How does UK employee protection compare with other countries?

Rather handily, the OECD complies a set of international indicators of employee protection, the latest version of which was revised in September 2010, using 2008 data. The survey looks at “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”.

What does it show?

First, that protection for employees in these respects in the UK is already close to the lowest of any country in the OECD survey, only slightly higher than Canada or the USA. All of the much touted BRIC countries (Brazil, Russia, India and China) offer employees greater protection that the UK does, for example.

Second, and particularly pertinent to the current British debate over whether the levels of employee rights are putting off firms from creating more new jobs, the UK is also in a very similar position on the specific measure of regulation for temporary forms of employment:

Overall national surveys such as this can miss some of the nuances in individual sectors or niches (e.g. regulation of employment rights for micro-sized start up companies are rather lost in the mix), but the overall picture is clear. Nick and Vince were right.

* Mark Pack is Party President and is the editor of Liberal Democrat Newswire.

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  • Wait a second – how in the name of sanity can the UK be 3rd from the bottom in employment protection while China (yes, that China) is 9th from the top, in a list of the top 40? Something seriously skewed about this.

  • @Mike either that, or maybe the Tory mantra that “labour flexibility” makes money needs reconsidering. I’ve made similar observations about Germany – economic powerhouse, and a byword for worker rights.

  • Richard Dean 28th May '12 - 1:52pm

    The temptation is always to take statistics as stand-alone facts, but wouldn’t it be better to correlate them with something? Do the countries with low “employment protection” also have higher rates of employees being fired, for example, or lower wages?

  • Richard, Phil, the OECD have looked into the relationship between employment protection and unemployment. They found no correlation. Now there may be other good reasons to weaken employment protection, but I’ll let those who support doing this make the case, because I can’t see it.

  • Whilst the report is probably the best you can get bearing in mind the compexity of trying to compare so many differing systems/countries (as acknowledged in the report), there are a few things you have to watch out for.

    The report (for obvious reasons) is historical, it can only tell us the position as at 2008. This means that new regulations such as the Agency workers Directive (the first gold plated EU directive signed in by the LDP) will not be reflected in the data.

    A lot of the argument on this issue has been about the worry that small companies have when hiring people and if there should be exemptions, some say there should and some say there shouldn’t. As per the comment from Phil Culmer above, Germany is often cited as a powerhouse with lots of employment protection. But this report shows small German firms do have exemptions from regulation. If we are going to cite Germany as a model then surely we should consider such exemptions as well (evidence based policy and all that sort of thing)?

    On a similar theme, it is also interesting to note that other countries have used exemptions to encourage employment of certain groups, perhaps this is something else that we should consider? The report shows that in other countries where this has happened it has produced some positive outcomes.

    As an aside to the comment by Mike Cobley, the OECD do acknoweldge that whilst it is OK to have such laws, it may be that taking advantage of them may not be easy, it cites some examples on page 27. So we should also concentrate on making protection effective, as opposed to it being just window dressing (not much different to any other law really).

  • Stephen Donnelly 28th May '12 - 9:15pm

    As the comments above make clear, the degree of employment protection is not easily represented by statistics. In theory there is strong protection for employees in China, in practice access to that protections is not uniform. Foreign businesses can easily find that the law gives their employees jobs for life, whilst local businesses run by party members need not fear the law at all. Similarly the German market appears to have been liberalised, but this has happened through a partnership between labour (unions) and business, and is held together by social rather than legal constraints. The only conclusions that I can draw is that overseas comparisons are of very little help to us in deciding what we should do in our own country because the base social and economic conditions vary so much.

  • Paul Reynolds 29th May '12 - 7:52am

    Labour market flexibility and rigidity are not homogeneous concepts. An attempt here has been made, admirably, to make them so, but for example, are statutory workers councils and ansence of ‘demarcation’ rigidities or flexibilities ?

