Gerry Sutcliffe MP

CIPD Annual Conference

Today I want to talk about the culture of workplaces, because by maximising potential in the workplace, we can boost prosperity for everyone in the UK.

The competitive challenges facing businesses today are greater than ever. Customer demands are higher; the 24/7 society is a reality. And technology and information are driving change faster than ever before.

The UK cannot compete in a global economy on low value added products and low skill jobs. Wage costs in China are one fifth of those in the UK.

We need to use knowledge and innovation to compete; and improve the skills and motivation of our workforce to deliver them.

For many businesses - this will require a radical culture change. My department is working to support that change by:

Improving skills;
Fostering partnership; and
Increasing fairness in the workplace.

I'll concentrate my thoughts on these three areas today.

Last year the Government launched the national Skills Strategy, '21st Century Skills'.

Today the Skills Alliance publishes its first annual report on progress towards are key ambitions to ensure:

That employers have the right skills to support the success of their businesses, and individuals have the skills they need to be both employable and personally fulfilled.

Although still at the start of our journey, there is now a real momentum for change, and a strong sense of shared purpose and enthusiasm. Organisations such as the CIPD, and you the personnel practitioners, are essential to help us fulfill this task.

Business needs to recruit people with the right skills. And it needs to keep them. Skilled employees are more likely to stay if they are treated fairly, feel valued, and are provided with choice and flexibility in the hours and way they work. Staff will be more committed to company objectives if they are properly involved in decisions through effective information and consultation.

Which brings me to my second point -

Last summer we consulted on draft legislation to implement the Information and Consultation Directive. The responses we received during the consultation and at the various road shows held around the country have proved enormously helpful in developing the legislation. I am pleased to announce that today we are publishing on the DTI website a Government response to the consultation along with revised draft Regulations. We are also launching a consultation on draft guidance on the legislation. The guidance is intended to be a plain explanation of the law. We have tried to make it straightforward and clear and we welcome your views on it. We intend to publish final guidance later in the year at the time the Information and Consultation Regulations are laid before Parliament. ACAS will also be publishing their own guidance. This is of a "best practice" nature, aimed at helping organisations make the most of the legislation and it should be available later this month.

I know that many organisations are already looking at the need to revamp and refresh their current arrangements. I very much support these initiatives and hope the guidance being published today will act as a further stimulus. Indeed, I would encourage firms of all sizes to put arrangements in place now without waiting for the legislation to come into force.
Information and consultation doesn't just benefit employees. The way companies manage their people can make a big impact on the performance of the business and the way it is viewed by shareholders and potential investors. That is why we are proposing that companies preparing the new Operating and Financial Review should include information about employees, where it is relevant to an understanding of the company's past performance and future dynamics.
We want to see high performance workplaces where employees are informed, involved and committed to the success of their business - not just because it's good for employees - but because it is essential for creating prosperity for all.
Trade unions are key partners in many workplaces and just like businesses they need targeted support to speed their adaptation to changing labour market trends. Encouraging unions to adapt more quickly will ensure that they play their full and considerable part in building productive relations at work.

Earlier this year, I tabled an amendment to the Employment Relations Bill, which we intend to use to establish a Union Modernisation Fund.

The Fund would be used to support innovative projects that would not otherwise take place, such as help with training for union representatives in the area of business and people management. This would help promote the development of high performance workplaces.

Preliminary discussions on the design of the Fund are taking place with unions, employer representatives and other key organisations, including the CIPD and I'm grateful for your input. Subject to Parliamentary approval, we will publish for full public consultation the draft rules and procedures of the Fund later this year.

Trade Unions can make a real impact promoting fairness in the workplace - the final point I want to cover.

People are the essential ingredient of a good business. And we need to support them at work with the right regulatory framework to ensure that they are treated fairly. Since we came into power in 1997, we've introduced fair employment standards to eliminate bad practice and to increase participation in the labour market. It is right, for example, that part time workers should be on an equal footing with their full time colleagues. And that parental leave should be an option for working parents.

And we've made these changes without damaging the competitive advantage of the UK economy.

We've got the best employment record in Europe. Over 28 million people in work. The lowest unemployment rate for twenty years.

But we are not complacent. This good record masks some lower participation rates for particular groups in society: older workers, some ethnic minorities, lone parents, the disabled and there are regional disparities. This means that the right people might not be in the right jobs, resulting in wasted human capital and lower productivity.

The CIPD played an important part in helping us shape the 2003 working parents laws and as their research on flexible working shows, the legislation is having a positive impact.

We're now identifying the issues we need to consider in the future through a series of ministerial roundtable discussions between employers and employees this Summer and I am grateful to the CIPD for hosting a roundtable in Scotland.
We want to hear about how individuals are balancing their caring and work responsibilities and encourage dialogue about potential future options that meet both individuals and employers needs.

But our commitment to make no further changes before 2006, after we've reviewed the impact of the current laws, still holds good.

But we have to recognise that even in the best workplaces, disputes develop between individuals and their employers. When they do, it is in no-one's interests that they should drag on. Disputes involve a great deal of management time and legal costs if cases go to Employment Tribunals. Individuals who are forced to bring such cases rarely find they earn as much in new jobs, when they get them, as they did in the old one. We must improve the way that employees and employers work together to tackle disputes.

A package of new measures to improve dispute resolution in the workplace will come into effect on 1st October. All designed to promote the resolution of employment disputes, and reduce the incidence of legal action.

So there are my three points where we are taking action - on skills, on partnership and on fairness at work.
I don't underestimate the difficulties that many businesses face so we are trying to help wherever possible. We're providing easily accessible information, advice and guidance on the new businesslink.gov.uk website, with an interactive section on "employing people".

It's a mine of information and it's already attracting over 400,000 visitor sessions a month, over 30% above target.
As well as improving information and guidance, DTI is offering practical help in employment "best practice" to all employers wishing to find out how to improve their performance through better ways of working. Including finding out how other businesses like them have achieved it.

The new Commission for Equality and Human Rights will provide a customer-focused service, providing information, advice and guidance to employers and service providers on their obligations across the whole breadth of discrimination legislation. Replacing the three existing equality Commissions, and providing support for the new Equal Employment Equality regulations, the new Commission responds to the strong demand from employers for a single streamlined point of access. The new Commission will work with employers on a partnership basis to improve understanding of the business case for diversity, delivering economic and social benefits to society across the board.

In DTI, we will continue to change domestic employment law only on two dates in the year - 6 April and 1 October - and publish annual statements of legislation - to give employers, employees and their advisers' time to prepare. The Small Business Service is currently consulting about the feasibility of introducing common commencement dates for other new regulations that may affect business. You have until 3 September to contribute your views - please do - it really does make a difference.


In closing, I would like to say thank you to those of you who attended the CIPD events on the information and consultation directive. You've really made a great contribution.

And I want to thank Duncan Brown and his colleagues for their invaluable advice, which helps me to get a clear picture of what concerns you.

We've got some great businesses in the UK and their success is partly due to the influence that you have on their culture. We need to work together to raise every business to the standard of the best and ensure that every workplace in the country is peopled by high skilled, fulfilled employees, working in partnership to create a successful business, safe in the knowledge that they are treated fairly and with respect by their employers. I think it's a goal we can achieve.