Employers will need to demonstrate they value their employees

Employers will need to demonstrate they value their employees

Regardless of the outcome of next month’s general election, the next government is set to open an era of increasing regulation in the workplace. All parties are promising to champion workers’ rights and give them a greater role in the companies they work for. Firms need to prepare for this change and be ready to demonstrate they value their employees.

Writing in the Financial Times last week, Theresa May promises that the next government will “ensure that employees have a greater stake in the companies they work for”. She highlights the importance of information sharing within an organisation and vowed to “ensure that there is representation for workers on company boards and that every employee has a statutory right to receive information about key decisions affecting their company’s future”.

Under the Tories’ proposals, publically listed companies will not have to appoint a workers’ representative directly to their board. Instead, they will be required either to nominate a director from the workforce, designate a non-executive director as the ‘employee representative’ or create an employee advisory panel.

As for information sharing, it is unclear how this will work in practice, but Theresa May is calling for a “statutory right” for employees to request information. It is worth noting that the conservatives are yet to decide on how they might strengthen the corporate governance of privately-owned businesses.

Nevertheless, this ‘statutory right’ is an evolution in politicians’ thinking around corporate obligations. Information sharing will now be enshrined in law. We believe this trend is set to grow. Engagement levels and productivity rates are low in the UK and measures to improve employee engagement are increasingly popular.

According to Labour’s manifesto, “work should provide people with security and fulfilment”. The manifesto detailed a 20 point plan on employment rights which promises to scrap the public sector pay cap, reintroduce national pay bargaining and ban zero-hours employment contracts. Jeremy Corbyn also hopes to give more strength to trade unions. If Labour were to win, the Trade Union Act 2016 would be repealed, with all workers given the right to union representation.

Labour also wants to move the ‘burden of proof’ in the gig economy so that the law assumes a worker is an employee unless the employer can prove otherwise. Redundancy laws would be toughened to bring them more into line with parts of Europe. Paternity leave would be doubled to four weeks and paternity pay increased, and a consultation would be launched on statutory bereavement leave for workers who lose a close relative.

Meanwhile the Liberal Democrats promise to build on Matthew Taylor’s review into modern employment practices but are focussed upon improving conditions for public sector workers, announcing that they would lift the 1% cap on public sector pay and increase wages in line with inflation if elected on 8th June.

Beyond increasing regulation, the need for engaged employees will become more pressing as employees can easily share their views publically and move from organisation to organisation easier than ever before. Organisations need to consider their employees as key stakeholders, prioritise their needs and let their interests inform their corporate strategy.

Back to thoughts