Opinion: Cash for coffees and rights for shares

This morning I purchased a coffee. Not a very eventful start you might think, but if you’ll allow me, I’d like to dwell on the transaction. The deal with the establishment from which I purchased the coffee, was that in exchange for my ability to leave the store with their product, I had to exchange £3.50 for the privilege. In a functioning free market economy, such exchanges are made willingly by the buyer and seller alike. The key to this relationship is choice. Indeed, I had many choices – whether I needed the product, where to buy the coffee from and what price I was ultimately willing to pay for my ‘cup-o-joe’.

A day earlier than my purchase took place; the Government were defeated in the House of Lords for the second time on their proposed policy for “Employee Shareholders”, which has been derisorily renamed ‘shares for rights’. The proposal, which the Liberal Democrats in Government support, seeks to allow business to employ new staff with fewer statutory employment rights in exchange for a stake in the company.

Successive governments have coated employee protection after employee protection on top of one another and ignored the concerns of small businesses over the steadily rising burden of hiring people. What those who seek to add to the already weighty burden of employing people fail to understand is that for every protection we extend to those in work, the same measure acts as an obstruction to employment. Employers have said time and again that they employ fewer staff than they would if there were a lower employment law burden.

The House of Lords were quite right (last month) to reject elements of the proposal, including the fact that Job Seeker’s Allowance (JSA) claimants could lose their benefits if they didn’t take up an employment offer that sacrificed rights under this model. Such a consequence fundamentally undermined the ‘choice’ element of this proposal. However, yesterday’s Government defeat (which included 18 Liberal Democrat dissenters) is a different matter – the House of Lords is now restricting choice for the public, because some Peers believe it to be unacceptable to allow individuals to trade the rights they have been endowed with (by them and their forebears) in return for greater chances of employment and potentially greater financial gain.

I didn’t ask to be protected from myself and I didn’t ask for successive government interventions on labour law – providing me with rights to unfair dismissal, time off for training, flexible working, redundancy rights etc. I recognise individuals will each have different views about the precise rights that matter.  For instance, I certainly recognise that discrimination protections are important and necessary, but I seriously question whether rights to request flexible working and training are protections that I really need.  If I’m ever unfortunate enough to have to call on any of my employment rights, I concede that I might be glad of them.  However, I suspect that my relief would only be the same as the fact I had chosen to invest in private healthcare if I ended up being unwell.  Day to day, these rights are potentially more valuable to me as traded commodities, which could deliver me a stake in the company for whom I work.  Why should I be encumbered (in the eyes of many employers) with them, when I have no desire to realise their benefits?

Ultimately, like my transaction this morning, if I prefer to take the proxy financial benefits of my legislative rights – then parliament should step aside and let me do so.   I hope that some of our Parliamentary colleagues remember that some Liberal Democrat members are still adverse to a nannying state.  Something they would do well to remember as they muse over their own ‘cash for coffees’ exchange this afternoon.

* Alexander Ehmann is a Liberal Democrat Councillor and Deputy Leader of the Opposition in the London Borough of Richmond upon Thames. In the past, Alexander has been the Campaign Manager for a number of Liberal Democrat Parliamentary Candidates, including Duncan Hames, Paul Fox and Theo Butt-Philip. Alexander has worked in communications and public policy for a number of employers over the past 15 years, including the British Army, Institute of Directors and Tata.

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55 Comments

  • You may not need those rights eg flexible working but others may. You may have the luxury of turning down jobs where those rights aren’t on offer but a ‘stake’ job is, others may not whether its due to their skills, area they live in or the sector they work in. You may already be someone with a stake in your company and you worked really hard just to get it and a share of the profits, why should you just let someone else share in the spoils just because they wanted to work alongside you.

    The defeat isn’t about worker’s choice, its about a victory for those who want to think something through. I get this is a great idea, if not existing practise in some sectors like high finance. However, that doesn’t reflect other businesses or even types, such as family businesses. You may think its trendy to carp on about deregulation, being business friendly and chime with policy which excites businesses, but law, and good law, is about a broader perspective such as whether this is sound, will there be unintended consequences, will it respect individual rights, will it just convolute existing company law and does it contradict european law?

    Good politics usually equates to bad policy, and this may have been the underpinning conclusion in the Lords

  • Alexander – What you don’t seem to realise is that you can already dispence with your employment rights in exchange for shares, a higher slary or even a cuddly toy. It’s all up for grabs when you negotiate your contract. However, and this is the important bit, at the moment you cannot give up your employment right without involving a lawyer as it has to be shown that you knew what you were doing and you weren’t being hoodwinked by the firm (it also protects the firm from you claiming you didn’t give up your rights when a forklift truck runs you over).
    These proposals remove that layer of protection. Now a lot of people probablyl don’t need that protection, but employment law is pretty complex and I for one don’t think it’s realisitic to think all, or even most, prospective employees of a rights for shares company will actually appreciate what they are giving up.
    Hence the status quo is in this case the best option. Give up your yes by all means, but make sure you know what you’re giving up.

