Tuesday 23 April 2013

Rights for Shares: No Mandate, Unwanted, Rejected

Michael Fallon
George Osborne has maintained his stance to weaken worker protections in exchange for shares. In doing so he exposes himself as utterly undemocratic, and highlights the need for the unions to regain some strength. 

The latest chapter of the undemocratic tale that threatens to shred hard-earned worker protections is about to reach a conclusion. The Lords have just voted for a second time to reject plans to swap protections for shares, a policy rejected by business as unworkable and unwanted.

The process began when David Cameron asked Adrian Beecroft, a venture capitalist; a funder to the Tory party and investor in pay-day lender Wonga, to write a report on ways to grow the economy. The report focused largely on how difficult it is to dismiss someone, and that the process 'makes it too easy for employees to claim they have been unfairly treated'.

This point is a nonsense as in comparison with many other European states, the UK has a low rate of employment litigation as stated in a report called 'A review of employment dispute resolution in Great Britain'. Tribunal claims increased largely once the recession kicked in and this was not the fault of those left in poverty through losing their jobs.


The idea to remove rights for shares appears to have spun off from the Beecroft report, which in turn led to a consultation – a now useful tool abused by politicians to pretend they are listening when in reality they have already made up their mind.

In this case, the consultation which included individuals from small and large companies rejected the policy almost wholesale. Accountants Grant Thornton who is heavily involved in public sector work responded to the consultation with this:

‘Our view is the people most likely to benefit from these arrangements are very senior employees who do not rely on their statutory rights for their job security/protection.’

On the question of whether their organisation ‘would take up new status?’ the response was even more damning.

‘Our organisation has a commitment to social justice and gender equality…we would not use Employee Owner contracts of the kind described in the consultation as they involve a loss of fundamental employment rights…’

East Leeds Citizen’s Advice Bureau also made it clear that large swathes of the employment sector would not participate:

‘It seems highly unlikely that ethical employers will use a scheme which undermines fundamental employment rights.’

We would hope and expect ethical employers to not participate but so flawed and nasty is this policy, big business is also rejecting it. Justin King the boss of Sainsbury’s told a grocery industry conference "The population at large don't trust business. What do you think the population at large will think of businesses that want to trade employment rights for money?...This is not something for our business."

Rejection…so what!

The changes were not mentioned in either coalition party manifesto, they have no democratic mandate and in addition the consultation results have been utterly ignored.  So what!

The official response to the consultation said "A very small number of responses welcomed the scheme and suggested they would be interested in taking it up," Michael Fallon the Conservative MP for Sevenoaks who led the explanation and amendments on the Growth and Infrastructure bill in the Commons said "This government consult and listen to the consultation…There will be guidance on the operation of the scheme. It is a new one and that is why, perhaps, it has not yet been universally acknowledged or as widely supported as it might have been. ".

The arrogance of a government that chooses to ignore everyone and then suggest they listen is unfortunately par for the course. They are deeply undemocratic and through their behaviour weaken democracy.

Lords kick it out

The government has now seen the Lords kick out the policy for the second time with the Liberal Democrat peers unified with Labour in rejection of the bill unlike their Commons counterparts. The fact that it has got to this stage is of deep concern and it must be asked at what point will it take for the unions to come out on strike in protection of these fundamental protections? This attempt to remove rights in a dramatic fashion and yet protests have been limited to 15-minute protests.

The next stage will see further concessions put to the Lords, but the bill should not have arrived at this point in the first place. Our democracy is under attack, our rights threatened and unless the workers reclaim the power required to stand up against these most arrogant of people, then we can wave goodbye to the protections fought for with blood and tears.

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