating that he felt the changes were necessary due to the scandals over Sports Direct, Philip Green and BHS, and the Byron Hamburger chain to help immigration officials arrest 35 illegal immigrants, who were working for them.

At the moment, current legislation stipulates that a union wishing to be recognised at a workplace must show that 10 per cent of employees are members, and 50% want them to lead in pay bargaining. If that isn’t the case, then a secret ballot must be held, at which at least 40% of those able to vote do so, and the majority vote in favour of union recognition.

Corbyn, however, wants to introduce a French-style system, in which firms with over 250 members would have to recognise a specific trade union, and bargain with them over pay. He states

“Even Theresa May understands she has to pay lip service to change in the workplace and the boardroom …,” writes Corbyn.

“But the best way to guarantee fair pay is through strengthening unions’ ability to bargain collectively – giving employees the right to organise through a union and negotiate their pay, terms and conditions at work,” he writes.

“That’s why it should be mandatory for all large employers, with over 250 staff, to bargain collectively with recognised trade unions.”

Corbyn also states that he wants all workers to be given specified hours, that are written into their contracts. If an employer wants them to work beyond these hours, they are to specify the length of time and give them a reason. They will also have to give workers additional compensation, similar to an on-call payment, for being willing to work beyond their usual contracted hours, whether the workers in fact do so or not.

Mike is unsure about the wisdom of the reforms on union recognition, and would like comments on this matter from experts on trade union matters and employment law. However, he welcomes the proposal to end zero-hours contracts.

See http://voxpoliticalonline.com/2016/07/31/corbyn-pledges-to-scrap-blair-union-laws-in-favour-of-collective-bargaining-and-an-end-to-zero-hours-contracts/

The decision to end zero-hours contracts is an excellent policy. Guy Standing devotes several pages in his book, A Precariat Charter, to attacking them. They are widely recognised as a highly exploitative and pernicious system of employment for those trapped in them.

Stewart Lansley and Joanna Mack make clear that the assault on collective bargaining and the trade unions was a deliberate policy of Maggie Thatcher, and has resulted in the contraction of wages, high unemployment, and the impoverishment of the working class in their book, Breadline Britain: The Rise of Mass Poverty(London: OneWorld 2015). They write

Deteriorating opportunities are also the direct product of an about-turn in the country’s political economy. At the end of the 1970s, fighting the rising rate of inflation became the number-one economic goal, displacing the former priority given to maintaining full employment. The instruments used – tight monetary and fiscal policies and a strong pound – accelerated long-term de-industrialisation, while triggering mass unemployment. The critical decision in the 1980s to adopt a more aggressive, market-oriented model of capitalism led to the sweeping away of regulations, the favouring of finance over manufacturing, the outsourcing of public sector jobs, relentless pressure on companies to cut labour costs and, critically, an assault on labour’s bargaining power.

Cabinet papers for 1983 reveal that Mrs Thatcher admonished Norman Tebbit for being too timid on trade union reform, telling him we ‘should neglect no opportunity to erode union membership’. In Britain the proportion of the workforce covered by collective bargaining has fallen from around eighty percent in 1979 to below twenty-five percent today (fifteen percent in the case of private sector workers). This is one of the lowest levels of coverage among rich nations, adding to the heavily skewed and economically unhealthy concentration of corporate power. The UK stands at twenty-first place out of twenty-seven countries in the European Union in terms of workplace representation, though parts of the European continent are also seeing more recent falls in the level of coverage, though from a much higher base.

Britain’s much vaunted ‘flexible labour market’, engineered during the 1980s to give business greater freedom to hire and fire, was necessary, it was claimed, to enable domestic firms to compete in an increasingly globalised economy. Such freedom for employers has continued to be championed by subsequent governments. Yet, just as over-restrictive labour laws can be bad news for dynamism, so can under-restrictive laws.