  • Alexander Ehmann 24th Apr '13 - 4:16pm

    Thanks for the comment sfk. I agree that there are risks with such a proposal. Indeed, its important to note that I am not saying that the policy (as set out) is perfect. What is true – in say the case of rights to request time off for training and flexible working is that these are largely valueless propositions to the vast majority of employees. Many would trade these rights for a job opportunity that wouldnt otherwise exist or for the prospect of enhanced financial returns. Surely, while Government should seeks to protect the vulnerable, it is liberal to allow individuals that wish to, to bargain away ‘rights’ that are useless or of less importance to them?

    Seperately, I’d underline that the rights and protections afforded to people in work are also keeping people out of work, because employers are concerned about the speed and cost with which they can downsize a workforce if things turn south. A more flexible labour market does mean that there may be greater levels of staff movement out of businesses, but also that there will be a net increase in the opportunities in the first place as businesses reduce their reluctance to hire.

    As for the point about “good law”, these are fair challenges, but individuals werent born with “individual rights” to flexible working requests etc. And, as far as I know there are not any complexities with company law. The ‘rights’ that this proposals seeks to allow opt-outs on arent contradictory with EU laws (indeed Unfair Dismissal is an entirely UK generated concept).

    With this article – I really wanted to start the ball rolling on how we adopt the right policy balance. Simply handing out more employment rights and obligations isnt the answer. Neither, as you say is rampant and blinkered de-regulation. However, if individuals don’t value the rights provided to them by their parliament, surely they shouldnt be bound to them (especially if these rights reduce work opportunities)?

  • And just to expand your coffee idea. You’re welcome to try the non food hygiene compliant cakes, but I think you should speak to an expert first.

  • Peter Watson 24th Apr '13 - 4:28pm

    I think there is a typo in the article. Surely it should say “Employers have said time and again that they sack fewer staff than they would if there were a lower employment law burden.”

  • Sorry for multiple comments but this really is a pet hate of mine!
    Looking at the policy from the other angle it’s a money launderers wet dream and allows company bosses to hire relatives, give them large share issues and reap the tax breaks.
    Frankly it’s an offensive policy from which ever way you look at it.
    Employee owned business are a great idea to encourage but this is just a bad boss charter.

  • Melanie Harvey 24th Apr '13 - 4:43pm

    Try this for size in respects coffee and employment rights and violations… add police failures too and denial of justice if you will… This is a true story …

    Facts
    I am an experienced horsewoman born on 3rd January 1968. On the 13th July 2006 I was injured in a fall from a racehorse, suffering severe head injury. It is believed this fall was induced by another spiking the coffee I had drunk prior to riding with what is known as the equine sedative Acepromazine which, is widely available in racing stables. Not surprisingly my former employer, Oyster Racing Limited and the licensed trainer Declan Daly whom, has since relinquished his license has, denied any responsibility and to date justice has not been served on my behalf. There are many negligences shown by their actions and the courts have denied me the right to fair trial despite, a medico legal report and circumstantial evidence in support of my claim. In addition, although the crime was reported to them, the police have not dealt with this either and have no crimed the incident. It is believed this is due to the connections my former employer had to a race fixing case. I was unaware of this connection when the drink spiking occurred and when reporting the incident to the police. Although I recovered from the injuries physically well, the lack of justice and care by the authorities and medics involved in my admission and stay at the hospital has, caused untold damage and devastation to my life and career. I have been unable to return to work as a result.

    Furthermore, I understand I am not the only person this has been done to and concerns in regards the supposed suicides in Newmarket in recent years may be of relevance as; the number is well above the national average and some of those had worked for my former employer in the months prior to my engagement with them. These also appear to have connection to the race fixing cases and or, other employee’s involved in the act against myself. They may not have had the support for which I have had from my family GP and friends which, may have contributed to and or caused them to take their own lives, if at all it is the case that they did take their own lives by hanging. I understand they were found with drugs/alcohol in their system, however, this does not dictate they were freely administered by them and or, that they committed suicide due to drink or drugs. I can confirm I do not take class A drugs and consume only moderate amounts of alcohol. Given my experiences, I am strongly of the opinion, it would be more likely these suicides would be due to any undue pressure placed upon them, by or through those directly involved in race fixing and a lack of support for which I have also suffered.

