EU – Employment

This is part of the EU Fact File

Verdict: OUT – UK Unemployment increased significantly since joining the EU in 1973. Although some can be blamed on various recessions or bad political decisions the picture is consistent and unemployment has never been back down to 1971 levels since joining the EU. Workers rights seems to be based on neighbouring countries like the Nordics (including EEA country Norway) has always been ahead of the rest of EU and Switzerland (EFTA not bound by WTD) is similar to France and Italy nearby. Therefore there is no proof for that the UK would have different workers rights outside the EU and the UK would probably had assimilated itself to workers rights in Holland, Belgium and France if outside EU.

Employee Rights

EU worker has certain minimum rights(4):

  • health and safety at work: general rights and obligations, workplaces, work equipment, specific risks and vulnerable workers
  • equal opportunities for women and men: equal treatment at work, pregnancy, maternity leave, parental leave
  • protection against discrimination based on sex, race, religion, age, disability and sexual orientation
  • labour law: part-time work, fixed-term contracts, working hours, employment of young people, informing and consulting employees

All of the above makes sense as we should not compete between countries on any of the above but provide an equal playing field to everybody.

To gauge the benefits of the EU we ought to compare with the US similar laws. In case the UK had stayed outside the EU we would like have leaned to the US for direction of laws.

Comparison between UK and US8:

  • “At-will” validity: Similar to most countries outside the U.S., at-will employment does not exist in the U.K
  • Non-compete agreements: While non-competition agreements are sometimes included as part of U.K. employment contracts
  • Background checks regulations: U.S. allows most employers to conduct background checks without many hurdles. U.K. allows these checks, but they are only allowed when relevant to the job to be performed
  • Different right-to-work requirements: In the U.S., proving the legal right to work in country is often the responsibility of the employee. Companies can be fined for right-to-work issues, but the price tag is minimal when compared to the penalties for such violations in the U.K
  • Changing employment contract terms: In the US, an employer may change the terms of an at-will employment contract virtually at any time, without consulting the employee. In the UK, employers don’t have anything like that kind of discretion
  • Employment discrimination: There are many similarities between US and UK employment discrimination laws (see comparison below as well)
  • Employer consultation prior to mass layoffs: When proposing to lay off 20 or more employees, a UK employer must consult with the affected employees’ trade union or other representative. The US’s Worker Adjustment and Retraining Notification Act (WARN) covers (generally) employers with 100 or more employees
  • Protections following M&A and other transfers: The US has certain worker-protection laws in place in the event of a merger or acquisition. For example, the WARN act mentioned above requires employers with 100 or more employees to give workers advance notice of certain M&A transactions. UK worker protections related to M&A transactions are comparatively strict and are dictated by the Transfer of Undertakings (Protection of Employment) regulations (TUPE). TUPE applies to all businesses, regardless of size

So main difference here is contract law where you can be an employee “at-will”, where in the UK you would always have a contract even if nothing has been signed.

Anti-discrimination

Lets look at what year where anti-discrimination laws was introduced in the UK and US after joining the EU in 1973:

  UK7 US6
Disability 1995 and 2005 1990
Equal Pay 1970 1963
Race 1976 1964
Sex 1975 1964
Age 2006 1968 and 1975

These are just examples but it seems employment law in the US is not too bad and many laws was introduced before the UK and EU did it.

Working Time

The EU Working Time Directive (WTD) was introduced in 1993, 2000 and 2003. This directive also covers the EEA but not EFTA.

However in reality this is a world wide phenomenon where rankings in less annual hours worked (click to enlarge)9:

image

Blue is EU, orange is Europe non-EU and green is rest of the world.

Being in the EU does not guarantee good working time; just look at Greece.

However Switzerland being outside the EU and not bound by the WTD is doing much better than the EU average.

Norway being in the EEA is bound by the WTD and Japan and Canada is just above the EU average.

Non-Working Time = Breaks and Leave

Many different sources quote1 and 2 we can thank the EU for all the rights we have.

It is hard to prove when we do not have a parallel UK that did not join the EU – so in order to judge this we need to look at other countries outside the EU10:

image

US is a disaster (zero) and Japan/Canada is below average.

Australia and New Zealand is about average even though not bound by the EU rules on this subject.

Norway being in the EEA has to follow the EU rules but seems more to follow what Scandinavia (Denmark, Finland and Sweden) is doing.

Switzerland is following the basic EU rules without having to.

There is no reason to believe if the UK had not been in the EU we would have followed US or Japan but more likely like Norway and Switzerland would have followed what nearby countries does.

Unemployment

Well this was an easy one to looks at.

It is clear since the UK joined the EU in 1973 – unemployment went up to a level not seen since the great depression.

Interesting enough this data is NOT available on ONS and I had to get it off the National Archives as a scanned copy (click to enlarge)2:

Unemployment

The peak in 1985 being bigger than in 1933 is that the UK also had more people in 1985 than in 1933.

But it seems that unemployment after 1975 cannot all be explained by recessions or political issues.

The “official” ONS statistics does not start until 1971 (click to enlarge)1:

image

So joining the EU did not protect us against recession nor bad politics.

It is hard to say if we would have been better off outside the EU but compared to the great depression it could hardly get any worse.

One thing is sure the unemployment rate went up after joined the EU and never came back down to 1971 level again.

The low unemployment in recent time may be due to zero hour contracts and might not reflect reality as per 2016 nearly 800,000 people are on these contracts5.

Additionally5:

In November 2015 there were around 1.7 million contracts that did not guarantee a minimum number of hours where some work had recently been carried out, according to the latest ONS survey of businesses. For May 2015 the equivalent estimate was 2.1 million

Questions to be asked:

  1. The EU does not disallow zero hour contracts – so all the above “workers rights” what is it good for then?
  2. So working time directive WTD does not guarantee low working hours and many countries not bound the rules are doing just as well?

Good Articles (subscripted)

  1. http://www.theguardian.com/money/work-blog/2013/jan/24/europe-legacy-uk-workplaces
  2. http://www.independent.co.uk/news/uk/eu-brexit-uk-referendum-leave-employment-rights-disaster-explained-a6921126.html

References (superscripted)

  1. https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment/timeseries/mgsx
  2. http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/lms/labour-market-trends–discontinued-/january-1996/unemployment-since-1881.pdf
  3. https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/timeseries/mgrz
  4. http://ec.europa.eu/social/main.jsp?catId=82&langId=en
  5. https://www.ons.gov.uk/news/news/justover800000peopleonzerohourscontractformainjob
  6. https://en.wikipedia.org/wiki/Employment_discrimination_law_in_the_United_States
  7. https://en.wikipedia.org/wiki/United_Kingdom_employment_equality_law
  8. http://www.radiusworldwide.com/blog/2012/2/us-vs-uk-employment-law-whats-difference
    http://www.radiusworldwide.com/blog/2015/7/us-vs-uk-employment-law-whats-difference-part-2
  9. https://stats.oecd.org/Index.aspx?DataSetCode=ANHRS
  10. http://www.oecd.org/els/soc/PF2_3_Additional_leave_entitlements_of_working_parents.pdf

Change log:

  1. 15/03/2016: Created page

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