Public sector pay demands and employees’ rights to benefits under the spotlight at TUC conference.
Workers’ rights to benefits and public sector demands for above-inflationary pay increases were two key issues that were hotly debated at the Trades Union Congress (TUC) conference last month.
Business and enterprise secretary John Hutton announced plans to increase fines for employers and employment agencies that pay staff less than the minimum wage or make illegal deductions from wages for transport or accommodation. This increase comes only nine months after the government last raised the fines to £224.70 for each worker paid less then the minimum wage along with a penalty of £5,000 for employers that persistently flout the legislation.
The unions urged him to go further by backing the Agency Workers’ Directive which would give temporary agency workers the same rights in terms of pay and conditions as full-time employees. The directive was first proposed by the EU in 2002, but has yet to receive approval. Hutton said the government would not introduce the directive if it damaged Britain’s flexible labour market.
Richard Lambert, Confederation of British Industry (CBI) director general, had previously told delegates that the government should stand firm against EU and union demands to back the directive. He said it could increase costs for businesses and impact negatively on the UK economy’s competitive position. “The UK’s relatively flexible labour markets are a key source of competitive advantage,” he explained.
Just prior to the TUC conference, the CBI/Pertemps Employment trends survey 2007: Fit for business revealed that 65% of employers said the directive would significantly increase costs, 62% said it would damage flexibility and 58% expected additional bureaucracy.
Public sector pay came under the spotlight when Prime Minister Gordon Brown took the conference stage. He said he would not bow to union leader demands for higher public sector pay or to put an end to staged pay settlements. Instead, he made it clear that pay increases will be kept in line with the Treasury’s inflation target of 2% as measured against the consumer price index. He said: “Pay discipline is essential to prevent inflation, maintain growth and create more jobs.”
In the same week as the conference, the Public and Commercial Services Union (PCS) announced plans for a consultative ballot of 270,000 members working in over 200 different government departments, agencies and non-departmental public bodies on further strike action later this year over various issues, including pay.
Public sector pay increases are below those in the private sector, according to The Office for National Statistics’ September 2007 Labour market figures. Average annual earnings excluding bonuses, rose during the 12 weeks to the end of July by just 2.9% in the public sector, compared with 4% in the private sector.