Securing jobs and working conditions after Brexit (Karen Steadman, Work Foundation)

 

Karen Steadman, Policy and Research Manager (Health, Wellbeing and Work), the Work Foundation

The implications for businesses have been central to discussions on the UK’s departure from the EU. Changes in business rules and regulations aren’t just matters for shareholders – at the centre of all businesses are the people who work in them. Any rule changes will likely have complex implications for current (and future) UK workers. Given what is known about the relationship between work, work quality and health, should workers’ post-Brexit rights be seen as a public health issue?

Compared with other EU countries, the UK has a low rate of unemployment and an above average rate of employment., How much of that employment is ‘good work’ is debatable, but data from the European Working Conditions Survey suggest that the picture is not too bad. The UK looks comparatively good on many workforce measures including permanency of contracts, prospects for advancement, having the right skills and feeling recognised for doing a good job. Countries in the UK also compare well against many EU countries on the impact of work on health; although with 22% of the population saying their work negatively affects their health, there is clearly more progress to be made.

The EU’s role in UK workers’ rights

To what extent have EU provisions influenced UK workers’ protections and rights? The primary EU provision here is the European Social Charter, which, when adopted in 1961, set out a course of protections to improve the living and working conditions of EU citizens. When the UK signed up in 1997, it included directives on: equal pay; maternity rights; sex, disability and race discrimination; and health and safety. The charter precipitated many of the rights considered normal in the UK today. These are (for the most part) widely supported, while several, such as annual leave requirements, surpass the minimum level required by the EU.

What has been contentious is whether the EU should have a role in social and employment legislation. It is not possible to know whether a UK outside of the EU would have taken the same path on employee rights – the subsequent changes in policy and in society are so interwoven as to be barely distinguishable. There are exceptions though, as some EU-led provisions remain contested, and as such are ‘vulnerable to attack’ in the future. As outlined below, these could have implications for the health of the UK public.

Rights for agency workers: the Agency Workers Regulations 2010 (implementation of the 2008 European Temporary Agency Work Directive) provide agency workers who have been in place for 12 weeks with equal rights as directly employed staff at the same organisation, including in terms of pay and sickness absence. With agency workers often found in lower skilled occupations, they are potentially more vulnerable from a health perspective. There is some evidence indicating links between temporary work and poorer psychological health. Reducing workers’ access to core sickness benefits might be a source of stress, and may reduce the incentive for taking time off to recover when ill, or to seek timely medical support – actions that might allow for earlier intervention and prevent worsening health.

Limits on weekly working hours: the Working Time Directive guarantees terms such as a maximum 48-hour week and four weeks’ paid holiday per year, plus rules on the number of hours of rest for shift workers. After much debate, the UK opted into this in 1998, with the caveat that individuals could opt out. The rule has been particularly contentious in medicine, where it was argued that there should be more flexibility in what are counted as working hours during training. With longer working hours associated with poorer health outcomes, and particularly enhanced risk of coronary heart disease and stroke, the protective element of this directive for health is clear.

Promoting employee voice: the Information and Consultation of Employees Regulations (ICE), based on a 2002 EU industrial relations directive, promote the rights of workers to receive information and be consulted on changes in their organisation that could affect their jobs, or terms and conditions of employment. ICE was contentious with business groups, which argued that it would intrude on individual business policy. Though not clear cut, it has been suggested that there has been some impact on organisations’ consultation processes (whether new or modified existing provisions) since the directive came in. The regulations currently only apply to organisations with 50 or more employees, and require the support of 10% of employees. Having greater control over the nature of and decisions about work is associated with better health, wellbeing and job satisfaction and is a criterion of good work.,,

Racing to the top and the bottom

This leads us to what appears to be the biggest risk – polarisation. Though many employers have embraced and are striving for better quality work to enhance competitiveness, what about those who are seeking to be competitive through other means, particularly through doing the minimum and undercutting the competition? EU employment law sought to create a level playing field and provide safeguards to ensure that member states do not use workers’ rights and protections as bargaining tools. This reduces the risk that members of the single market compete by offering lower wages and fewer protections for workers.