    I have been trying to obtain help from the National Association of Stable Staff (NASS formerly Stable Lads Association) and for which I was entitled to legal help and representation. They have refused to provide this even though, I am entitled to such by way of pool money contributions. There are many concerns in regards how they treated me when I approached them and the full file in respect of this is also available. It would seem both they and the British Horseracing Authority (BHA) ensured they did not give me help and it would seem there are conflicts of interest here too with both organisations, as; the newly appointed CEO prior to his appointment worked with some of those involved and, his predecessor had been appointed around the time I initially contacted them and had never worked in racing coming from NHS unions. I understand a representative of one of those charged with race fixing and whom kept horses with my former employer also has family whom, worked within the NHS and prior to retirement was also involved with NHS unions. Given the medical negligence involved this is deeply worrying, as to that; the Chairman Paul Roy has horses in training with whom was the registered trainer of the horse involved and had stabled it with my former employer and Mr Daly. Further and most recently the betting medium in the race fixing cases, Betfair has made a substantial donation to the union, Paul Roy CEO of the BHA being a major share holder.

    There can be no doubt by way of simply going to work for what was understood to be an honest living, I walked into a web of deception and crime for which; not only those directly involved but, the authorities concerned believe, I should be further abused and pay the price for their negligences, in order for them not to be answerable to their part within it. A certain miscarriage of justice has definitely occurred in respect of myself and others.

    .

  • Eurgh. Does LDV really need to publish the whines of the overprivileged?

    “WAH I WANT TO SACK PEOPLE MORE EASILY IT’S SO UNFAIR!!!” – give me a break. Or a job.

    Of course the fact that most people in low paid jobs get their employment rights routinely ignored ANYWAY will not have passed the people pushing for this by – they just want to lose the risk of getting pulled up on it.

  • >If I’m ever unfortunate enough to have to call on any of my employment rights, I concede that I might be glad of them.
    I assume Alexander Ehmann has always worked bank/public holidays, never taken a paid holiday, never been off sick and continued to be paid etc. etc.

    The “Employee Shareholder/shares for rights” proposals were very poorly thought out, as the findings from the consultation showed. These proposals should of been binned after the public consultation.

  • Simon McGrath 24th Apr '13 - 6:10pm

    @Carl N – actually you can’t give up your emplpyment rights when you join a firm. You can when you leave via a compromise agreement, which does have to be signed by a lawyer.

    I am not in favour of ‘shares for rights’ mainly becuase I don’t think it will achieve anything and will be used for tax avoidance. But to argue that there is no link between unemployment and levels of employee protection is silly. You may argue ( which is what i assume Jennie is doing) that it is better for people to have rights even if it means others are unemployed – but there is a link.

  • Peter Watson 24th Apr '13 - 6:46pm

    Simon McGrath “But to argue that there is no link between unemployment and levels of employee protection is silly … there is a link.”
    I can’t let such a definitive statement pass without a request for quantitative supporting evidence.

  • “This morning I purchased a coffee….. I had to exchange £3.50 for the privilege.”

    I don’t know about the rest of your arguments but your paying waaaaaay too much for coffee 🙂

  • Simon – I stand corrected, as I said, employment law is complex for a non lawyer!
    That conceded I stand by my assertion that this is/was bad policy.
    Alexander’s follow up proposition that you should be able to, in effect sell the rights you don’t think you need is also a nonstarter, each employee on bespoke contracts? Fine for high value executives maybe but workable for small or medium sized businesses?

  • @Simon: I, too, must ask for evidence of this link between employee rights and less employees. As far as I can see, this is just businesses disliking employee rights because they do not like having to go through due-process to sack people. It is like with the NMW, another thing businesses like to assert is bad because it for employment stats, despite evidence actually refuting thing.

  • Eddie Sammon 24th Apr '13 - 8:53pm

    Why does everything have to be proved by evidence when we have common sense? If before you could hire someone you had to arrange for them to marry your daughter, then I imagine it would slow down recruitment. The link you seek is called the human brain.

  • Cable also regarded Osborne’s plan as ridiculous. But Cable, after mounting a rearguard action, decided to back the plan, in return for a commitment by Osborne to support Cable’s business investment bank.

    Which I’m afraid says it all as regards principles on this issue .

  • “Why does everything have to be proved by evidence when we have common sense?”

    Oh, so we are making Government Policy based on common sense, and there was silly old me thinking that we needed to, you know, may be think about things before we made or rescinded Laws that could possibly have massive repercussions on millions of citizens lives.

  • Paul In Twickenham 24th Apr '13 - 9:31pm

    You lost me when you said you paid £3.50 for a coffee.

  • Eddie Sammon 24th Apr '13 - 9:35pm

    I’m all in favour of research, but it is no substitute for logic. “According to statistical evidence, mortgaged backed securities are as safe as houses, literally.” – probably some glib salesman in a bank circa 2006.

    You can get evidence to say pretty much what you want it to say.

