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Pat McFadden MP, Minister for Business, Innovation and Skills
London, 06 February 2008
Good morning everyone and thank you Ed for your kind introduction.
I’d like to begin by welcoming you to your new role. Starting any new job is a challenge, especially one as important as this. But, I know, that with your expert knowledge and experience of working in employment relations you’re the right man for the job, and will be a major asset to Acas.
Economic stability has been vital to the increased prosperity, employment and rising living standards over the past ten years. Government will not take risks with economic stability and there is a vital role for Acas and CIPD in maintaining business success.
It is in the nature of the work Acas does that their success is often unsung. This is an organisation that plays a vital role in sustaining UK business success. Recent research from the National Institute of Economic and Social Research showed that for every pound Acas spends, over £16 is returned. That equates to benefits worth almost £800 million a year to UK companies, employees and the economy. This is a significant and vital contribution. The Chancellor of the Exchequer would like to add his thanks and appreciation for what you do.
It is highly appropriate that you are joining forces with the CIPD today. With over 130,000 members, they are a highly influential and effective organisation promoting good practice in business and people management.
The CIPD’s contribution to Government policy in areas as critical as welfare to work, flexible working and skills is invaluable and greatly welcomed.
In today’s fast-moving, intensely competitive and often uncertain world, your conference theme – the link between successful employment relations and productivity in the 21st century- is hugely important. The classical theory of labour relations, where labour and capital were in irrevocable opposition, has been turned on its head. Today business must make the most of the contribution of its workforce.
The Government has tried to reflect this in its employment changes.
Over 600,000 new businesses have been created. Investment in the UK continues to grow. The latest employment figures show record numbers of people in work, and all of them have more rights in the workplace than was the case 10 years ago. And still the lowest numbers claiming unemployment for over 30 years.
These and other figures show you don’t have to trade economic success for social justice. That ensuring a progressive society – with access to basic employment rights such as a minimum wage, entitlement to statutory leave and family-friendly policies such as extended maternity and paternity leave – is at the heart of guaranteeing sustained and growing prosperity.
At the core of this success, is the strong partnership we’ve built between government, business, trade unions and people at work. And the work of organisations such as Acas to help all three groups achieve more, and address the issues that matter.
But as the world of work evolves in this century, so too must the procedures and systems we have in place to empower employees, and support business.
The UK’s best chance for even greater success in the future depends on us winning the race to the top, not the bottom. In having as many of our people ready and able to work on the best ideas, and deliver the best results.
Whether dealing with challenge or opportunity, we need flexibility, confidence and innovation.
Employers and their workforce should always strive for a positive relationship. And when communication breaks down, we need effective, early action to tackle the problem.
Creating a modern, dispute resolution system is central to this relationship. It is one of our key employment relations reforms, and will impact on the work of Acas, to the benefit of employers and employees.
Since 1997, working with Acas and other relevant bodies – we’ve worked hard to strike the right balance between ensuring workers can protect their rights through the tribunals if that is necessary, but wherever possible, more people and businesses can benefit from resolving these disputes early, in the workplace, without undue complexity and undue cost.
Acas’ role in dispute resolution has also evolved – with greater emphasis placed on preventative advice and guidance, and Acas’ statutory remit to conciliate in individual disputes becoming an increasingly significant part of its work. Only 27% of Tribunal claims cleared in 2006/07 went to a formal of a Tribunal Hearing; nearly three quarters were settled, or withdrawn following Acas conciliation. And, in addition, Acas brokered a settlement in more than 57,000 potential claims in that year, which would otherwise have had to be processed and possibly heard by the Tribunals.
This is a good record but we can do better. It is important for Government to admit when change has not worked. This is what we have done with Gibbons. The Gibbons’ Review found that although some of our reforms to dispute resolution - in particular the 2004 statutory “three step procedures” were right in principle and well motivated - they had in reality increased complexity and costs, and prevented some disputes from being sorted out quickly and informally.
Following the Gibbons report, we knew we had to act. We held consultation events across the country to find out what employers, employees and organisations such as Acas and the CIPD thought we could do better. Thank you for your contributions .
Our direction is clear. We want a dispute resolution system where productivity is raised through improved workplace relations; where access to justice is ensured for employees and employers; where the cost of resolving disputes is reduced for all parties; where disputes are resolved swiftly before they escalate and where employment rights are not diluted.
Our reform package has been designed therefore to help you and employers resolve disputes at an earlier stage and improve the way employment tribunals work.
Although some cases will always need to go to an employment tribunal, where possible we want employers and employees to do all they can to resolve more disputes before they get this far.
We have developed this package with the advice, guidance and support of organisations like ACAS and CIPD, and its members, to create a robust, innovative and flexible systems.
That means:
So what is the impact of all this on Acas and its role. Acas’s role in helping people sort out their disputes will become still more important once the statutory processes that are currently in place have gone. It will be even more important that there is good information and guidance on sorting disputes out, and there will be an increased demand for conciliation in the early stages of disputes.
The revised Acas statutory code on grievance and discipline will set out clear principles to help employers and employees to work with these new discipline and grievance procedures.
We are clear that any additional role for Acas in a reformed system will need to be funded. I am happy to announce today that we will invest up to £37 million over the coming three years to enable Acas to deliver key elements of the new dispute resolution system.
This funding will allow Acas to conduct pilot programmes of conciliation in the early stages of disputes over the next year with the aim of making this service available at the same time as other changes come into effect.
The Acas helpline is already doing a good job, but this will also fund an expanded and enhanced helpline and advice service. The expanded modernised Acas advice service will be widely promoted and have more capacity to provide employment advice to employers and employees and their representatives than the current Acas helpline does.
Acas’s role will be enhanced in the Employment Bill, now going through Parliament.
It will remove fixed periods for conciliation, enabling Acas to conciliate at any time until a tribunal reaches its verdict. This will help more people reach an agreement to sort out their dispute.
It is part of a wider package of improved employment measures, we want to introduce, to create an employment relations system fit for the 21st Century.
In addition to the changes we are making to dispute resolution, the Bill will see new penalties introduced for all businesses not paying workers the minimum wage. It will also boost powers for employment agency inspectors and increase penalties for agencies which illegally exploit workers and undercut legitimate businesses.
Our overall aim is to simplify and strengthen key aspects of UK employment law for the benefit of individuals, employers, trade unions and the public sector - increasing protection for vulnerable workers, whilst lightening the load for the majority of law-abiding business.
The Bill will therefore take us another step forward. Making sure we have the right legislation in place to ensure our workplaces are fit for the challenges ahead and enabling Acas to play a still greater and more effective role in our economy.
Working together, we can deliver fair, productive workplaces that can deliver a prosperous society. I believe that this is a positive package – a more flexible system, an increased role for Acas that will be properly funded. Thank you for all the work you have done and I ask you to rise to the challenges of the future. I am proud of the role you perform and the way you have discharged your important responsibilities. I hope you are too.
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