The BCC’s misguided call for a freeze on labour law

On Friday, the FT reported that the British Chamber of Commerce were seeking for a three year moratorium on labour legislation. This is misguided. It fails to take account of the UK’s obligations under EU law as well as the fact that many of the measures likely to be implemented are, or already have been, subject to staged or delayed implementation.

The absolute deadline for the implementation of the EU Agency Workers Directive is December 2011. If the government delayed effective implementation in the UK of the rights contained in that directive beyond 2011, it would be in breach of its obligations under EU law. It could, in principle, be sued by the European Commission in infraction proceedings, or by workers disadvantaged by the failure to implement the directive.

The Conservatives have said that they will review the UK regulations if they think that the government has “gold-plated” the directive. It is far from having been. There is considerable doubt as to whether or not the draft Regulations do actually encompass the obligations in the Agency Workers Directive – for example in the areas of anti-avoidance and the definition of “pay”. If anything, the draft Regulations may well amount to a defective implementation of the Directive and challenges to them may materialise unless they are strengthened.

The BCC also wants to stop or delay the Equality Bill. The reality is that the government will be hard pushed to get the Bill through parliament in advance of the general election anyway. Presumably the BCC’s concern centres on the introduction of pay audits. Yet private sector organisations with more than 250 employees are to be given until 2013 to publish pay audits, and then only voluntarily. There is no justification for delay in implementation of the measures in the Equality Bill concerned with public procurement. Those measures are an imaginative method for furthering equality through the way in which public contracts are awarded.

The government has long considered it appropriate to extend paternity leave but has consistently put back the implementation of it proposals for economic reasons. When new paternity leave entitlements are finally implemented it will be disingenuous for the BCC to claim that its members have been taken by surprise when the proposals have been under consideration for a number of years. Indeed, David Cameron claims that he will take Labour’s proposals on paternity leave even further if he is elected.

It’s impossible to see how a “labour legislation freeze” would work in practice, particularly bearing in mind the UK’s obligations under EU law. The reason why the BCC makes the suggestion is because it wants to delay for as long as possible what is perceives to be the imposition of extra costs on its members.

It should be honest about that, so that the questions of whether there are any additional costs, and if so whether they are justified, can be addressed.

Our guest writer is Richard Arthur of Thompsons Solicitors