For those complaining about 'excessive regulation' and 'red tape' of the UK's labour market

[ttosca]

Trying to inject some facts in to the conversation, instead of listening to the Torygraph and corporate shills;

OECD Indicators of Employment Protection

The OECD indicators of employment protection measure the procedures and costs involved in dismissing individuals or groups of workers and the procedures involved in hiring workers on fixed-term or temporary work agency contracts. It is important to note that employment protection refers to only one dimension of the complex set of factors that influence labour market flexibility. For information on other labour market policies and institutions in OECD countries, see the OECD Employment Database.

www.oecd.org/document/11/0,3746,en_2649_37457_42695243_1_1_1_37457,00.html

See where the UK is? Third from the bottom - after the US and Canada.

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There is no further need to degrade workers rights even further in the UK. The UK public are already exploited enough, and are already insecure enough in their jobs. People who are unsure of their next paycheque are less likely to buy consumer goods, take out loans, start a side business, attempt to relocate, invest in their education, and generally take risks.

Apart from being immoral, poor labour protection is bad for the economy.

And as we're seeing now, the problem is with demand, not supply. Further deregulating business to third-world conditions will not help when no one is going to spend money to buy your products because everyone to too insecure about their income and putting food on their plate.

As OECD says in it's preamble: "It is important to note that employment protection refers to only one dimension of the complex set of factors".

I am not sure what point you are trying to make by pointing to this one part of the OECD employment database.

Interesting that temporary contracts are completely illegal in Turkey and Mexico. There are also, according to the document, clear links between countries which have a tradition of Common Law (and the Liberty that is inherent in that system) and looser employment laws.

But of course posting this was just ttosca's attempt to Close Down The Argument by claiming that anyone who disagrees with her is a 'corporate shill'.

It's a cheap and shoddy trick, it's typical of the Left, and it won't work.

Edith-

And your point is what? It is indeed only one 'part of a complex set of factors'? So what? People actually complain on here that UK business regulation is too tight with regards to employment protection, viz. hiring and firing.

I'm trying to point out that actually, British workers have the fewest protections out of all the OECD countries.

flatpack-

No, I'm trying to Open Up The Argument about UK business regulation or so-called 'red-tape', which is often just another word for employee protections and rules protecting the public from businesses (such as dumping laws, etc.)

So why don't you help me Open Up The Argument by either agreeing, or disagreeing, and backing up your argument with some facts (which can then, of course, be disputed).

Interesting that temporary contracts are completely illegal in Turkey and Mexico. There are also, according to the document, clear links between countries which have a tradition of Common Law (and the Liberty that is inherent in that system) and looser employment laws.

Ah yes, 'liberty' for the employer... slavery for the empoyee...

Of course, Mexico and Turkey are well known workers paradises aren't they...

[facepalm]

The harder you make it to hire and fire people, the more difficult it becomes for employers to set on new staff and create jobs. It's to the benefit of those in work but completely detrimental to those seeking work. In the past you didn't need extensive Human Resources departments, and employers were more inclined to give people a chance, rather than just relying on someone else to box tick.

If that is what you are trying to point out, tosca, then perhaps you'd be better off linking a report that actually says that; rather than one which lists an describes various factors (isolated from other country-specific factors) and perhaps one which was compiled after the 2008 Act.

ttosca

flatpack-

No, I'm trying to Open Up The Argument about UK business regulation or so-called 'red-tape', which is often just another word for employee protections and rules protecting the public from businesses (such as dumping laws, etc.)

If that's what you were doing, you wouldn't have started your thread with "Anyone who disagrees with me is a Corporate Shill". You've started by saying "These are the facts, if you disagree, you are paid by a big business to come on to Mumsnet and lie. It's a feeble attempt to discredit someone who disagrees with you. If you want to open it up, try recognising that people disagree for good reasons, and try showing some respect to people who disagree with you.

So why don't you help me Open Up The Argument by either agreeing, or disagreeing, and backing up your argument with some facts (which can then, of course, be disputed).

You're wrong, as usual, and desperately grasping at the thinnest of straws in order to find something that reinforces your worldview. As EdithWeston points out, the report you linked to doesn't say what you claim it says.

And if you think that working for a wage is 'slavery', then there isn't really anything to discuss, is there? A closed mind is a dying mind.

Of course, Mexico and Turkey are well known workers paradises aren't they...

Err... no? What do Mexico and Turkey have to do with it? Are you suggesting they have strong employee protections?

Denise

The harder you make it to hire and fire people, the more difficult it becomes for employers to set on new staff and create jobs. It's to the benefit of those in work but completely detrimental to those seeking work. In the past you didn't need extensive Human Resources departments, and employers were more inclined to give people a chance, rather than just relying on someone else to box tick.