Britain’s low-wage, high-unemployment economy is as much the product of these internal, political forces as of external, economic ones. Indeed, it was later admitted by one of Mrs Thatcher’s top economic advisers that one of the government’s central aims was the taming of labour. ‘The nightmare I sometimes have about this whole experience runs as follows … there may have been people making the actual policy decisions … who never believed for a moment that this was the correct way to bring down inflation. They did, however, see that it would be a very, very good way to raise unemployment.’ This was how Sir Alan Budd, chief economic adviser at the Treasury in the 1980s, summed up – in 1992 – the multilayered assault on inflation and the unions. He continued: ‘And raising unemployment was an extremely desirable way of reducing the strength of the working classes…what was engineered there, in Marxist terms, was a crisis of capitalism which created a reserve army of labour and has allowed the capitalists to make high profits ever since.’ (pp.101-3, emphasis mine).

They further write on page 242

Perhaps the most effective, and radical, measure for boosting the total wage pool at the bottom would be a rebalancing of bargaining power in favour of the workforce. Another would be a more concerted attempt to reduce the significant pay gap between men and women by raising women’s wages. Both measures would raise the share of national income going in pay and would be critical elements of an effective strategy for cutting poverty levels among the workforce.

Far from being a strength, the sustained decline in workforce bargaining power in the UK is an economic and democratic weakness. Because of the ‘wage premium’ associated with collective bargaining, this erosion of labour’s bargaining power has played a big role in wage contraction. Evidence across sixteen rich countries has shown that the higher the level of trade union membership, the lower the degree of inequality. Further, it is likely that the erosion may have encouraged British employers to move down a low-pay and productivity road. By being able to minimise pay and rely on casualised labour, British employers – unlike say their German counterparts – have had few incentives to improve skills and introduce more productive processes.

Phased in over time, such a policy mix – a boost to the minimum wage, a reduction
in the numbers on less than the living wage, wider collective bargaining coverage and lower unemployment – would put the thirty-year long trend of a shrinking wage share into reverse, and make an important contribution to reducing poverty among the low-paid, while taking some of the strain off the benefit system.

Corbyn’s decision to expand and strengthen collective bargaining therefore appears from this to be an excellent measure. It will also doubtless be attacked by the Confederation of British Industry and the right-wing press and Blairites with just about every ounce of abuse they can muster. We’ll hear once more about how this will threaten British businesses with bankruptcy, and how this will lead us all back to the strike-torn 1970s, the Winter of Discontent, and all the old Thatcherite rubbish. The reality is that Britain was no more strike-prone in the 1970s than many other countries, and much less so than America. And the Winter of Discontent was, in the views of at least one historian I’ve read, the response to the system of wage restraint buckling under the weight of political pressure it was not designed to deal with, and which the unions should not have been expected to shoulder.

Of course, the real reason for the rage at the reinstatement of collective bargaining and the ending of zero-hour contracts will be that it attacks the nearly forty years of exploitative Tory employment policies that Maggie introduced. These employment practices have caused real misery, just as Thatcher and the economists she followed, von Hayek and Milton Friedman, intended them to. They should end now.

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7 Responses to “Corbyn Will Re-Introduce Collective Bargaining and End Zero-Hours Contracts”

  1. 61chrissterry Says:

    While I agree with some proposals I disagree with others.

    The zero hours contracts need to be abolished for they do give employers too much power. But how to achieve this, is ‘If an employer wants them to work beyond these hours, they are to specify the length of time and give them a reason. They will also have to give workers additional compensation, similar to an on-call payment, for being willing to work beyond their usual contracted hours, whether the workers in fact do so or not.’. For I wonder how this will work in the Care Industry’. What will the situation be if someone calls in sick and the position needs to be filled to maintain care, There will, in most cases only be a short period of time for this to be achieved.

    To give care workers ‘additional compensation, similar to on-call payment….’, this will require the care rate charged to customers to be increased and how will this be achieved with Local Authorities capping the hourly rates. It does not allow for Individual Employers who are provided Direct Payments to arrange their own care and the limitations required by LAs for them to agree a Direct Payment.

    With the varying different sizes of employers and their funding streams any employment laws need to be structured extremely carefully, so as not to disadvanage those Individual Employers who have no say in the matter because they are not in control of their funding.

