PracticeConsultingView from the House.

View from the House.

On 6 June, the government's Employment Relations Act came into force which introduced statutory recognition of trade unions in firms with more than 20 employees. In preparation, the government has published a code of practice for 'access to workers during recognition ballots'.

This sets out the procedures and rules for the conduct of workplace votes on whether or not a union should be recognised.

Reading that code brought back memories of a bygone era, of conflict between what were then called the two sides of industry, between management and workers, capital and labour. The era of the Ian Carmichael and Peter Sellers film I’m alright Jack. The code uses words such as ‘worker’ instead of ’employee’. It is based on the presumption of inherent conflict between employers and employees. This is an out-moded assumption and reveals a government out of touch with business today.

Who is a ‘worker’? Is it the technical director who spends 95% of his time on the shop floor; is it the bought ledger clerk in a comfortable office? Is a ‘worker’ a machine-toolist with £5,000 of share options?

This Act, and the secondary legislation accompanying it, is another of the many new burdens on business with which our industry is being hampered.

The regulatory cost of business has increased by some £10bn since 1997 and more is on its way to the statute book. One statutory instrument that went through parliament in May which reduces regulation was audit exemption which raised the threshold below which a company need not have an audit from a turnover of £350,000 a year to £1m.

This was a government measure which had the opposition’s full support.

But it could have gone further. Under EU legislation – to which so much of our law-making is subject – a maximum turnover threshold of £4.8m would be allowed. Realistic estimates say raising the threshold to £1m will save industry about £100m a year – about the same as the burden put on industry by the requirement to administer the Working Families Tax Credit through the payroll. Raising the threshold to £4.8m would have saved over £250m which would have eased the increasing administrative burdens being placed on British industry by this government.

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