  • Alex Macfie 24th Apr '13 - 9:54pm

    Reducing employment protection may INCREASE unemployment. Making people’s jobs less secure would make people less inclined to spend money, especially on long-term commitments such as mortgages, as you would never know if you were going to be fired the next day. This reduction in economic activity would reduce job creation; thus fewer jobs, and more unemployment. So the link between level of employment protection and unemployment is not as straightforward as supporters of reducing employment protection seem to suppose.

    As for the idea that “rights” can be traded; sorry but if they can be traded or bargained away, then they are not rights anymore. Rights, by definition, are inalienable. If you give people the opportunity to bargain away their rights for some benefit, then in practice only those who are sufficiently well-off that they can afford to ignore these benefits would be able to enjoy them.

    if individuals don’t value the rights provided to them by their parliament, surely they shouldnt be bound to them

    By that logic, perhaps the government should give a fixed payout (say £500) to anyone who chooses to relinquish their right to vote at each election for which they are eligible. Given the shockingly low turnouts at many elections, one could argue that a lot of people don’t value their right to vote and should be allowed some reward for relinquishing it. But since that £500 would make a material difference to the life of anyone below upper-middle class, I suspect that many people who might otherwise actually vote would take it up; voting would in practice be restricted to those who can afford to forego the government bribe.

    But ultimately, I don’t like this shares-for-rights scheme because I do not want us to go down the US route where employers can fire people for reasons that are nothing to do with their ability to do the job. I read once about someone in the US being fired from a job at a beer company because when out with friends of an evening he had ordered a rival beer at a bar. Firing people for what they do in their private lives should not be possible; nor should it be possible to fire someone because they disagree with the boss’s politics (or, as could happen in the US, refuse to join the corporate Political Action Committee). And nor should it be allowable to fire an employee for having sued their former employer, as in a case that was recently in the news. Protection against unfair dismissal is about basic fairness.

  • This morning I made a coffee at work. It was probably better than the one you paid £3.50 for. I made it with freshly ground beans (I ground them then took the ground coffee to work as I do every morning). It cost me in total something like 15p.

    There is where you lost the argument. You fail to see the issues that real world people face at the low end of the food chain.

    Now I own shares in the company I work for. I own a significant number of shares. Our company has had a sharesave scheme for many many years, and I get in every time. I earn a reasonable amount and with my wife’s earnings we have a comfortable existence.

    But you know what. I would give it all up immediately to ensure that every employee had their rights . Rights that have been fought for and won with valid reason. Because some employers do fire people without good reason. Because employees in some firms are badly treated.

    I suffer from bipolar disorder. I’m again lucky because the industry I work in on the whole understands mental illness and treats employees who suffer with dignity, respect and understanding. But not all employers do. Those hard fought rights give the employee some recourse.

    Now you’re naive in the extreme if you think that employees will have the choice to waive their rights.. I suppose they will “sign this or you don’t get the job”, but that’s really Hobson’s choice isn’t it. Those at the top end would benefit, but at the bottom end, they could be treated like dirt and have way of fighting back. So I say bravo to those in the House of Lords who rejected this proposal. They did the right thing.

  • “Why does everything have to be proved by evidence when we have common sense?”
    Because common sense isn’t always the same thing as good sense.

    “I’m all in favour of research, but it is no substitute for logic.”
    I’m all in favour of logic, as logic logically creates conclusions which rest on the facts derived from research.

  • Is Mr Ehmann writing in a personal capacity or on behalf of his employers? http://www.iod.com/influencing/policy-and-parliamentary-affairs-team/alexander-ehmann

  • Eddie Sammon 24th Apr '13 - 10:27pm

    Very clever Orangepan but policy evidence does not go through the same rigorous testing as scientific evidence before it is claimed to be true. Let’s stop splitting hairs, I’m also against the policy anyway.

  • Eddie,
    you have a habit of creating disagreements where none exist.

    Firstly, science does not pertain any claims towards ‘truth’, that would be philosophy. So anyone who does make that claim is not a proper scientist and not to be trusted.
    Secondly, scientific conditions are not the same as real-world conditions, so it’s senseless and often counterproductive to make technocratic arguments which take no account of actual results or the reaction of people.

    I’m not splitting hairs, far from it, I’m trying to lead you to consider being more imaginative when discussing subjects such as this.

    I’d also direct this towards Jennie, who complains that employee rights should be protected and extended at all costs. The biggest right of all is to seek and find employment, so if employers are saying they could increase the number of jobs in the economy then we should listen to them.

    Employee and employer rights form a balance held in contract, and it is up to political parties to find the best balance possible – the equation shouldn’t be seen as a zero-sum game where the advance of one interest is at the expense of the other, rather by taking a more cooperative approach we can serve interests and remove the damaging confrontation which commonly blights the prospects of so many in this land.

