Select Committee on Education and Employment Minutes of Evidence

Examination of Witnesses (Questions 31 - 39)




  31. Once again, ladies and gentlemen, thank you very much indeed for coming and for the evidence which you have given to us so far. I understand that it might be convenient if Susan made a brief statement.

  (Ms Anderson) Can I just introduce myself and my team? I am Susan Anderson and I am responsible for HR Policy at CBI. Rob Collinge is HR Director for GlaxoSmithKline and also Chairman of CBI's Employee Resourcing Committee. Simon Bartley is Managing Director of CJ Bartley, which is a small firm involved in electrical and business service engineering, and he is Vice Chairman of our SME Council. We very much welcome the opportunity to come and give evidence to you today. Work-life balance is a very important issue for employers and I just wanted to make a few general remarks to emphasise how much good practice is already happening in the United Kingdom. If we look at ourselves compared to our EU colleagues, we have the second highest incidence of part-time working in the United Kingdom, second only to the Netherlands. We have 25 per cent of the United Kingdom workforce working on a part time basis. In terms of policies we have 82 per cent of employees working for an employer who has some formal flexible working policy such as job sharing or part time work. Obviously, smaller firms do not necessarily have those policies written down but they will have the same sorts of practices. We have a very good news story to tell. The reason that employers have adopted these flexible working practices is to meet employer need in a lifestyle where we now have 24-hour services, and when we have just-in-time manufacture and delivery employers need to be able to man their workplaces flexibly. They are also responding to employee demand. As our TUC colleagues have just said, having flexible working practices, not just for parents but for people with elder care responsibilities or people who want to training, for example, means that you can attract and retain the employees that you have so expensively trained. We are not complacent; we recognise more can be done. We very much welcome the opportunity to participate in the Government's review. It has undertaken an awful lot of consultation in this area and that is certainly very welcome. However, there are some lines that need to be drawn and I think one of those is around the part time work issue and I am sure we are going to come on to that in great detail. Suffice it to say that we do not think you can give absolute rights in this area. It is all right for the Government to have minimum rights and minimum wage and unfair dismissal, areas like this. When we are talking about how work is organised, how companies organise shift patterns, the daily routine of work, it is not possible to start introducing rights in this area. My two colleagues, I am sure, can go into that in more detail. We do think it is an important agenda, we are very pleased to give evidence and we are happy to answer any questions here and now. If we cannot answer your questions I am sure we can come back with further information.

  32. Thank you very much indeed. You have heard the previous discussion. To what extent do employers have the responsibility to help employees achieve a suitable balance? Do you formally admit a responsibility? Is that the appropriate way to approach this problem?
  (Ms Anderson) I think it makes good business sense. If you have got employees that you value (and most employers have), offering them the opportunity to work in ways that suit them ensures that you have highly motivated employees who are obviously going to be more productive. But there come to be limits. My colleagues can give you examples of areas where a move to part time work could not be accommodated. I think it is a question of balance. We recognise that there is a win/win situation but we cannot give absolute rights. The way that we have progressed is because we have been able to meet employee needs, we have been able to meet employer needs, and that is very different from saying that we can accept unlimited new rights in this area. I am sure my two colleagues will want to come in on this point.
  (Mr Collinge) I think it was the word "responsibility" you used which interested me. I see that we have a role in providing an attractive workplace for people to come to work to because that is in our interests, both in the narrow interests of the business that we are running but also in the wider interests of the society we live in as employers. Certainly that covers pay, benefits, how nice where you work is, but also, very importantly, areas like family support. As an employer we would see family support and the wider work-life support for our employees as a very important part of what we do. I could give examples of what our company does. You are probably aware of what companies generally do in that area and if we did not feel that was part of what we were in business for then we would find there was a real problem, it was not being done, and we might even support the legislation as needed, I suppose. Our point would be I think that in the current environment we are better able to address the diversities of different groups of employees in an environment that is more flexible than it would be if one or other group have specific rights so that it is then hard for us to manage the needs of other employees. "Responsibility" is an odd word for what I think we are doing but I agree with the sentiment.
  (Mr Bartley) Can I say from the small business perspective that flexibility is what causes small business, whether they are start-ups, whether they are recently formed or whether they are small businesses that have been around, to thrive and benefit. The Government has indicated that there is a wish for small businesses to be the driving force of the British economy. Flexibility is what is needed by those small businesses in order for them to develop and to grow and to move forward. Restricting that flexibility actually will in the short term damage the ability for start-up businesses to develop and grow. Start-up businesses, whether they are an individual entrepreneur, a couple of people from the same family, a breakaway unit from a large business, will actually work closer together, more in harmony with each other, in order to be able to facilitate individual requirements of themselves and of their employees than they will do perhaps in a larger organisation. The flexibility is particularly important in small businesses in order to ensure that they develop and grow in the future. A lot of the good practice that is around is shared from the very large companies to the very small companies. It is sometimes different best practice.

