TISC PN28 0405



Telephone: 020 7219 5777/5779

PN 28 of Session 2004-05


Publication of Report on UK Employment Regulation

The Trade & Industry Select Committee today publishes its Seventh Report of Session 2004-05, on UK Employment Regulation (HC90). Amongst its conclusions are:

That employment regulation in the UK is not excessively burdensome on employers or a threat to UK competitiveness. But future regulation should only be introduced where there is a clear problem identified which can only be remedied by regulatory intervention. The Committee supports the goal of combining flexibility with social cohesion, set out in the Lisbon Strategy.

  • That the National Minimum Wage has been successfully introduced and reviewed. The Committee welcomes the extension of the minimum wage principle to 16 and 17 year olds, albeit at a lower rate. The Committee warns against removing the lower minimum wage rate for 18 to 21 year olds immediately but expect its continued convergence with the full National Minimum Wage rate.

  • Although there are abuses in the area of the employment of temporary workers, the Agency Workers Directive does not represent the right way to address these. Employers' concerns have focused on the six week period after which agency workers will be entitled to equivalent pay and conditions to their permanently employed colleagues. The Committee think that the scope of the directive is more important. Agency workers should be entitled to equivalent working conditions immediately but we think there is fundamental difficulty in determining and enforcing an 'equal pay rate'.

  • The Committee is not convinced by the arguments for retaining the opt-out from the Working Time Directive, which has enough flexibility to accommodate the needs of business. The right to request flexible working for the parents of young children has been well received and the proposal should be extended to all those with caring responsibilities. With the numbers of working mothers rising and an ageing population, employers will find that accommodating the caring obligations of their employees is a necessity, not a luxury.

Martin O'Neill, Chairman of the Committee, said "Employment regulation has been contrasted with flexibility for too long. In reality, regulation need not mean inflexibility. Individual regulations should be judged on their own merits. Future regulations should be designed with the goals of the Lisbon Strategy in mind."

Copies of these Reports will be posted to all those who submitted evidence to the Committee. If you wish instead to collect your copy on publication, please telephone the Committee's offices. Further copies may be purchased from the Stationery Office (enquiries: 0870 600 5522) and the Report will be available on our website soon after publication at http://www.publications.parliament.uk/pa/cm/cmtrdind.htm.

No advance or embargoed copies will be available for this Report.

For further information please call the Committee Office on 020 7219 5777/5779.

21 March 2005