    Labour and Tories can’t do this because they do represent the interest of one side at the expense of the other – their political conflict has harmed this country for more than half a century now, and it is up to us to resolve the problems created by their self-serving solutions.

  • Eddie Sammon 24th Apr '13 - 11:14pm

    I completely agree Orangepan! We are the only party who seeks to get a fair deal between employee and employer and it is not a zero sum game. My disagreement was about what I see to be the overuse of weak evidence.

  • “Ultimately, like my transaction this morning, if I prefer to take the proxy financial benefits of my legislative rights – then parliament should step aside and let me do so. ”

    So can I sell my right to vote? Is so for how much. If not – why is that different?

  • Alexander Ehmann 25th Apr '13 - 9:10am

    I wanted to do the best I could to answer many of the really varied questions posed to me and others on the back of this particular post. Thank you all for taking the time to interact. I’m pleased to see that there are so many people wishing to engage in a debate on the subject and welcome this as a potential starting point for more detailed consideration by the Party.

    Some of the comments on here were verging toward the personal and I won’t credit those with a direct response, but what I will say is that my background is neither the subject of discussion, nor is it a privelleged one and I simply dismiss the comments as ill-informed.

    I will deal with the simplest question first. Someone asked whether I was writing in a professional or personal capacity. The answer is categorically in a personal one. Most of us have ‘day jobs’ but you’ll see that my biography is a personal description and I hold the views I expressed freely of any employment I have.

    The two main points that I feel have been raised about the article are the discussion around evidence and the quesion put to me about the universality of rights (particularly voting).

    On the first of these two points, I think this is a valid challenge. I recognise that public policy aught to be based on evidence and I suggest that if this debate continues within the party – strenuous efforts should be made to develop an evidence base . I certainly know there is survey evidence out there that businesses state they have been discouraged from taking on staff because of the current burdens of employment law. They have also said that if relaxed they would consider taking on more staff. I concede that this type of evidence is only one of many that would be needed to validate the point I have made (and others have agreed with) between higher levels of regulation and lower levels of employment. I for one would value an international and time comparisons that might shine a light on the nature of this link more fully. All that said, I have one key counter arguments to make. While evidence may or may not exist to prove or disprove the suggested link, it strikes me as quite bizarre for anyone to assert that there is absolutely no link at all. If such a case were true, then a world in which employers had to return regulatory forms on their staff daily, could not dismiss staff at all, would have as much gainful employment as one in which there were no form filling and employers could hire and fire at will. I argue for neither of these two extremes, but the employment levels are certain to differ.

    On the second point about the universality of rights – I think we have a much more sophisticated argument. Rights in the liberal sense are not necessarily the same as laws that bear the same name. The fact that ‘requests for training’ and ‘flexible working’ bear the prefix rights, doesnt necessarily endow them with the heft that a right deserves. I guess what I am arguing here is that while I absolutely accept the need for rights in their purest sense (such as the right to life, right to free speech etc) I do not believe that all ‘rights’ (read for this laws) are created equal. As I said in my original article I see great value in individuals being protected from discrimination, but I do not have the same levels of respect for (sorry for repetition) rights to request time off for training and flexible working (which by the way were Labour Party policies and not Liberal Democrat ones).

    I will end by directly answering the challenge thrown to me about voting rights and whether my principle of a transaction can/aught to be extended here. The answer is no. The crucial reason is that the model I have proposed is to allow those that do not wish to be encumbered with the aforementioned employment rights to opt out. Voters may already do so without a need for further legislative intervention. This same flexibility doesnt exist in the employment field.

    There are a few more reflections on the voting point, since it prompted much discussion. Firstly, I feel the argument that because I approve of the trading of certain ‘rights’ means I must therefore approve of the trading of all rights (inverted commas ommitted with reason) is clumsy and wrong. I have already said that not all ‘rights’ are created equal and there is a need for nuance in this area rather than broad brush generalisations. Secondly, the argument’s extension to voting is unsound as there is no demand for non-voting as an outcome – no-one has asked for a reduction in voter numbers (unlike employment law, where business owners have asked for a reduction in the employment burden). Thirdly, and as a result of there being no parties desirous of non-voting; there are no potential buyers of voter rights. Lastly, there would be no reason for a transactional exchange between the (non-existant) buyer of those rights and the seller, because as has already been pointed out the electorate have the ability not to vote and exercise this very willingly.

  • Matthew Huntbach 25th Apr '13 - 10:28am

    So here we have it, some fellow from a super-elite privileged background who thinks getting a job is like buying a cup of coffee, there’s just so many jobs going out there, you take your pick from all those employers tempting you with job offers like all those coffee shops offering coffees. Oh, how clever and superior he feels to the rest of us, preaching down to us that we should all be like him, and it’s our fault that we’re not, with all these silly employment rights and things which are what are stopping us getting jobs.