    • beastrabban Says:

      Thanks, Chris, for that interesting perspective on the problem. You’ve certainly identified some problems with Corbyn’s recommendations. Hopefully, they’d be ironed out and amended if this bill ever gets discussed in parliament. It also points to a wider problem of funding for healthcare, which is being deliberately kept low by the Tories in order to encourage people to go private, at least according to Jacky Davis and Raymond Tallis in NHS-SOS.

      • 61chrissterry Says:

        Yes, there is a greater focus to push people to private health care, mainly on a selective treatment basis, but within care the recipients, in the main, are not able, due to the nature of their own finances, to fund any private care so they are totally reliant on public services.

        Unfortunately over the last 20 – 30 years the disabled have not been in focus as they should have been with the governing authorities and currently this is even more so.

    • Florence Says:

      Corbyn and John McDonnell are proposing a complete over haul of the care system, from end to end. They want the it to be brought in-house to the Local Authority or even the local councils. They want the pay rates to reflect the skill and qualifications needed, and to bring the pay in line with similar male-dominated work. So the worries you have will in effect be both lesser and greater as the entire system is re-thought from end to end. The one thing to be sure of – the Labour party will not tolerate profits to be made on this work. The imperatives of private companies to reduce costs and raise dividends and management pay are anathema to Labour in any provision of the caring professions – NHS, Care, Education, etc. It’s fine if you want to make & sell adult hygiene products, for example, but not in the decision to provide them. This is a real situation – adults who need help to use the toilet at night are being told to were nappies, even though they are not incontinent. n another case, those who are incontinent are being “Issued” with too few pads, and told to wear them for longer. Both of these case have arisen because of the need to keep costs as low as possible, while ignoring the dignity and health of those involved. If you were not incontinent, would you like to sit in your own pee for several hours, and then need a carer to “change” your pad? Its a gross invasion of anyone’s dignity. If you are incontinent, how long would it be “acceptable” that you sit in your own excrement, with the dangers of infection and skin problems?

      There is no place for profit in these equations.

      • beastrabban Says:

        Thanks for that, Florence. I’m really pleased to hear about that, as it’s desperately needed. I do know care homes where the patients are clean and well-looked after, but there have been too many where the opposite is the case. And you’re absolutely right – such treatment of the disabled with toileting problems is completely unacceptable.

      • 61chrissterry Says:

        To bring care back in-house to Local Authorities assumes they got it right when it was all in-house.

        This was not so as the LAs had control, there was no choice on how care was to be administered and by whom for those whose needs required care. It was this is it,have it or not and quality control was not in the equation.

        Even now where care is partly undertaken by persons employed by LAs this is most likely the most expensive option.

        I agree there are many care agencies outwith the LAs whose quality needs some inspection, but there are also many others who do care and excel at quality care.

        If you can obtain services from a good care service provider the management is usually contactable and is not faceless as it is in many LAs.

        You also have a degree of choice, in that the agencies, if they are good will take on board your comments. Then we have the situation where a person requiring care can employ their own care workers and be an Individual Employer in their own right, which gives the person themselves their own control and choice. This is funded by Direct Payments and allows an element of independence for the individual where they can set the care hours within the care package and how it is delivered. Any aspect of in-house facilities will at least diminish the person with care needs control, choice and independence if not withdraw it completely.

        It is not more in-house that is required but less, but where LAs can be involved as well as in funding is to provide the required quality checks not only on a reactive basis, but even more so on a proactive stance.

  2. Michelle Says:

    Catching up on reading… appreciate the comments from Florence and Crissterry.

    Just an FYI for Beastie on unions over the pond “Why Are Unions Bankrolling Candidates That Hate Them?

    Labor PACs have given more than $534,000 this cycle to Republican backers of a major anti-union bill.”

    Ref: https://thinkprogress.org/labor-union-pac-donations-right-to-work-for-less-republicans-3a8fd6df1053#.nvfqv6mdp

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