Yes, yes, we've heard the neo-liberal argument before, and it has led to the greatest economic breakdown since the 1930s, and the greatest wealth inequality. The middle-class in the West now earn less, on average, in real terms, than they did in 1980.

These arguments have all been spouted before.

These are part of the same set of arguments that were used to deregulate the financial sector, which has led to widespread fraud, criminality, and exploitation and the biggest public bailout in history.

It's hard to believe that post-crisis, anyone is still coming up with this sort of thing. Businesses will always argue for less regulation, fewer rules, fewer protections for employees, less taxation, etc. So what? Just because they want it doesn't mean it is in the public interest to give it to them.

These policies of deregulation and a 'flexible' labour market hasn't benefited only a tiny minority of very rich people, while the rest of us a financial crisis, rising taxes, and a publicly funded bailout costing hundreds of billions of pounds.

Businesses argued against the 5-day week, they complained about anti-discrimination laws, they rallied against the minimum wage - the entire history of business is can be summed up by the complaint: "If you do X to protect employees/the public, then my business will go bankrupt! I won't tolerate it! I'll go elsewhere!".

If we continue down this line of sucking corporate cock - the same thing we've been doing for 30 years and which has led to disaster - then we'll soon end up looking even more like a third-world country than we already do. Riots are probably already coming again soon.

Edith-

If that is what you are trying to point out, tosca, then perhaps you'd be better off linking a report that actually says that; rather than one which lists an describes various factors (isolated from other country-specific factors) and perhaps one which was compiled after the 2008 Act.

The report does say that. They are indicators of employee protection, using 'OECD employment protection indicators' found here:

www.oecd.org/employment/employmentpoliciesanddata/43116624.pdf

You can look up exactly what they are.

What 'country-specific factors' are you referring to which are relevant to employee protection? I'm genuinely curious to know. Do these factors outweigh those indicated by the OECD factors? In what sense? How?

Which 2008 Act are you referring to? Are you seriously suggesting that the UK Labour market has increased its employee protections since 2008?

flatpack-

^No, I'm trying to Open Up The Argument about UK business regulation or so-called 'red-tape', which is often just another word for employee protections and rules protecting the public from businesses (such as dumping laws, etc.)&

If that's what you were doing, you wouldn't have started your thread with "Anyone who disagrees with me is a Corporate Shill".

You've started by saying "These are the facts, if you disagree, you are paid by a big business to come on to Mumsnet and lie.

What I'm trying to do is actually bring some 'facts' - which you are free to dispute or disagree with, as people have on this thread, rather than just asserting things which they read in the Daily Mail.

This thread got lots of responses, but so far no one has tried actually showing the contrary: that the UK labour market is inflexible or 'too regulated' relative to other first world countries (Apart from the US and Canada, which I show are even more deregulated) and that this is harming people's employment chances.

I'm not saying everyone who disagrees is knowingly lying, though I suspect that some are, and do so because it is in their perceived interest. I do think that some people are misinformed though, and I'd like people to back up their Daily Mail rants which some facts - or anything at all, really.

It's a feeble attempt to discredit someone who disagrees with you. If you want to open it up, try recognising that people disagree for good reasons, and try showing some respect to people who disagree with you.

Sure, I can recognize they may have good reasons, but unless they actually show some evidence to back up their claims, it just becomes a 'what I reckon' to and fro.

So why don't you help me Open Up The Argument by either agreeing, or disagreeing, and backing up your argument with some facts (which can then, of course, be disputed).

You're wrong, as usual, and desperately grasping at the thinnest of straws in order to find something that reinforces your worldview. As EdithWeston points out, the report you linked to doesn't say what you claim it says.

I'm not grasping at anything. You guys have done nothing to actually present a counter-argument. You've attacked the man, but not the ball. The report I linked to makes a pretty good argument that the UK is not a heavily regulated labour market - in fact, it appears to be very deregulated. It provides a set of criteria in the report, which you can look up.

I haven't seen anything from anyone showing how the UK actually has a heavily regulated labour market, and how this is harming business. Why don't you try providing some?

ttosca, the majority of businesses in this country are small businesses employing only a few people. It is them that suffer the most from excessive regulation and red tape. And I do not believe we currently have a flexible labour market. If we did I do not believe we would have the level of unemployment we currently have.

If you do not know that the was an Employment Act in 2008, then you are not so familiar with UK regulation.

Nor you you seem to understand that this report is one of many, which need to be read together, in order for any conclusions to be drawn (even the authors of the report you link say this!). You are also confusing ranked amount with essential and/or desirable amount. The report does not draw any conclusions on whether UK is "heavily" or "lightly" regulated, or efficiently regulated, or if level of regulation offers good protection for its direct or indirect costs.

ttosca, the majority of businesses in this country are small businesses employing only a few people. It is them that suffer the most from excessive regulation and red tape. And I do not believe we currently have a flexible labour market. If we did I do not believe we would have the level of unemployment we currently have.

