Oral statement to Parliament

Bargaining and Industrial Relations Prospects for 2011

Introduction I’m sorry I can’t be with you in person. I have had to stay at Parliament, where the Postal Services Bill is continuing its passage…

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Edward Davey


I’m sorry I can’t be with you in person. I have had to stay at Parliament, where the Postal Services Bill is continuing its passage today.

But I wanted to speak to the conference, because this is a good opportunity to set out the Coalition Government’s approach to employment relations.

One that strikes the right balance between the rights of individuals and the needs of businesses.

The Coalition has an absolute commitment to creating the best possible business environment - so the UK economy will recover and grow, employment levels will increase and the private sector will prosper for the long-term.

But we also know how tough it has been over the past two years, as companies of all sizes have had to fight their way back from the deepest recession for sixty years.

So I can assure you we are not going to do anything which makes that continuing task more difficult. Achieving lasting economic growth is our core priority in the years ahead - and that will only come from the private sector.

Employment law review

To make sure we have got the balance right, we are reviewing employment laws. Our aim is to ensure they offer maximum flexibility for employers and employees within a competitive environment for business.

It’s vital that employment laws do not inhibit businesses from growing and taking on more staff. So, where we can make legislation easier to understand, improve efficiency and reduce unnecessary burdens, we will. The employment law review is already underway in my own department, and we expect to provide more details soon.

As part of that review we are reflecting on what stakeholders have said to us about the cost and complexity of employment legislation, including resolving workplace disputes and the employment tribunals system.

Where there are disputes in the workplace, we are keen to see these resolved at the earliest opportunity - to avoid the cost and stress to both parties of going to an employment tribunal and, where possible, to preserve the employment relationship.

However, where disputes cannot be resolved without going to a tribunal, we are committed to ensuring the system operates as efficiently and promptly as possible, for all parties. This will inform any future changes to the system.

Industrial relations

Our overriding aim is to foster a climate of positive industrial relations. One that is fair to all.

Now, you will all be aware that, in the recent Comprehensive Spending Review, we had to take some painful decisions in order to deal with the UK’s record deficit. Some are concerned that, as a result, we will see an upsurge in industrial action.

I can’t predict what is going to happen in the months ahead. But I would urge the trade unions to engage in pragmatic dialogue with employers - to minimise the impact of unavoidable changes, and to find a mutually beneficial way forward as constructively and quickly as possible.

Flexible working

Because our plans for economic growth and renewal are driven by our desire to help more people find work - and then stay there.

That’s exactly why we are committed to creating a more flexible employment system, which allows people to balance their work and family commitments.

If we help people manage their lives and stay in employment, we can avoid losing the skills, talent and energy of millions of people from the UK economy.

There is good evidence from companies already operating flexible working patterns that they deliver real benefits to the bottom line, including increased productivity and lower rates of absenteeism.

So we intend to reform the system. We will consult on introducing a shared system of flexible parental leave, and extending the right to request flexible working to all employees.

As we develop our plans we will focus meeting the needs of modern families - and the businesses that employ them.

These changes add up to a substantial package of reform. But we are not just taking a fresh look at domestic employment legislation. We are determined to champion Britain’s economic interests in Europe too.

Pregnant Workers Directive

In the short term, that means protecting the interests of British businesses on the issue of the Pregnant Workers Directive.

The Government is very disappointed by the European Parliament’s vote in favour of the directive. These proposals would impose considerable additional costs on many Member States when economies across the EU can least afford it. For the UK, the bill would be at least £2.4 billion a year - doubling current spending in this area.

So rest assured that this issue remains an absolute red line for the UK. We are working hard in Council - and with the other Member States who we know share our concerns - to oppose the Parliament’s proposals.

Principles of engagement with EU

But let me stress that we intend to play a strong and positive role with our European partners, so we are equipped to deal with the challenges and opportunities thrown up by an open and competitive global economy.

That also requires the EU to adapt. The priority needs to be growth and global competitiveness - not introducing more employment regulation.

In future, UK Ministers will get involved earlier and more strategically in EU policy development - and we will push for smart regulation to be embedded within the policies of the European Commission, Parliament and Council.

It’s important we move beyond stale debates on issues such the Working Time Directive and its ‘opt-out’ - and instead recognise and respond to the changing nature of work and the structural economic problems that exist across Europe.

Our job is to help more companies start up and grow - by working with our partners in Europe, and creating the right business conditions here at home.


We believe that a carefully calibrated framework of employment law, which balances the needs of employers with the rights of individuals, is an important part of the picture. We must ensure we promote growth, not inhibit it.

As we work on the detail of our proposals in the months ahead, we will draw up a blueprint that gets that balance right.

We are not about to about to make life more difficult for companies still feeling the aftershocks of the worst recession in sixty years. So we will not tie them up in red tape or weigh them down with new regulations.

Instead, we want to work in partnership with employers and their employees - getting our economy growing once again to create jobs and secure prosperity in the years ahead.

Thank you.

Published 2 December 2010