  33. I am very familiar with the red tape argument. That is the first time I have heard that particular argument put so cogently, if I may say so, and especially as the Government is hanging so many of its hats, as you say, upon small business for the jobs for the future, in particular in areas like mine, even though I have got 1,700 employees of GSK in my constituency and they all say it is a very good company, I must say, although not perfect of course.
  (Mr Collinge) We strive to improve.

  34. You would argue that giving individual legal rights would actually make it impossible for business start-ups in particular to achieve the kind of flexibility that they need?
  (Mr Bartley) Yes. I think that, as has been said earlier, there are some undeniable basic rights in relation to employment and I think that it is right and proper that they are in place and protect the workforce, whether it is a big organisation, a small organisation or whether it is in a new start-up or in an established organisation. However, I believe that an element of carrot rather than stick is helpful. If you want to go to a football match, if you support—I do not know—Chelsea—no, Leyton Orient.

  35. Sunderland.
  (Mr Bartley) I will take Sunderland then. If you support Sunderland and you believe in going to Sunderland every week every time they play at home there is a difference between your ability to go and watch Sunderland every Saturday that they play at home. If somebody told you that you had to go and watch Sunderland every week I think that there would actually be a burr against turning up because you had been told to do so. I think there is a difference between a voluntary approach, flexible, and a compulsory approach in relation to many things in life and I think that includes employment and employment legislation.

  36. I think it might have been a better example if you had said should I ever be forced to go and watch Newcastle.
  (Mr Bartley) Only if Sunderland are playing though!

Mr Allan

  37. There are two different pictures of small business and I suspect they both exist. One is the start-up company where everybody is part of a family and they are all working together and they all put the hours in because they all feel that have to stay. The other is the small engineering workshop in Sheffield, many of which I know still exist, where the employee is told to come in on Saturday or he is out on his ear effectively, that is their understanding, and if they are out on their ear they have not got the skills to get another job, where health and safety rules are bypassed, they work with noxious substances and their bosses say, "Quit complaining or you are out on your ear". That kind of business still does exist. Do you recognise that and how do you deal with that? I see these employees who come to me and say, "This is what I have to put up with and if I do not put up with it I have got no job at all", and that is where the long hours are a real problem. How do you deal with that without some statutory framework?
  (Mr Bartley) I do not condone that type of relationship in business. I run a small engineering business which is 80 years old. I would not dream of doing it. I am not sure that using the hammer of legislation in employment in those matters is actually the way to crack the nut. I would suspect, and I have no evidence of it, that using that hammer is likely to be more detrimental to the businesses that are actually doing the right working practices than it will be in causing people to obey rules that already they are not prepared to obey. People who break rules, who do not follow the regulations in relation to health and safety or employment practices, legislating to tell them to do so when case law is out there and basic human rights is out there I do not think is going to make those employers change their minds. What that legislation might do is make the employers who are already doing their best to obey the rules and the rights that people have turn against that in the future. I think it is a very heavy hammer to crack a nut and I think there must be a better way—I do not know what it is—of approaching those businesses that are breaking the rules than necessarily straitjacketing the ones that are obeying them at the moment.
  (Ms Anderson) There is a law of diminishing returns in that if you try and force employers into a legislative straitjacket you will find that you cut off their ability to meet the needs of their own workforce. If you give rights to one group it sometimes makes you reduce on the flexibility that you are able to offer other individuals. There is only so much give and take in a firm. In giving all the rights to parents, for example, you cannot give so much to those individuals, for example, who have elder care responsibilities or trainees who want to take time out to pursue training. The legislative straitjacket is not the right answer. We have certainly seen an increase in employment tribunals and we want to avoid a situation where you have employers and employees taking themselves to court. The best way of solving these issues is by sitting employers and employees down together and seeing whether something sensible cannot be worked out. There will always come a point, however, where the employer has to say, "No, the business need has to come first. I would love to be able to meet your needs but if I do meet them I am not going to be in business."
  (Mr Collinge) I would like to reinforce that view, that employers should have flexibility and have the discussion and try and reach a resolution of each individual issue in a way that makes sense for us, the employer, and then the employee is really the way forward. There will always be bad employers and bad employees in that process and what we have to do is try and have that spirit of co-operation and collaboration in a framework supported by the Government to enable people to work together. As people have already said, people want to have good employees working for them. They want to have motivated employees working for them. That is what drives our businesses. It is not in the interests of employers to behave badly. In the long term they will go out of business if they do.