    Why not go the full hog? Let people sell themselves into slavery in return for a roof over their heads and a hot meal once a day.

  • Matthew Huntbach 25th Apr '13 - 10:47am

    Alexander Ehmann

    However, if individuals don’t value the rights provided to them by their parliament, surely they shouldnt be bound to them.

    Many people don’t much value their right to vote for their parliament. So what about letting people give up their right to vote in return for a cash payment?

    The point about human rights issues is that very often they are things we don’t much care about, until WE get hit by the problem. Then we’re very glad they exist with their legal protection. That is what Liberals are for – to keep an eye on such things and be concerned about them, even when most ordinary people think them a bit remote and not important compared to bread-and-butter issues like how much you get paid and what’s the cost of living.

    You have probably never been in a situation where an employer for some reason takes against you and finds some trumped up reason to get rid of you. But if you ever do get in such a situation, you may find how very weak employment protection really is. I can assure you, the cost and stress of going through an Employment Tribunal really isn’t worth it – you damage your employer only at the cost of more damage to yourself. You are marked for life, who would want to employ someone like you? Look for example of how most whistle-blowers are treated – they lose their jobs and never get back to where they were.

    As my previous message suggests, your comment about getting a job being like buying a cup of coffee comes across as deeply insulting to all those people in this country who’d love to get a decent job, and are having to put in hundreds of applications just to get a few interviews. Sorry, Alexander, but this was a “let them eat cake” moment. I am ashamed to be in a political party with someone like you as a fellow member. The Liberal Party I joined 35 years ago was not like this.

  • During a life time in manufacturing industry from apprentice to CEO I have had the misfortune to sack people for drug abuse, drunkenness through to plain incompetence and redundancy. If the cause was real and the evidence reasonable there was never any union opposition if they witnessed that the proper procedures were followed. I have been taken to tribunal twice . Lost one (because I was at fault) and won the other.
    Having retired more than ten years ago – has employment law changed that much? Management is always frustrated that they can’t hire and fire at will and the worst managers are always the most frustrated. If additional staff are required to grow the business, staff rights may be an excuse but not a reason for delay hiring additional staff.

    The ever increasing use of short term contract employment (certainly in the sophisticated end of engineering ) appears to stem from lack of skilled and professional staff. If the reward differential (between short term contract without rights and permanent employment with rights ) is sufficient, the good ones “go contracting” and succeed. Indeed, recently I understand the redundancy program in an aerospace company removed many permanent employees whilst retaining the services of it’ s short term contract staff who they could have fired without penalty or statutory notice. That must be wrong and makes little sense for the employees and for the company.
    Finally, employee rights must not be bargained away for the possibility of future notional gains of profit share. The few thousand pounds that will probably be involved will not make for a fair exchange. Profit share and share ownership generally makes for a happier and more efficient company but only if the management is good and fair to it’s employees.

  • Steve Griffiths 25th Apr '13 - 11:22am

    Matthew Huntbach

    Absolutely, well said. I have noticed similar lofty style discussion threads on this website before, most recently on housing issues and usually by contibutors who have no idea what it is like to be poor, jobless, in social housing or homeless. As Tony Greaves said of his fellow parliamentarians on another thread that “they have forgotten what it is like to be poor (if they ever knew)” . I suspect that the leadership’s advisors and researchers have no one with these experiences contributing and advising and I see this as is a real problem for the Lib Dems both image-wise and in policy formulation. The party is loosing touch with ordinary people as it continues its long march away from the Liberal Party I knew and joined 40 years ago.

  • The negative view of rights holds that each individual should be free to do anything they wish so long as it will cause no harm to others. Your case, that the forfeiting of employment rights is a simple case of free transaction between consenting adults without any harmful consequence for others, is flawed.

    Employment rights exist almost entirely because the freedom for consenting individuals to undercut their competitors, by taking unnecessary risks or damagingly low recompense, is harmful to others. There is no possibility that such a trade-off between rights and employment will have no harmful consequences for those who do not wish to forego their legal protections. Under these circumstances then, the right to trade ones legal protections in advance of entering into employment is illiberal.

  • Surely people can accept the potential for increased regulation to lead to less productivity and therefore less employment?

    If you’re a boss and you have an incompetent employee who you can’t remove due to not being sure if you’ve complied with overly complex employment regulation then it is costing you money not just in wages but also in opportunity costs. This will mean your company is less productive and therefore you will have to pay your other employees less money (plus, you will probably be leaving somebody else who is more suitable for the job in unemployment).

    You can point out I’m talking purely theoretically but it does happen. I’ve always worked in small companies and we’re constantly in a struggle to remove somebody who simply isn’t capable of doing the job. Usually we end up resorting to asking them to resign but promising them we’ll give them a glowing reference in return. Surely everyone can see how destructive this is, not just to the economy but to individuals too?

