From the TUC

Shares for rights: Humiliating defeat for government

21 Mar 2013, by in Working Life

The government has been roundly defeated in its attempts to induce workers to sell their basic employment rights for a handful of shares in the company for which they work. This was a flagship policy announced with much fanfare by the Chancellor in his speech to the Conservative Party Conference. The idea was being introduced in the Growth and Infrastructure Bill which, having been debated in the Commons, is now making its way through the Lords.

Last night the measure was debated by their Lordships and was thrown out in a humiliating 54 vote defeat for the government on an amendment tabled by a crossbench peer, a Liberal Democrat peer, a Labour peer and a Lord Bishop. Even former Conservative Cabinet ministers got up to speak against it, and a former Conservative Chancellor, Nigel (now Lord) Lawson voted against it.

There were some powerful speeches from their Lordships and the selection of quotations below gives you a flavour of what they had to say.

Lord Pannick, a crossbench peer and former Deputy High Court Judge said;

“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.”

“The irony, of course, is that the worse the job market for employment, the more willing the applicant will be to give up his or her employment rights in order to take the job, and the worse the job market, the greater the employee’s need for these basic protections against unfair dismissal and redundancy.”

And he quoted Lord Deben, the former Conservative Cabinet minister John Selwyn Gummer, who elsewhere had said;

“I cannot imagine any circumstances whatever in which this would be of any use to any business that I have ever come across in my entire life.”

Baroness Brinton, a Liberal Democrat peer and former venture capitalist said;

“The founders of [existing SMEs] have been offering shares without any removal of rights for years, and it works. Why would they take up a proposal that destabilises the employee and the company?”

“Clause 27 eliminates the use of unfair dismissal tribunals which help SMEs by placing a cap on the costs of discrimination claims.”

The Lord Bishop of Bristol said:

“Permitting companies to purchase certain rights in this way seems ethically wrong in principle.”

“Basic safeguards against unreasonable employer behaviour should not have a price tag attached to them.”

“I expect therefore that many workers who find themselves in the employee shareholder category will be those who are most vulnerable to poor employment practice, where the imbalance in power and financial means between employer and employee is most marked. Employment law is effective precisely because it constitutes a coherent framework based on clear principles of fairness and responsibility. Allowing companies effectively to buy off those rights undermines the integrity of that framework.”

Conservative peer and former Conservative Cabinet Minister, Lord King of Bridgewater said;

“I have not found anybody yet who is in favour of the proposal or who says that they think that they will use the provision.”

“The opportunity provided by Clause 27 could be used by some very dubious employers indeed, and a large number of their employees could be deprived of their employment rights.”

And he was followed by Lord Forsyth of Drumlean who, as Michael Forsyth MP, was a cabinet minister in Mrs Thatcher’s government:

“My Lords, I think that this is a positively dreadful clause.”

“The clause is an absolute gift to the Gradgrinds of this world because they will be able to use it to force people to give up employment rights, which are essential … “

Unions have been campaigning strongly on this issue, so it was not surprising that Labour peer Lord Morris of Handsworth who was formerly Bill Morris the General Secretary of the TGWU got up to support the amendment, saying:

“What is needed in the workplace is good industrial relations. Indeed, someone should tell the Chancellor that you cannot build a world-class economy by creating first-class and second-class workers. Under these proposals we would have two groups of workers: workers with rights but no shares, and workers with shares but no rights.”

“When will the Government understand that some things are not for sale? Workers’ rights are not for sale. They cannot be traded. Dignity at work is not for sale and cannot be traded. The fight against injustice is not for sale and cannot be traded.”

Altogether 10 Conservative peers, including 5 former Cabinet Ministers, and three Liberal Democrat peers voted against the bill, with many others normally staunch supporters of the Coalition Government staying away.