1. UNIFI is aTUC affiliated union representing some 160,000 workers across the financesector. The union represents staff inall grades and occupations, not only in the major English and Scottish banks,but also in investment banks, the Bank of England, insurance companies,building societies, finance houses and business services companies.
2. UNIFI welcomes the new regulations andthe opportunity to participate in the Governments further consultation. Asstated in our previous submission of May 2001 we represent a number oftemporary workers within the finance sector.There are 106,000 workers employed on fixed-term contracts in bankingfinance and insurance the second largest group after public administration,education and health.[1]
3. The two stated aims of the EU FixedTerm Contract Directive are;
to improve the quality of fixed-term work by ensuring theapplication of the principle of non-discrimination against workers onfixed-term contracts; and
to establish a framework with the aim of preventing theabuse of fixed-term contracts, primarily as a result of their successive use asan alternative to offering an open-ended contract. [2]
4. Theregulations will provide greater protection to staff employed on fixed- termcontracts and we welcome the extension of the legislation to cover pay andpensions. However, we have a number of concerns on the draft regulations,particularly that the provisions apply to employees rather than all workersand that temporary agency workers are entirely excluded from the remit of thelegislation.
5. Employment Status
Itis proposed that the new legislation should cover all those legally categorisedas an employee. We feel that thescope of the implementing legislation on employment status should be as wide aspossible and that by restricting the new rights for fixed term workers toemployees the Government is failing in its duty to implement the Directivecorrectly. We have a number of memberswho are employed on zero hours contracts and on a casual basis in the financeindustry that may well not be classified as an employee under theRegulations. It is these vulnerablecategories of workers that the Regulations should seek to protect. UNIFI isparticularly concerned that temporary agency workers have been excluded as werepresent a number of agency workers throughout the finance industry. We acceptthat that the FTC Directive does allow the Government to exclude agencyworkers. However, we would argue thatgiven the delay on the EC Directive on Temporary Agency Work, and our concernthat employers may use the agency work exclusion to avoid the impact of theRegulations, that the Government should extend the Regulations to cover allworkers which should include temporary agency workers.
6. Identifyinga comparator
Thedraft Regulations propose that less favourable treatment of fixed termemployees should be measured by comparison with permanent employees who do thesame or similar work in the same establishment. Some temporary staff may have problems finding a comparator andwe would suggest that where there is no comparable permanent worker in the sameestablishment, then comparison should be made by reference to the applicablecollective agreement. If there is nocollective agreement then comparison should be made with any appropriate workerin the same industrial sector, failing which it should be measured by ahypothetical comparator.
7. In addition,the Regulations require that comparison be made to whether the workersconcerned have a similar level ofqualification, skill and experience.The FTC Directive only allows for qualifications and skill to be takeninto account. We are concerned that theinclusion of experience may lead to discrimination as permanent staff usuallyhave longer service than those on fixed-term contracts and women often haveshorter service than men.
8. Package Approach to terms andconditions of employment
Weare concerned that the Government is proposing to adopt a package approach whenassessing differential treatment. We feel that comparison should be measuredwith reference to each individual term or condition of employment as thismethod would be transparent and easy for both employers and employees tounderstand. In any event the FTC Directive and the draft Regulations do allowfor differential treatment between comparable temporary and permanent workerswhere that treatment is objectively justified.However, it should be made clear that justification should only beallowed where it is not sensible to offer a particular benefit, e.g. an annualseason ticket loan to an employee on a six-month contract, and should not bebased on financial business needs alone.We are against the principle of the package approach as it is difficultto assess some benefits and may prove too complex for both employers andemployees. It would also lead to alarge number of test cases as it would be difficult to assess in the workplacewhether the rights to equal treatment are being met.
9. Renewal of successive fixed-termcontracts
UNIFIfeels that a four-year maximum period for the renewal of successive fixed-termcontracts is too long and would benefit very few workers on fixed-termcontracts. A stated in our previoussubmission, we would favour a combination approach of a maximum duration of twoyears with a limit of one renewal and a possibility of variation by collectiveagreement as long as the minimum requirements of the FTC Directive are adheredto. We also take the view thatfixed-term contracts should only be renewed with an objective justificationtest where the employer will need to demonstrate why the contract should not bemade permanent on both renewals and non-renewals. This could exclude sectors where permanent contracts are notappropriate e.g. entertainment.
10. Additionally,in order to qualify to become permanent under the Regulations, a temporaryworker would have had to have been continuously employed by their employerthroughout the four-year period. UNIFIbelieves that employers will seek to avoid the Regulations by ensuring thattheir employees have breaks in employment so that they will not be able to satisfythis test. We would suggest that anamendment is made to Regulation 6 that where an employer dismisses a worker orterminates their fixed term contract and the principle reason for the dismissalis to deny the fixed term workers their rights under the Regulations, then thedismissal should be automatically unfair.
11.Other exclusions
Anyfixed-term employee participating in a training, job-seeking, work experienceor temporary work scheme has been excluded under the draft Regulations, if thescheme is arranged by the Government or funded in whole or in part under theEuropean Social Fund. We would arguethat these exclusions are too wide and in breach of the Directive which onlyallows for exclusions of specific named Government or other publicly supportedschemes.
12.Definition of a Fixed-Term Contract
Asstated in our previous submission, UNIFI is of the opinion that anon-exhaustive, as opposed to exhaustive approach, should be taken to thedefinition of a fixed-term contract.
13. Communication of the new regulations
Itis important that both employers and employees are made aware of theirobligations and rights under the new regulations. We would recommend that DTI and ACAS guidance and a statutoryCode of Practice should be produced which should be well publicised when theRegulations come into force. We wouldalso suggest that the DTI works closely with the TUC, employers and unions toco-ordinate communication on this issue.
14. Enforcementof the regulations
Asstated in our previous submission, we would emphasise the need for properenforcement. Whilst a number of major companies with whom we negotiate havepolicies which outline a commitment not to discriminate against employees on anumber of grounds, in practice they are often not applied. The provisions in the draft Regulationsclearly state that a worker who believes they are receiving less favourabletreatment can initially ask their employer for a reason and if they feel thatthis is unsatisfactory they would be able to take a complaint to an employmenttribunal. We would reiterate that thiswould require clear communication to all parties involved.
15. Conclusion
AlthoughUNIFI welcomes the proposed new legislation, we have concerns that in someaspects it is not adhering to the Directives principle of removingdiscrimination against fixed-term workers.It is disappointing that agency workers have been excluded entirely fromthe legislation and that the proposed legislation is restricted toemployees. We would ask that theGovernment reconsider its stance on these points. We would also emphasise the need for clear communication of thelegislation, alongside proper enforcement provisions.
Wewould welcome the opportunity to discuss the issues further at any level. Our contact details are as follows:-
KarenCole Tel:0117 9293724
ResearchOfficer E:karen.cole@unifi.org.uk
UNIFI
Southand West Regional Office
6thFloor
TowerHouse, Fairfax Street
Bristol BS1 3BN
KarenCole/FTC/April 2002