Which 'excessive regulation' and 'red tape'? You mean things besides employee protections? Or are you suggesting they no be subject to employee protections? Which ones in particular?

Unemployment rose drastically since, err... 2008. Hmm... what happened in 2008?

Traditionally, UK unemloyment has been lower than most of europe. So what makes you think that UK employment 'regulation' and 'red tape' is harming businesses, particularly?

OK then ttosca I'll give you a clear cut, real life, example. I'll get flamed for this but it is true. I run a small business and I cannot afford to risk taking on a woman of child bearing age (other than my wife for pretty obvious reasons).

If I took on a woman who became pregnant and wanted maternity leave it could, and in this business climate probably would, sink my company. I could very easily be left in a position where I have to pay for the woman to produce nothing AND someone to replace her for the duration of her maternity leave. That is a risk that I'm not prepared to take, irrespective of what the law says. To get around the law, it is easier for me to take on a contractor on a fixed term contract.

This is a clear cut case of a heavily regulated labour market being detrimental to the interests of the workers but I'm not a charity.

If you do not know that the was an Employment Act in 2008, then you are not so familiar with UK regulation.

I just looked it up. It looks to me like it is an act of enforce existing legislation and to clarify the law. That is obviously from a quick Google. A brief look at it and it mostly seems resonable to me. Which part do you think is harming businesses?

Nor you you seem to understand that this report is one of many, which need to be read together, in order for any conclusions to be drawn (even the authors of the report you link say this!).

Which reports, then? Why don't you provide some reports showing how the UK labour market is 'excessively regulated' compared with most or many european countries.

You are also confusing ranked amount with essential and/or desirable amount. The report does not draw any conclusions on whether UK is "heavily" or "lightly" regulated, or efficiently regulated, or if level of regulation offers good protection for its direct or indirect costs.

No, it refers to 'Employment protection' based on a set of criteria, which I have stated a number of times now. I would say that 'employment protection' forms a major part of 'labour regulation', wouldn't you?

Are you seriously trying to suggest that the UK's labour market is more heavily regulated than europe - or even most Western developed countries? What is your evidence?

Actually as far as employment law goes, in this country I'd say we have the balance about right. We're not as restrictive as some European countries where it's practically impossible to get rid of anyone, even obviously crap employees. But at the same time we're not as lax as say the US where you can get rid of anyone with 2 weeks notice.

But over the last decade we did introduce a lot of well meaning but ill thought out legislation and not just for employment law but across the whole economy. Law's which just created a quagmire of bureaucracy for very little benefit, if any at all. At times it seemed that common sense was no longer allowed and was to be replaced by a checklist.

JudgeyPants-

^OK then ttosca I'll give you a clear cut, real life, example. I'll get flamed for this but it is true. I run a small business and I cannot afford to risk taking on a woman of child bearing age (other than my wife for pretty obvious reasons)."

If I took on a woman who became pregnant and wanted maternity leave it could, and in this business climate probably would, sink my company. I could very easily be left in a position where I have to pay for the woman to produce nothing AND someone to replace her for the duration of her maternity leave. That is a risk that I'm not prepared to take, irrespective of what the law says. To get around the law, it is easier for me to take on a contractor on a fixed term contract.

This is a clear cut case of a heavily regulated labour market being detrimental to the interests of the workers but I'm not a charity.

Firstly, thanks for the input, and trying to inject some real world examples in to the conversation.

I understand your predicament, but it is not new, and not by any means exclusive to small companies.

Of course it's more difficult for small companies to pay maternity leave, but large companies will, and always have, fought against paying maternity leave - even large multinational with annual profits in the tens or hundreds of billions.

Companies will always seek to minimise costs, and they will always claim that policy X will bankrupt them. They also said that about the minimum wage and the legal right to join a union. In your case, it may be true - if you had to pay for the maternity leave - but in many cases it wouldn't be.

So what I'm trying to say is that it's dangerous that we simply listen to whatever businesses claims they need in order to remain 'competitive' . Historically, if we had done that, we wouldn't have any of the rights workers enjoy today, including the weekend or sick leave.

But to bring the example back to your situation, various countries have different policies with respect to maternity leave. If we are arguing about improving the situation for both employers and the public, then we should look at some other working examples across the world. Denmark and Sweden, for example, have very generous state subsidies for maternity leave.

With the help of state funding, it could be very well possible that you could hire a woman of child-bearing age without any real risk to your company.

These are the sorts of solutions we should be looking at.

It is destructive to have a race towards the bottom in working conditions, rights, and pay towards everybody involved and impoverishes society as a whole. It makes society a meaner, nastier and more brutish place to live.

We cannot become a country that relies on the state for everything we do. We have gone down that road far too much already.

