What New Employment Laws Might Be Applied in the UK Soon?

This week Lawyer monthly takes a look at the potential for new employment laws in the UK. Below Leon Deakin, Partner and Head of Employment at Coffin Mew, explains what’s happening with employment law in other countries and whether these measures could be adopted in the UK within the near future.

Changes in technology, methods of working and business practice mean the modern workplace and job market are very different compared with previous decades. Some aspects of employment law are out of touch with the demands of this modern workplace and this problem is becoming greater with each passing year as the law gets left further behind.

The rules around ‘employment status’ is the best example of this issue and is evidenced by the deluge of litigation involving Uber and other market disruptors. Whilst the Government appears to have tacitly acknowledged the problem with the Taylor Review into modern working practices, the response it outlined in February highlights its priorities lie elsewhere and lack of appetite for undertaking the hard work that real change necessitates. So here are some ideas put forward in other jurisdictions or sectors:

1. 28-hour working week in Germany and right to return full time

It was reported earlier this month that the German metalworkers’ union had struck a deal so employees wishing to take time out to look after children or ailing parents have the option to reduce their working week to 28 hours for a total of two years and claim the right to return to full-time employment afterwards. The union has called on the German government to enshrine the right to return full time in law, as they believe over a million employees in the country are working part-time against their will.

In principle I can see the benefit of this sort of move as it allows an employee some breathing space without the fear of losing out and gives the employer clear boundaries to work within, which at least provides certainty. Of course, the right to be able to compel your employer to take you back on the same or similar basis to that on which you worked originally (presumably subject to some caveats) is a concept we should be familiar with given the existing protections around returning after maternity leave etc. Therefore, this idea is not particularly ‘revolutionary’. However, the longer fixed nature of the period and reduction in hours is very different to our system and therefore worth considering.

However, I anticipate smaller employers may struggle to accommodate this idea. It seems to create flexibility and certainty for employees but do exactly the opposite for employers that will have no idea of which employees will take it up, for how long or whether they will return full time at the end. So perhaps this might be suitable for larger companies but surely not all. Especially in a workplace that needs to be flexible to compete in the modern world.

I also think in practice that deciding how long to set the ‘fixed’ period of reduced working with the right to return after is problematic. Unless it is on a case by case basis, which would no doubt leave room for significant disputes, setting an arbitrary amount could just end in everyone being unhappy! It would be interesting to understand why two years was chosen in Germany, but I suspect it felt long enough to give employees some security without being too onerous on employers. Given these obstacles, we are probably back to having a right to request on a case by case basis, which sounds familiar!

2. The ‘liquid’ workforce

It is trendy in the US to talk about the increasing need for and competitive advantage arising from having a ‘liquid workforce’. The driver seemingly being the increasing desire of the workforce to engage flexibly, but also to enable businesses to be agile and respond quickly to fluctuating markets. Indeed, nimble tech start-ups and scale ups, and their ability to react and capitalise on market opportunities, is oft quoted as the origin of the idea.

In practice this liquid workforce tends to manifest itself by either using a blend of employees, workers and specialist contractors or by having an employed workforce which can be flexibly deployed as and when needed across a number of different areas and roles.

Unfortunately, whilst a great idea in principle a truly ‘liquid workforce’ would be difficult to implement for a large proportion of UK businesses in my opinion without changes to the law on employment status, as well as perhaps a profound change in attitude of all concerned.

First, with the rules around employment status so outdated and difficult to apply it is not as easy as it should be to achieve the appropriate blend of employees, workers and contractors. Especially if there is a need to have control over their output. Second, using an employed workforce which can easily be rolled out or moved into different areas as and when needed by the employer is quite tricky under our current statutory rules, not least the terms of employment that have been signed.

Unless employers are prepared to offer a guaranteed amount of work it will pay for, regardless of whether it is needed or not, I suspect most would revert to only guaranteeing a minimal amount with the requirement to accept more if offered. This basically amounts to a form of ‘zero hours’ and we all know how politically popular this is.

In addition, in the start up and scale up arena where this idea originates from, it is generally accepted that a degree of having to work where and when needed is par for the course and necessary. Not least as the very survival of businesses may depend on it.

However, in my experience the goodwill and flexibility this requires tends to be less present where individuals work in larger organisations with clearly defined ‘roles’, ‘duties’ and ‘hours’. Of course, part of this attitude may well result from the individual quite rightly pointing to the nature of the role they accepted being what they chose to do, and therefore not wanting or being able to do something altogether different.

Accordingly, to make this work practically as well as contractually the terms of the employment offered would need to be clear at the start (i.e. that either the days and hours and / or duties and location could vary).

I am not sure how many individuals would take or subsequent enjoy a job where the employer has complete freedom to change the key terms and duties as and when they need, even if there is a guaranteed minimum income. A percentage of those that would might also prefer to be contractors. So, it is very likely some parameters and boundaries would be required, but this leaves room for interpretation and therefore dispute when change is implemented.

For these reasons, for now, I would anticipate that a truly liquid workforce of either type is something only likely to be attainable by those very small and nimble businesses or the very large, which can create a bank of flexible staff who they pay but can deploy in different ways.