[IER] Lords ditch shares-for-rights proposals: a win for workers, but is this the end of such bonkers ideas?

[Sarah Glenister]

<http://www.ier.org.uk/news/lords-ditch-shares-rights-proposals-win-workers-
end-such-bonkers-ideas>
http://www.ier.org.uk/sites/ier.org.uk/files/images/Logo.GIFLords ditch
shares-for-rights proposals: a win for workers, but is this the end of such
bonkers ideas?


21 March 2013

The House of Lords has voted to remove Clause 27 of the Growth and
Infrastructure Bill, which would legislate to allow employers to offer
shares in their organisation to workers in return for the right to claim
unfair dismissal, to be paid a redundancy settlement and to request flexible
working and training.

Yesterday (20 March 2013), the proposals were debated by peers in the Bill's
third day of Report Stage, receiving criticism not only from Labour lords,
but also from those connected to the Conservative and Liberal Democrat
parties.

"In my eight years in the House I have never witnessed a government policy
with less support not only in Parliament but within the Government
themselves," Lord Adonis (Labour) said.

"To remove this clause today would be an act of mercy to the Government, let
alone to the employees adversely affected by it," he added.

Amendment 50 to leave out Clause 27 of the Bill was moved by Lord Pannick
(Liberal Democrats) who gave four main criticisms of the policy: That it
unfairly weakens workers' rights, that jobseekers can be refused a job on
the basis they refuse to forsake their rights for shares, that it will
"negate trust" between employers and employees, and that workers would not
receive independent legal advice to help them understand what they the
impact of them of giving up their rights.

"Employment rights were created - and have been protected by all
Governments, Conservative and Labour - precisely because of the inequality
of bargaining power between the employer and the employee. To allow these
basic employment rights to become a commodity that can be traded by
agreement frustrates the very purpose of these entitlements as essential
protections for the employee, who lacks effective bargaining power," Lord
Pannick stated.

Indeed, the Institute of Employment Rights has emphasised the dangers of
Clause 27 since it was announced by George Osborne last autumn. It was
quickly slotted into the Growth and Infrastructure Bill after a rushed
three-week consultation, in which 92% of a total 209 respondees opposed the
idea. Critics were not limited to those campaigning for workers' rights, but
also from business associations, which warned that only rogue employers
would see a use for "employee-ownership" of this kind.

Other criticisms have included the tax loopholes the legislation could throw
up, which would allow further immoral corporate behaviour of the kind
frequently splashed across the newspapers in the past year.

Even Lord Forsyth of Drumlean, a Conservative peer, said Clause 27 was "an
absolute open goal to allow the setting up of a huge tax-avoidance scheme".

While it is of course great news that the Lords has sided with the rights of
workers on this proposal, this may not be the end of Tory policies designed
to disintegrate employment rights.

Director of the IER Carolyn Jones warned: "The 'rights for sale' was always
a bonkers idea, and one the IER are keen to see kicked into the long grass.
But as our  <http://www.ier.org.uk/resources/coalition-timeline> Coalition
Timeline shows, even bonkers ideas are often resurrected by this
ideologically driven government so we need to remain ever vigilant."

 

 

Sarah Glenister

IT Development and Communications Assistant

Institute of Employment Rights

4th Floor, Jack Jones House, 1 Islington, Liverpool, L3 8EG

0151 207 5265

 

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