Concerns about the potential for increasing polarisation of the UK labour market were highlighted in recent research by the Work Foundation for the TUC, which examined the potential impact of Brexit on the UK’s ability to attract foreign direct investment. The available information suggested that in the event of the UK leaving the single market, the risk of devaluing workers’ rights is greater at the lower end of the labour market, where there might be increased incentives for UK businesses to ‘undercut’ those in the EU in order to enhance their competitiveness. Could the weakening of safeguards allow some companies to engage in a ‘race to the bottom’ for employee rights, to reduce costs and offer contracts on the cheap?Again, concerns about workers’ rights post-Brexit are most pertinent for those in specific areas of the labour market, including low-skilled workers, agency workers and the self-employed.

Could shifts in the UK workforce encourage better working standards?

Is there potential that Brexit could offer opportunities to policymakers for improving work and health? One such area is the distribution of state aid. This is currently governed by the European Commission, which acts to prevent the funds being used to distort competition and create unfair national advantage. This provision has been a subject of long-term criticism from some charities that feel it doesn’t address the real issues with competition.

If EU restrictions on state aid were removed (although this is unlikely to be accepted by the EU under any future partnership agreement), the UK would be free to provide aid funding in a way that better fits local needs. This would potentially enhance opportunities for funding of charities and social enterprises working in deprived communities. It would, however, remain to be seen whether this would translate into significantly higher levels of public investment, given the UK has traditionally provided lower levels of state aid per capita than other European countries.

Given how little is known about what Brexit and its implications will look like, we can perhaps be a bit more ambitious with conjecture. Is it possible, for example, that in the event of a flight of EU workers (as possibly seen already in new nursing registrants,) more opportunities will become available for UK workers in the medium term? Leaving aside economic arguments about lump of labour fallacy for the moment, is it possible that employers will fight harder to attract and retain employees, and therefore actively raise standards in order to appeal to a smaller pool of workers? Might this persuade employers to be more progressive in terms of job quality, support and flexibility – potentially enhancing opportunities for those with health barriers, older workers and those with caring responsibilities? Decisions yet to be made about freedom of movement for EU citizens and skilled immigration requirements will of course also impact here, as will how the UK will invest in education, training and skills for residents.

What the UK does to offset any harms is as important as discussions about the implications of the unknowns of Brexit. In terms of health, work and inequalities there has been a great deal of activity of late. Indeed, there is an increasingly coherent drive to sustain and promote good work to improve both health and productivity. The recent report of the Taylor review of modern working practices placed ‘good work’ at its centre, and set out a series of steps for how work quality can be improved in a changing UK labour market. The report called for the UK’s national strategy for work to be ‘explicitly directed toward the goal of good work for all’, thus securing a baseline of rights for all types of workers. Interestingly, it specifically included a call to extend ICE to all employees and workers, and for the support threshold to be reduced to 2%.

There are other promising signs. The recent Department for Work and Pensions and Department of Health’s joint strategy, Improving lives: the future of work, health and disability, makes explicit reference to ‘good work’ (rather than any work) as important for health. The recent industrial strategy, setting out the UK’s long-term vision for sustainable prosperity, also claimed that the government shares Mr Taylor’s ambition for good work. Time will tell whether these positive words translate into action.

What is known, is that uncertainty and insecurity in the labour market is unlikely to be good for businesses or for worker health. There must be a focus on what can be controlled: with recent policy changes indicating that a consensus is forming around the importance of good work, could this be a way of protecting workers from the perceived risks of Brexit? Being clear about what the UK wants from and for its workforce is the most important thing for negotiators to consider as talks progress.


††† In economics, the lump of labour fallacy is the idea that there is a fixed amount of work to be done within an economy, which can be distributed to create more or fewer jobs. It was considered a fallacy in 1891 by economist David Frederick Schloss, who held that the amount of work is not fixed.

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