  38. I recognise all too well the situation that Richard described, which I thought he described very graphically, if I may say so. You have put us in a bit of a dilemma because there are so many small businesses, or at least we believe that there are so many small businesses, who are really prepared to take that kind of risk even though the business case ought to prevent them from doing so. Many of us in our surgeries have to deal with people who are virtually powerless against unscrupulous employers. Some of them may not be small; some of them may be rather larger. How do we actually deal with that situation if you are saying, "Look; we cannot really possibly have a legislative framework because the people who are doing the good job might find that it does not pay to do the good job. They will be in a worse situation."? How do we deal with these employers who are not up to scratch?
  (Ms Anderson) I think it is a question of balance, is it not? There has been a tremendous amount of new employment legislation and I am sure you are fed with hearing of the 16 new rights and the 47 pieces of legislation and the £12.3 billion costs that the Government has introduced. This has meant that there has been a constant plethora of new rights coming in. We do not condone the bad employers who do not do the right thing but there are sometimes issues around employers who just do not know; they have not caught up. Constantly ratcheting up these rights is not going to achieve the desired outcome. We need to let things settle down and we need to ensure that employers are aware of the existing rights. I think the Government has been doing some very good things in many of these areas. For example, when the Working Time Directive came in it set up a hot line for employers and employees and it had a tremendous number of calls. These were not aggrieved employees. They had tens if not hundreds of thousands of calls to these hot lines but they were not employees saying, "My employer is doing me down". They were employees saying, "What are the rights?", and people did not understand what the hell was going on, partly because it was very complex legislation. Neither the trades unions nor ourselves really understood what the meaning of "autonomous workers" was, for example, but it is very complex. The national minimum wage on the other hand is very easy to understand. "You are going to have to pay your employee £3.60, £4.10", whatever it is, and there are very few exceptions or conditions attached to it.

  39. I do not remember the CBI arguing that before the legislation.
  (Ms Anderson) We always commended the Government for the simplicity of the argument, even if we were not necessarily attracted to it in principle. That said, we do now accept that it is there and it is there to stay.
  (Mr Bartley) Can I just add to what Sue has said from a small business perspective? Business works, especially small business works, when people talk to each other. If people talk to each other then resolution of problems or disputes or areas of disagreement has a chance of being worked out equitably. I understand there are good employers who do that at the moment and there are, I am sure, bad employers who do not do so. What worries me first of all about introducing legislation is that it takes that mutuality of interest of resolving a problem away from the workplace and the dynamic of employer/employee relations. That is the first element. The second element is that small businesses need—I keep coming back to this—the flexibility of approach. If the flexibility is not there, if the trust breaks down between employers and employees, if the employer has to reach for the rule book because the employee has brought the rule book in, albeit the law rather than working practice employment, that is going to make it more difficult for the small businesses to employ more people, to return a better profit for the investors, for the shareholders, and to be able to work for the Government, for UK PLC, in the future. One of the real problems that we have as a small business about the legislation that has come in, and I will not repeat Susan's figures for the record, is that there has been so much that employers have to read or understand that comes from their trade associations, from the CBI, from the newspapers, from other sources. Small businesses do not have to apply that every day. What happens is that everyone glances through it, looks at it, understands it, puts it on the shelf. Let us take maternity pay, for instance. If there is then a change some time in the future, that change may well be read and understood at the time and put on the shelf. Once you actually have to introduce, because of circumstances in business, maternity pay, what you have read and learned beforehand is actually of no relevance whatsoever. It might be three years down the line, it might have changed two or three times, the value might have changed, so you have to go out and find out information. The comment was made earlier about the fact that not everybody knows about things, not everybody obeys the rules. Part of the reason that employers do not obey the rules is that, whilst they may have heard of them and whilst they may wish to obey the rules, they are now so complex and there are so many that it is difficult in a day when you are chasing debtors, looking for the next order, paying creditors etc, to pull out of the back of your brain what you are meant to be doing. That of course makes it a bigger problem than instantly resolvable. It has to be said in many cases, and in doing some research for coming here today, talking to other members of the SME Council, there are cases where it is almost impossible to go and find out what you are meant to be doing as an employer. I have a colleague in the SME Council who approached over maternity pay the Employment Service, the DSS and the Small Business Service to find out what he was meant to do. None of them could give him an answer as to what he had to do as an employer. In the end what he had to do was to find a solicitor, pay the money to the solicitor, which is non-beneficial to the running of the small business. The right was given but it is sometimes worth bearing in mind that small businesses do not have internal resources to be able to satisfy every single employment requirement at the drop of a hat. There is a cost.

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