Bill Midgley column
Jul 15 2003 By Bill Midgley, The Journal
The relationship which any business has with its workforce is naturally vital to its success.
However, I do have some serious concerns about the Government's intention to introduce an EU directive, supposedly aimed at improving worker involvement in business, by giving the workforce the right to be consulted before decisions are made regarding redundancies or closures of workplaces.
The recent example of an insurance company dismissing its staff by sending text messages would be banned by the new legislation, and I can quote an example of an insurance company who a dozen or so years ago dismissed a number of its staff in Newcastle via a faxed message.
All that shows is technology has changed, not the ability of management to act in an arrogant fashion.
However, best practice should not require regulation to ensure it is enforced. And this is exactly what the new proposals are about, although they will not affect companies with less than 50 employees.
A new law, which will be introduced on a progressive basis from 2005 onwards, depending upon the size of the business, will mean that employers must consult their workforce regarding the economic prospects of their business, outlook for jobs, potential redundancies and closures or takeovers and mergers. Some of such information might be deemed to be sensitive to a business competitor or to the financial markets.
Perhaps alarmingly, there is a proposal that any changes in the constitution of the workforce will require the agreement of at least 40pc of staff.
Communication with employees is essential, but so is management's need to manage, and particularly on occasions to make decisions to ensure that the business survives. Successful businesses do not succeed by operating on a consultative basis, but by keeping themselves fixed on their main objectives and often having to react to volatile market pressures, even if in the short term that is detrimental to the business.
Whilst yet more regulation, which according to British Chambers of Commerce will cost £800m, is being introduced, the European economies continue to decline.
Europe is looking at ways of stimulating its growth and following our own cut in interest rates last month, we are likely to see further falls in European rates in an attempt to drive down the value of the Euro.
Interest rates alone will not ensure that the desired result will be achieved. Business in Europe, as in this country, needs to become more competitive, something which the new proposals will not achieve.
We compete for our economic survival with the rest of the world, which looks with some amazement at how we are forever shortening our working week and introducing employment legislation which makes our companies less competitive.
There has to be recognition that both business and the workforce have their rights, but that legislative procedures which reduce competitiveness will drive even more companies to operate in other parts of the world.
