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Do boards needs directors in charge of bringing the workers’ perspective?

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The rights of workers are rarely far from the headlines. You only have to look at the backlash that came from P&O’s decision to make 800 people redundant without consultation to know the reaction when due process is by-passed by senior personnel.

Admittedly, P&O is an extreme example and one that will probably be cited for many years on how not to manage a redundancy situation.

But the transport secretary’s response – a new eight-point plan, which includes tightening employment laws for ship operators in UK waters – shows a genuine desire by the government to protect the rights of workers and ensure they continue to have a voice.


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That theme is also the subject of an employment bill that received its second reading in the House of Commons last week (6 May).

The private members’ bill, brought by MP Martin Docherty-Hughes, was presented to Parliament in June last year and is different to the proposed employment bill on flexible working and enhancing workers' rights which was missing from the Queen's speech yesterday (10 May). 

Central to the private members’ bill is a new, simplified definition of what is meant by the term worker.

The bill also proposes a new concept of ‘worker representative director’, as well as including provisions about the rights of workers to negotiate pay and join trade unions and employee associations and the employment rights of members of the armed forces.

 

Definition of worker

Topping the bill is a proposed amendment to the definition of a worker. Anyone within HR circles will be well aware of the longstanding debate around the term.

This bill aims to provide further clarity in the Employment Rights Act 1996, resulting in a “single employment status for workers and employees for the purpose of employment rights and employer responsibilities in the workplace.”

Under the proposals in the bill, a worker would be defined as a person who:

  • Seeks to be engaged by another person to provide labour
  • Is engaged by another person to provide labour, or
  • Where the employment has ceased, was engaged by another person to provide labour and is not genuinely operating a business on his or her own account.

The bill also goes on to say that an employer is someone who “engages another person to provide labour, whether directly or through another person, and the person providing the labour is not genuinely operating a business on his or her own account.”

Importantly, in any legal proceedings, it would be down to the respondent to show that the applicant is not an employee, a worker, employed, or in employment, or that the respondent is not an employer.

 

Worker representative directors

An interesting, proposed addition to the Companies Act 2006 is for all qualifying companies to have at least one director on the board who is a ‘worker representative director’.

This would replace the current requirement for businesses to have “at least one director who is a natural person”.

The worker representative director would, in addition to their other responsibilities as a company director, be responsible for bringing a workers’ perspective to the boardroom, rather than directly representing the interests of the company’s workers.

Qualifying companies – businesses with 250 or more workers, or with 100 or more workers who have triggered the right to have worker representative directors through a procedure to be prescribed by new regulations, or which make a pre-tax profit of £2.5 million or more in the last year – would have to ensure that at least a third of their board membership was made up of worker representative directors.

Given this is a private member’s bill, the chances of its provisions making it onto the statute books are relatively low; however, it perhaps provides some indication of the possible shape of employment law to come and one to watch.  

 

Fiona Hamor is an employment lawyer at Pannone Corporate