  • “However, if individuals don’t value the rights provided to them by their parliament, surely they shouldnt be bound to them.”

    Been here before with Pensions!
    In the 80’s many in their 20’s (like Alexander Ehmann is) decided not to join the voluntary company pension scheme since it required a contribution out of their salary and retirement was a long way off… Many of these people now have insufficient pensions arrangements, something successive Government’s have been trying to do something about by making pension contributions compulsory …

  • two points of clarification are needed.

    Any discussion of universal rights must be prefaced with a description of duties and privileges and the relationship between all three.
    Duties imply an onerous burden, where privileges imply restricted pleasure, while rights skirt the fringes of the two.

    Secondly, in response to Prateek, Vince Cable said in a recent keynote speech that this area represents “one of the oldest controversies in economic thinking.”
    http://highpaycentre.org/blog/vince-cable-recent-executive-pay-increases-have-not-reflected-company-perfo

    He concludes that the complexity of of a modern economy means the results will inevitably be mixed and that “It would be arrogant and irresponsible for any politician to claim to predict the net effects.”

    So ultimately, it is not a moral question with an empirical answer, it is a matter of the details of a particular proposal being targetted precisely where it will have a positive effect.

    SportsDirect today announced it would offer shares and cash deals amounting to as much as £50,000 in some cases to shopfloor workers precisely because the retail industry suffers from high employment churn and their interest is in retaining the best staff.

    However, in an uncompetitive sector where your interest is in weeding out the unreliable and unproductive but are prevented from telling that worker they’d be better doing something else this can be a massive hindrance to improvement (I can think of several schools locally where particular teachers feel able to flaunt their tenure to the detriment of classroom standards, and I can’t believe these are completely isolated cases).

    Clearly then the competitive nature of each sector must be taken into account when legislating for employee rights, and may actually be a determinant factor.

    Oh dear, is it too much of a liberal answer to say ‘no one size fits all’?

    Similarly we can see differential outcomes at different pay scales – while it’s the low-paid who suffer from employment insecurity and thus dominate discussion on the left, high-skill workers are in high demand and actually benefit from being able to break contracts more easily.

    So whether protections are a benefit or a hindrance largely depends on your view of Britain’s labour market.

  • Alex Macfie 25th Apr '13 - 1:26pm

    Alexander Ehmann: You’ve got to be joking. OF COURSE there are “potential buyers of voter rights”; that is why there are specific laws against buying and selling votes. Anyone with a desire to ensure, by fair means or foul, that an election produces a particular result has an interest in ensuring that certain people don’t get to vote, or that their votes are cast for particular candidates. Laws and procedures exist to ensure that the electoral process is fair: that is why it is illegal to be a willing participant in any ‘transactional behaviour’ involving votes, regardless of which side of the transaction you are on.
    Yes, the electorate have the ability not to vote , and in much the same way they have the ability not to take up employment rights (e.g. not to request flexible working; not to take your full leave entitlement; not to take court proceedings should you be unjustly sacked). So (using your logic) if people choose not to take up their voting right in elections, why should they be “encumbered” with it? Why, if rights can be traded, should they not be allowed to sell their vote, which they do not intend to use, to someone who does want to use it, or get some state benefit in lieu of it? One answer is because it becomes (as one poster has put it) Hobson’s choice; the ability to relinquish the right for benefit is harmful to the interests of those who do not wish to do this. And a similar case can be made against the trading of employment rights.

  • @Thomas Long
    “Surely people can accept the potential for increased regulation to lead to less productivity and therefore less employment?”

    Agree, if there is too much regulation then lets identify those that are excessive and unnecessary and get rid of them.
    The problem is that the “shares/lottery tickets for rights” does absolutely nothing about the existing regulations concerning employment, since this policy does not delete or amend a single regulation, instead it tries to create a new employment contract and hence will actually increases the regulations around employment!

    Yes there are some things that are a burden on business, but much of this is do with the way government has gone about implementation and determining who should carry the risk and financial and administrative burdens – namely not the government.

    As for the specific problems you mention, I take it that you would be prepared to effectively take a pay cut (potentially of up to 20%) in return for shares in the various companies you worked for, if this enabled the company to more easily remove people not up to the job?

