Shares For Rights – Government quietly revives one of its stupidest ideas

Remember the government’s ‘shares for employment rights’ idea? It was rejected by almost every business surveyed during the consultation, many coming to the same conclusions as I did when it was first announced.

The House of Lords thought it was a daft idea too and threw it out.

Then, on Tuesday, while everyone was busy talking about Margaret Thatcher’s funeral, the government quietly re-introduced the proposal. As far as I can tell, only Personnel Today and XpertHR noticed.

It’s a low bar, I know, but this is one of the Coalition’s stupidest pieces of legislation. Almost no-one wants it and there is absolutely no evidence whatsoever that it will make a scrap of difference to the economy. So why are they pursuing it?

Michael wonders if it is a continuation of Margaret Thatcher’s legacy.

Can the employee-shareholder contract proposals be considered a part of Thatcher’s legacy to UK employment law?

In a superb piece on the impact of Margaret Thatcher’s Government on the workplace(XpertHR subscription required) Darren Newman looks at the “step-by-step approach to reform” adopted by Thatcher’s government, and at the “chipping away” at laws on trade unions that took place.

Newman notes that “the step-by-step approach to employment law continues [today], so there are always employment law changes on the horizon.”

He also argues that “one important legacy of the changes made in the 1980s has been the shift in the focus from trade unions and industrial action to individual rights.”

The employee-shareholder contract proposals are focused on nothing if not on individual rights.

Economist David Blanchflower put forward an interesting theory as to Margaret Thatcher’s economic legacy in a piece for the Independent earlier this week. Blanchflower noted that “the UK labour market is highly flexible, which may well be Mrs Thatcher’s most significant economic legacy. Strikes are largely a thing of the past.”

Could it not be argued that the employee-shareholder contract proposals, should they come into effect, might further increase the flexibility of the UK labour market?

I’m not so sure this measure is a Thatcherite legacy. I’m not even convinced that it will increase labour market flexibility. Any gain from being able to hire and fire after 2 years employment, without risk of a tribunal claim, will surely be outweighed by the additional administrative overhead and potential legal arguments over values of shares. The post-employment disputes may simply shift from one court to another.

But the other thing many people forget about Thatcher, Tebbit and most of the 80s Tories is that they were pragmatists. One of the reasons they didn’t mess too much with employment protection was that they wanted to encourage people to pursue their disputes through the courts and not through industrial action. They raised the unfair dismissal threshold to 2 years and left the rest of the system intact. As I’ve said before, the Conservative Party was quite keen on employment law, and with good reason.

As Darren says in the article linked to above:

One important legacy of the changes made in the 1980s has been the shift in the focus from trade unions and industrial action to individual rights. In 1979, if you were sacked by your employer you could go to the union and, if it backed you, the workplace could be brought to an immediate standstill until you were reinstated. Nowadays, battles over the treatment of individuals are fought in the employment tribunal rather than on a picket line. Today’s employers – which may complain that their ability to manage is impaired by complicated and legalistic employment law – would be envied by their counterparts in 1979.

In many ways, today’s employment environment is easier for employers than it was in the 1970s and, compared to that of most other developed countries, fairly light touch. Most employers seem to think shares for rights would complicate matters. Surely a pragmatist like Thatcher or Tebbit would leave well alone.

My hypothesis is slightly different from Michael’s. Shares-for-rights is not an extension of Thatcherism but of the current Conservatives’ idea of Thatcherism. It is labour market reform viewed through the prism of ideology – a half-baked ideology based on a distorted memory of the 1980s. The great woman won the day with free-market ideas and labour law reform so we must do more of that too.

The result is pointless legislation which few employers support and which the Thatcherites of the 80s would surely have canned as soon as their supporters in business told them what a crap idea it was.

Update: HR Bullets noticed too and notes the Government’s target implementation date of September this year.

John Band reckons it will be killed off before then:

Let’s hope he’s right.

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5 Responses to Shares For Rights – Government quietly revives one of its stupidest ideas

  1. Pingback: Shares For Rights – Government quietly revives one of its stupidest ideas - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. This is an absolutely brilliant post, and I am very proud indeed to have played some part in inspiring it.

    I’ve updated my post with a link to this piece, and have also added a response to your points, too. As you will see, I agree with you to a much greater extent than you might have expected!

    Here’s the link for my updated post: http://www.xperthr.co.uk/blogs/employment-intelligence/2013/04/employee-shareholder-contract.html

    And thanks for writing such a great post here!

  3. Pingback: Employment Law Solicitors | Top employment law blogging this week 15.04.2013 to 21.04.2013

  4. Pingback: Popular Capitalism and ‘Shares for Rights’: Top 5 blogs you might have missed this week | British Politics and Policy at LSE

  5. Pingback: Chris Hadrill | Top reads this week

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