Workers’ rights and impact on employment

Workers’ Rights: EU v UK

I firmly believe in the need for strong workers’ rights for both a sustainable economy and the tackle wealth inequality. A sensible balance has to be struck between encouraging business and entrepreneurship on the one hand and protecting workers on the other. The Labour party are erroneously claiming that Brexit will lead to workers’ protections being eroded. The UK has many significant protections that go beyond EU standards. The next Parliament will need talented Parliamentarians as there will be such a busy agenda. Practically, it is difficult to see how changing workers’ rights legislation will be a priority for the next Government with so many other issues to tackle.

As as a born and bred East Londoner and the child of immigrants, I am believe in effective social/left policies. That influence comes in part from my late Grandfather, Shri Yoginder Pal Bhanot, a railway (British Rail) man based at Ilford station, trade union member and an advocate for workers’ protections. If there was an attempt to deteriorate workers’ rights, I (along with many other left leaning/former Labour Brexit Party candidates) would work to prevent that from happening. We need a party that genuinely represents the values of ordinary men and women in this country. The Brexit Party is that party.

EU/Brexit impacts on employment?

Much has been said about Brexit and EU based workers’ rights.

1. Impact of the EU Single Market on wages

One of the issues of the EU (and free movement of persons) is that is has lead to a significant increase in the supply of labour which has driven down labour costs (earnings) across many industries in the UK as well as other countries. While this may be good for business profits, it has driven unhealthy competition among workers leading to stagnant wage growth while the cost of living goes up.

Socially this has led to other challenges. In some instances exploitation of migrant workers takes place (and the use of zero-hour contracts does not help). Many are forced to live in difficult conditions because living costs have increased significantly relative to earnings. In the extreme we are seeing increased poverty and homelessness which needs to be urgently tackled. These practical issues are difficult to tackle but we cannot pretend they do not exist or that leaving the EU is going to impact us badly. We need competent politicians to start to tackle and resolve the issues. The status quo is not sustainable.

2. Employees in high-debt Eurozone countries.

In certain Eurozone countries, forced austerity has caused terrible treatment of employees and high rates of unemployment. There is much higher unemployment and lower workers’ protections in the Eurozone than outside it. For example, Greece colleagues of mine working for the Greek financial regulator had their wages slashed by 75% a few years ago as a result of EU-imposed austerity measures as a result of the Greek debt crisis.

3. The car industry

Much is being said about the UK losing jobs as a result of Brexit. However, we have seen a gradual transfer of jobs from high paying economies to lower paying economies while being part of the European Union. We have also seen improving technology. These have a much greater impact on the employee market. Of note:

1. There have been steady declines in UK car manufacturing over decades as production operations (labour and capital) move outside the UK to lower cost locations (related to globalisation and falls in consumer demand, not Brexit).
2. The British car industry has a long successful history but has gradually migrated into a global car industry with jobs sent outside the UK.
3. Global consumer demand is slowing due to:
   • customers waiting for improvements in hybrid and electric technology;
   • distrust following misrepresentations by car manufacturers on emissions performance standards (Volkswagen, Renault, Nissan, Hyundai, Citroen, Fiat and Volvo among others emitted far more NOx in more rigorous tests); and
   • modest shifts in city driving behaviour to other forms of transport, more pronounced among younger city-dwellers.
4. Factory automation, a focus on more profitable models and the car industry’s shift toward EVs are likely to see more jobs cut globally, and, in the UK, to hit jobs at Ford, JLR, Honda and Nissan. These changes cannot be laid at the door of Brexit
5. Over decades, trade unions have failed to protect car workers against cuts in jobs over time.

4. Financial Services

It was predicted after the referendum 1,000s of jobs would transfer to the EU including by the banks themselves. This has not and will not transpire. While some jobs have had to and will be transferred to other EU countries, for example, as a result of the EU “MiFID2” legislation, there has actually been a rise in employment in the financial services industry since 2016.

Having come from the investment banking industry as a compliance officer and leading on Brexit related work, I know the impact of the Brexit referendum on employment is much smaller than original predictions. Some jobs have been “outsourced” back to the UK mitigating the impact of Brexit. A far bigger issue than Brexit is the impact of jobs going to lower cost economies, whether in the EU or outside it, for example to India.

EU v UK workers’ rights

The purpose of Brexit it to enable UK politicians to take control of its laws. However, for workers’ rights, the reality is the UK has a long history of being a bastion and leading country in protecting workers’ rights, reflecting working-class roots across the country.

The following table provides an overview of how EU and UK workers’ protections compare. Although, EU workers’ rights are gradually catching up to UK standards (noting the UK implements all EU workers’ rights legislation), there remain a number of key areas (including paid leave, maternity leave and the national minimum wage) in which UK standards either exceed EU standards or the UK had specific protections in place prior to the EU or prior to joining the EU.