MrJudgypant you do know that you wouldn't actually have to pay maternity pay - SMP is paid for by goverment - plus small businesess get 10% for admin cost
Do understand for a small company that having a key member of staff off is difficult although if you are happy for some one to be on short term contract instead I can't see the difference really

ttosca in economics all effects happen at the margins. If a small business is only just viable - albeit viable enough to keep a couple of employees in gainful employment - making it less viable by adding further burdens will wipe it out. Across the country right now, many businesses are teetering - making life harder for them by burdening them with more rules and regulations will only push up unemployment.

We have a weird capitalist system in this country in so much as it appears to me that government offers a protection racket to larger corporations. Big businesses can absorb the costs of a few departments of non-productive staff (compliance, HR, legal - all departments which, a generation ago, seldom existed in anything like the size they do today) and can afford worker protection laws, small businesses seldom can. As small businesses employ the most people in the UK, I believe that the system should be gamed for their advantage. This isn't in the form of tax breaks, subsidies or handouts, it should be the deregulation of businesses so that we can all compete on the same footing; I'd like to see a levelling of the playing field.

An0therName It isn't all that simple. For a start the admin cost is only 3% not 10% but you fail to take into account the effect on cash flow, the time it takes me to complete all relevant paperwork, the cost of training up temporary cover and the time it takes to bring them up to speed (typically 3-6 months in my field), the medium term disruption that may occur if someone chooses not to return to work and the problems that the £75k NIC threshold causes if one year I am above that level and the next year below it. All in all, it's an easily avoided bloody big nightmare - so why would firms chose to expose themselves to it?

Fixed term contracts allow me to take on (more or less) the same people from one year to the next so that retraining time is minimised. All key roles such as Financial Director or payroll are split between my wife and I to minimise potential disruption to the business. By and large, we manage and although we'll never be a FTSE 100 company, we might make a decent life for ourselves and our staff but I'm not holding my breath for that Aston Martin!

Denise-

We cannot become a country that relies on the state for everything we do. We have gone down that road far too much already.

What on earth are you talking about? The country has never before been so deregulated and privitised.

Both deregulation and privitisation of public assets skyrocketed since the Reagan-Thatcher era. Unions are the weakest they have ever been.

And how is the state paying or contributing towards maternity leave 'relying on the state for everything we do'?

Is having an NHS 'relying on the state for everything we do'? Should we privitise and deregulate even more, in your opinion?

MrJudgeyPants-

You didn't really take in to account what I said. I recognize that there is a cost to business for maternity leave, which is why I'm suggesting that, like many other countries, the state wholey or partially subsidises maternity leave.

As small businesses employ the most people in the UK, I believe that the system should be gamed for their advantage. This isn't in the form of tax breaks, subsidies or handouts, it should be the deregulation of businesses so that we can all compete on the same footing; I'd like to see a levelling of the playing field.

You mean compete on a different footing, where you don't have to pay maternity leave? Why not do away with minimum wage as well? Small businesses have complained about that, too. Where do you stop?

The state is supposed to intervene in these matters because what is good for businesses isn't necessarily good for the public. That's why I think maternity leave should be partially or wholey subsidised.

An exception for small businesses could be made, but this is quite different from the proposition that the UK labour market in general is strangled by 'red tape' and 'excessive regulation'. It's a far more liberal market than most of europe.

ttosca "I'm suggesting that...the state wholey or partially subsidises maternity leave."

It already does this - my point was that it is possible for the state to subsidise maternity leave AND compensate the company yet still leave the company out of pocket.

"You mean compete on a different footing, where you don't have to pay maternity leave?"

No, what you've done there is create a straw man and then subsequently demolish it. I wrote that we should 'compete on the same footing' without 'tax breaks, subsidies or hand-outs? - which bit of that did you misread / wilfully ignore? The number of rules and regulations should, in my opinion, be reduced for ALL businesses.

"The state is supposed to intervene in these matters..."

What the state is supposed to do and not supposed to do isn't written in stone. That the state DOES intervene in these matters should not be taken as proof that it SHOULD be intervening in these matters. (As an example, Iraq was a country we DID invade, not a country we SHOULD have invaded)

"An exception for small businesses could be made"

NO, NO and thrice NO! What we need to be doing is simplifying the rules, regulations and tax codes, not adding more complexity. If you say companies under X size are exempt from certain rules, you create an incentive for companies to arrange their affairs so that they fall under X size. For example, a major PLC could easily split itself up into its many smaller departments to create hundreds of micro companies rather than one big company. Low and behold, you've just inadvertently created a tax-avoiders charter.

As for Britain being more liberal that Europe, yes you are quite right, we are. Unfortunately, we have many more international competitors than our, currently moribund, European brethren and it is to those competitors that we should be looking.