    From my long experience in the IT sector, I would suggest that where skills are in short supply, companies will still be forced to offer standard terms of employment PLUS extras such as shares/options, if it is to recruit and retain good people at a reasonable salary; without some security of tenure you can expect the wage demands of skilled people to rocket…

  • Peter Watson 25th Apr '13 - 2:04pm

    @Thomas Long “Surely people can accept the potential for increased regulation to lead to less productivity and therefore less employment?”
    Equally, there is the potential for a multinational company to preferentially close down operations in a country where the employees can be dismissed more easily, leading to less employment. Or insecure employees might spend less of their income leading to less economic activity and less employment.
    It is not simple. Even if we consider only a relationship between levels of unemployment and degrees of employee rights (a simplistic approach which instantly excludes a host of important factors) there are features that work in both directions, cancelling each other out. That is why we can’t rely on “common sense” or intuition which more likely reflects a blinkered one-dimensional view of the situation. Is there evidence that countries with stronger employee rights have worse economic performance than the UK? Is there evidence that countries with weaker employee rights have populations which are happier or better off than in the UK?

  • Prateek,
    I don’t think you’re wrong, I’m suggesting that this shouldn’t be the case.

    Different companies with different levels of turnover and workforce should be treated differently by legislation.

    Just as with the recent implementation of Leveson recommendations, a precedent has been set that legislation is better when it is ‘appropriate and proportionate’ rather than offering blanket coverage. In my experience blankets always leave someone’s toes freezing out in the cold!

    And to address an earlier point, it makes more sense to reward opt-ins than to attempt to penalise opt-outs.

  • Peter Watson 25th Apr '13 - 2:08pm

    As an aside, it strikes me as odd that much of this discussion implies that entrepreneurs are put off from investing in their brilliant ideas because it will be difficult to sack people when it all goes wrong. That does not sound like much of an entrepreneurial spirit to me.

  • *Different companies with different levels of turnover and workforce should be treated differently by legislation. Individuals are different, we must be treated equally before the law.

  • @Peter Watson
    “As an aside, it strikes me as odd that much of this discussion implies that entrepreneurs are put off from investing in their brilliant ideas because it will be difficult to sack people when it all goes wrong. ”

    This is one of the problems I have with the “lottery tickets for rights” policy, I spent the majority of my 20’s founding startup companies then a significant amount of my 30’s doing similar within established companies. All of which happened under established UK employment law. So I have great difficulty understand just what has changed to require certain employment rights to be so dramatically changed.

  • ” I suspect that the leadership’s advisors and researchers have no one with these experiences contributing and advising and I see this as is a real problem for the Lib Dems both image-wise and in policy formulation.”

    I suspect this is partly due to pretty much all of the advising going on in London by people who can afford to both live in London and take the time to advise…

  • Foregone Conclusion 25th Apr '13 - 4:47pm

    Indeed, Jennie. Episodes like this persuade me that diversity isn’t just about fairness, it’s often about good decision-making as well. Fewer white, southern, Oxbridge-educated middle-class men advising us, please! (I speak as someone who is four out of five of these things.)

  • To answer ChrisJS no employment law hasn’t changed that much. If clear procedures are used and followed correctly and the employee is at fault, then an employer can sack an employee easily and the unions won’t interfere.

    That’s the whole point. It’s easy enough to sack someone as it is. and there are 2 years before people have full rights to tribunal for unfair dismissal. The last thing employees need is to lose what few rights they have by being forced (and if this legislation comes in, make no bones about it this is what will happen to unskilled workers) to take a few token shares in the firm they’re working for in exchange for them.

  • @Jennie & Foregone Conclusion

    Yes indeed, and it rather obvious that todate I’ve seen no supporter of this policy who’s employment will actually be affected by it, although the effect on MP’s might be interesting. Perhaps Alexander will prove me wrong and show LDV how his employment at the IoD will change as a result of this policy…

  • Alex – the “shares for rights” proposals actuallly give employees a very small benefit in return for giving up significant rights. Certainly at very little actual cost ot the employer.

    More interestinly would you support employees being able to “sell” such rights in return for their fulll economic value. Say two years salary as a lump sum

  • Matthew Huntbach 26th Apr '13 - 5:02pm

    Thomas Long

    You can point out I’m talking purely theoretically but it does happen

    Yes, just as it also does happen that people are forced out of their jobs for reasons that are not to do with their competency but may instead be due well, unwillingness to sleep with the boss, unwillingness to break the law if the boss tells them to, or just more competency than the boss causing the boss to be shown up. Or many other things. Oh, it’s very easy to come up with a trumped up reason to sack someone when the real reason is something like the above. I can assure you what I am talking about here is NOT purely theoretical, I have personal knowledge of cases of all of the above.

    What we are talking about here is removal of legislation to protect people against unfair dismissal. In other words, Liberal Democrats are being urged to support being able to sack people unfairly, that is, at a whim, just because the boss takes against you for reasons that aren’t to do with competency.

  • Peter Watson 26th Apr '13 - 6:23pm

    @Matthew Huntbach “What we are talking about here is removal of legislation to protect people against unfair dismissal.”
    I think you hit the nail firmly on the head with this. Lib Dems should not be supporting unfair dismissal.

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