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FAIRNESS
AT WORK
CHAPTER TWO
Modern
Business at Work
Modern
Companies
2.1 Britain has more than a million businesses
which employ people, ranging from the smallest with one or two employees
to multi-site, international companies. The Government has taken
a range of steps to assist British business. These include promoting
economic stability, including giving operational independence to
the Bank of England, keeping tight control over public finances
and establishing a tough target for low inflation; setting the lowest
rate of corporation tax in Europe; reforming the competition laws;
reinvigorating the Private Finance Initiative; and introducing the
right to interest on late payments. All these and further measures
will help improve the performance and prosperity of British companies.
2.2 The
best modern companies, whether large or small, have some things
in common:
- they seek
to harness the talents of their employees in a relationship
based on fairness and through a recognition that everybody involved
in the business has an interest in its success;
- they ensure
that everybody understands the business so that change is readily
accepted and implemented, not feared;
- they set
clear objectives for employees but also encourage them to exercise
their initiative and to contribute their ideas to the development
of the business; and
- they develop
the workforce through training and work experience to respond
to and lead change.
2.3 None
of this is easy for business. The pressures of global markets,
hierarchical management attitudes and short-term approaches to
costs and profits can all be obstacles. The values of the company
have to be maintained in lean times as well as when business is
good. The rewards for employees, in terms of the quality of work
and job security as well as of pay, are great but so are the demands,
particularly for those not used to rapid change.
2.4 But
despite the difficulties, the returns from effective partnership
to the business and its employees are real whether it operates
in local or global markets:
- where they
have an understanding of the business, employees recognise the
importance of responding quickly to changing customer and market
requirements;
- where they
are taken seriously, employees at every level come forward with
ways to help the business innovate, for example by developing
new products; and
- where they
are well-prepared for change, employees can help the company
to introduce and operate new technologies and processes, helping
to secure employment within the business.
2.5 In
modern businesses relationships at work are flexible and tailored
to the size and culture of the company or organisation. Sometimes,
they are provided by a partnership between employers and trade
unions which complements the direct relationship between employer
and employee. On the other hand, some organisations achieve effective
working relationships in other ways.
2.6 The
Government believes that each business should choose the form
of relationship that suits it best. But the freedom to choose
must apply to employees as well as employers, otherwise any commitment
will be hollow and will neither create trust nor underpin competitiveness.
This means that employers should not deny trade union recognition
where it has the clear and demonstrated support of employees.
2.7 Spreading
good practice from the best organisations to the rest requires
a change in the culture of employment relations. This will take
time. But the Government is committed to bringing about such a
change because it will benefit employees, business and our national
competitiveness. It is therefore helping to spread the message
about the achievements of the best companies, whether large or
small, to explain that change need not be feared and to show there
are real opportunities for business growth. To help employers
and employees make informed choices the Government already produces
guidance material on employment laws. It is now carrying out research
into work-based partnership to identify examples of good practice.
In addition, the Government intends to make funds available
to contribute to the training of managers and employee representatives
in order to assist and develop partnerships at work.
2.8 Locally,
Business Links are able to provide guidance themselves or to direct
employers to appropriate sources of advice. The independent Advisory,
Conciliation and Arbitration Service (ACAS) also produces guidance
material and works with employers and employees to help them modernise
their employment practices. The Government believes ACAS should
give more emphasis to such work and will examine how it can do
so in its five-yearly review of the Service later this year.
Britain’s
labour market
2.9 Britain’s labour market has seen large-scale
structural changes. Global competitiveness and technological innovation
have combined to alter traditional labour market patterns. Many
of the changes have made a profound impact on the labour market
in Britain.
2.10 In
many cases, these changes bring real and tangible benefits in
terms of greater opportunity and higher employment. Britain needs
a flexible and efficient labour market in which enterprise can
flourish, companies can grow and wealth can be created.
2.11 But
in some cases the scale, speed and scope of labour market change
has led to higher unemployment, and for those in work, greater
insecurity and even fear. Unemployment is still too high - in
Britain, and across Europe. Social exclusion is extensive, especially
among particular groups of individuals. Unemployment in some families
now crosses generations. One in five households in Britain - many
more in some parts of our country - now have no-one in them in
work.
2.12 For
those in work, the Government has two key objectives for the labour
market: efficiency and fairness. We want to see efficiency because
we want people to work well enough and hard enough to generate
prosperity for the country as a whole. And we want to see fairness
because people at work deserve to be treated decently - and they
perform better when they are. Efficiency and fairness are wholly
compatible. It is perfectly possible to have a modern, flexible
and efficient labour market which is both a vital engine for economic
growth and business output and a means for people to find well-paid
and satisfying jobs.
2.13 The
keys to securing efficiency and fairness are employability and
flexibility. Employability means ensuring that people are well
prepared, trained and supported, both initially as they enter
the labour market, and throughout their working lives. Flexibility
means businesses being able to adapt quickly to changing demand,
technology and competition. By enabling business success, flexibility
promotes employment and prosperity. Companies which work with
their employees to raise productivity and enhance customer service
above the levels of their competitors, in the UK and elsewhere,
are the companies that offer the best prospects for growth in
employment, profits and pay. To support both employability and
flexibility we need a labour market culture and a legislative
framework which together promote economic growth, enhance competitiveness,
encourage entrepreneurship and foster job creation.
2.14 The
Government recognises and welcomes the fact that for most employers
and employees the law is not the determining factor in their relationships.
In most workplaces employers and employees will reach agreements
on the terms and conditions of employment which will reflect employees’
productivity and business performance. These agreements will be
voluntary, constructive and reached without conflict. But within
the blend of fairness and efficiency, we need to set minimum standards
of employment below which no-one in work will fall - including
minimum standards of health and safety to ensure that we work
in environments which are not hazardous, and for the first time
ever in Britain a national minimum wage.
2.15 The
new legislative steps the Government is proposing in this White
Paper will include a range of new rights at work. But in offering
new rights we will demand that employees in return accept their
responsibilities to co-operate with employers. There will be no
return to the days of industrial conflict. The Government is committed
to maintaining the key elements of the employment legislation
of the 1980s. Laws on picketing, on ballots before industrial
action and for increasing democratic accountability in trade unions
have all helped to improve employment relations. They will stay.
Within a flexible and efficient labour market, the Government’s
approach will improve both fairness and competitiveness.
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