  • Dave Eastham 31st May '12 - 10:51am

    I thought the essential point of the article is to point out that Nick and Vince are right. Tory ideological fantasies about employment law are indeed bonkers, with no meaningful evidence behind them. (Saloon Bar ”common sense” is not evidence). The extension to achieving employment rights to two years is also bonkers but it seems that has been conceded, amongst other things, as part of the Coalition “horse trading”. There seems to be a tendency in the comments on this thread to focus on de-constructing the OECD data and, if I am not misinterpreting the comment; (apologies if I am), to suggest that as historical data it is suspect, as the conditions on the ground in the here and now the conclusions may not be quite as applicable as it first appears.

    There are many contributions out there in the bloggosphere already which sum things up much better than I could without possible plagiarism. Amongst them is the flip chart fairy tales blog, which is a blog of an HR professional who is, I find fairly objective about such matters. Look at . Especially these four more recent posts
    The Beecroft report – Snake Oil, Doctor Good and other quack remedies
    Posted on 23 May, 2012
    You don’t have to be a leftie to think Beecroft is wrong
    Posted on 25 May, 2012
    Britain has less employment protection than the BRICS
    Posted on 28 May, 2012
    Wooo! Here comes the regulation bogeyman. Again.
    Posted on 31 May, 2012

    Most of the questions raised by others in this thread are well covered by these. It does seem that the old adage that the essential Tory attitude to the world of work, is that the “leaders of Industry need incentives (bonuses – deserved or not), whilst the rest need punitive measures (minimal employment protection) to do the same thing – keep working, remains essentially true!.

  • @Dave Eastham

    I would guess some of your comments are directed at me due to the age reference. I think the point of the article was to actually use the report as evidence of how V & N were just so right, e.g. the comments about how in the BRIC Countries have better protection etc, without mention of the warnings in the report itself regarding enforcement.

    The reason that I posted is because it’s quite a dangerous game to play, it is historic data (as it obviously takes a long time to sort out a report like this) and can not take into account changes. Also, as I said, if you’re going to cite nations as a shining example of protection then it may be wise to check what they don’t protect.

    So no it was not a “de-constructing” job, I think the report itself is pretty good and, as I said, it’s probably the best you’ll get – but I certainly don’t think it can be used as evidence to claim that V & N were correct (especially as some of it seems to disagree with them).

  • Dave Eastham 2nd Jun '12 - 11:22am

    @ Chris_sh and others

    Again, apologies if you feel I misinterpreted what you are trying to say. It remains, that if the objective data (OECD reports), do not fit the the counter-factual impressions of those (in general, not being personal here) reading it, then here is sometimes a tendency (by everyone, including me!) to try to de-construct inconvenient “facts” to seek a more “comfortable” interpretation, more in line with pre-conceptions. This is not a tendency exclusive just to employment law. Yes, there are on the ground examples of the “theory” not being met in particular practice. Apple’s relationship with Foxconn and the working conditions of their Chinese employees being a case in point . That does not invalidate the OECD report and I’m glad that you say that is not your objective.

    That does not mean that there are not outliers in the UK as well. We have indeed a “Regulation Lite” set of employment laws, despite the claims of the CBI and others and we have our own “outliers” on the ground as well. Evasion of Minimum Wage regulations for one. When I was a local Trade Union rep I saw this sort of thing from the ground up. When people were bullied and harassed and put upon in blatant disregard of the U.K. employment law as it is. Sometimes through sheer ignorance and sometimes just nasty. Sometimes we were able to stand up for those individuals and secure them some sort of Justice. (By the way, in thirty five years never once as far as an employment tribunal and for every (rare) “chancer” trying it on, were a hundred of ordinary people, who just wanted to get on with their lives without hassle). Sometimes nothing could be done, partly to the inadequate nature of UK employment law but mostly because the individuals themselves, chose to remove themselves from harms way, move on and not pursue things. Justice was not served.

    I agree that Vince and Nick were correct in their use of the term “bonkers”. I also agree that too much should not be made of the Enterprise and Regulatory reform Bill, which could be law by the end of June. It has some quite disturbing things in it.

    A good analysis of the whole subject can be found on the Xpert HR website at . We should be paying more attention to the whole question of where employment law is going and how far we are letting the Tories get away with their ideological evidence free fantasies, under the smokescreen of “Red Tape”.

    Finally, just to light-heartedly completely lower the tone of the debate see – . Comes under the heading of “Many a true word spoken in jest” I suspect.

    Dave Eastham

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