Wednesday, May 13, 2009

You may have read the Bill John, but you clearly don't understand it

I have to say I'm loving John Prescott's latest little campaign about the Equal Opportunities Bill. It's classic Prescott really because it's complete and total tissue of disingenuous bullshit.

According to Prescott the Bill will "effectively scrap the minimum wage." Meanwhile, Alex Ross on LabourList says it allows "employers to opt-out of the Minimum Wage.... effectively abolishing it".

Errr, I've read the Bill and it is about providing an opt-out for employees not employers. It's pretty clear from the Bill, which is tiny, that it gives individuals the right to work for less than the minimum wage if they want to, and gives that person the right to withdraw from the opt-out by writing to their employer with three-months notice.

The Employer, as far as the Bill goes, is still required to pay the minimum wage in those circumstances, so it doesn't abolish the minimum wage, nor does it give an opt-out for employers from it. What it actually means is that someone is legally entitled to the minimum wage but can, if they want, work for less, whilst the employer remains obliged to pay them the minimum wage if they change their mind.

There is even protection for those who are unemployed and seeking a job whereby there is no detriment to national insurance entitlements, nor are they required to take a job for less than minimum wage in order to keep said entitlements . Here is the very short Bill.
National minimum wage opt out

(1) Any person who would otherwise qualify for entitlement to the national minimum wage, as defined in the National Minimum Wage Act 1998 (c. 39), may elect to opt out from such entitlement.

(2) Any election to opt out under subsection (5) must be made by an employee in writing to that person’s employer and signed by the employee and employer.

(3) Any person who has elected to opt out of entitlement to the national minimum wage in accordance with subsection (6) may withdraw such election by giving notice to his employer in writing.

(4) Any notice of withdrawal under subsection (7) shall take effect no earlier than three months from the date that it is given unless such period of minimum notice is waived by the employer.

(5) For the avoidance of doubt, nothing in this Act shall require a person to take employment below the minimum wage and no person shall suffer any detriment to their entitlement to national insurance benefits by reason of their unwillingness to take employment below the minimum wage.
What's important here is to remember the circumstances that this Bill has appeared in. We're in the deepest recession for more than a generation. Small businesses are struggling with the potential of foreclosure. The first place any small business looks is headcount, but in many cases this is a Catch 22. Lose heads and you cannot service the business you have.

The ability for employees to freely decide to take less than minimum wage has the potential to keep small businesses afloat, and even then, with this Bill, the employees can choose not to opt-out and the employer cannot force them too - admittedly they might then go under and the staff lose they're jobs end up on the dole.

Of course, such rational and calm analysis doesn't chime quite so well with the likes of Prescott, as hysterically standing up and sceaming that the Bill will give employers the right to pay people 50p per hour, or that it abolishes the minimum wage. To be fair such hysteria is at best evidence of reading comprehension issues, or worst disingenuous bullshitting.

The opt-out in this Bill is no different to the opt-out we all individually have on the matter of the Working Time Directive. The question you have to ask yourself is, do you want to live in a country that allows you to choose when, where and for how much you work, with the added protection of knowing you can legally force your employer to pay you the minimum wage? Or not?

Perhaps, if Prescott was a serious politician rather than a hysterical rhetorician, he might propose something more constructive that "Stop the Tory Bill". Perhaps a sunset clause that automagically repealed it when the current recession is over?

Don't misintepret me here, I'd be happy for this to become law permanently because it simple doesn't cause the abolishen of minimum wage at all or confer rights on employers as Prescott is arguing. However, if Prescott wants to see himself as serious, he ougt to think about why, especially right now, such a facility of choice to individual employees might in fact be quite useful.

The Tories opposed the minimum wage on the grounds that it would destory business. During the boom it has not. They were forced to "suck it and see" and they sucked and saw. It didn't do what they thought it would. Likewise now, Prescott should think about the bust we're in and suck this and see and perhaps drop the ideological class warefare purity bollocks.

A Bill like this, at a time like this, could well save jobs because it could actually save many businesses. who would otherwsie have to lay off staff completely and close. Would we rather have people on the dole, or people choosing to work for less in the jobs they already have, safe in the knowledge that they can turn around and demand minimum wage from an employer who can do nothing about it? It would not even have to be permanent if a calmer response to it was taken.

Note: No doubt this post will be commented about as proof of the "nasty party" being alive and well. The fact that the campaign claiming it abolishes minimum wage is wrong will be ignored. C'est la vie

Note II:
Before anyone suggests I have no idea what its like to be on low pay, I worked in a supermarket for eight years and lived in a crap flat on a run-down estate, eating value food products, before I got into IT.

Update: It has been noted in the comments, essentially, that I am maive, and this would be exploited by employers. The problem is, as with the Working Time Directive, if after opting-out you opt back in, the employer cannot legally fire you under this Bill.

They have to pay you minimum wage if that happens. The employer has no choice, the employee does. If the employer then creates some excuse to lay you off within three months, makes life Hell, or "manages you out", you have grounds for wrongful or constructive dismissal. It's not rocket science.


WobblyJim said...

It also provides an opportunity for employers to only select candidates at the interview stage, who would be willing to work for less than the minimum wage.
In effect it would gut the protection of a minimum wage. Same old ZanuLabour BS saying exactly the opposite of what constitutes reality.

Barnacle Bill said...

Two loo seats pie stuffer is worried he and his like might end up having to work for less than the Minimum Wage after the next general election.
It probably be the only sort of employer to take on an ex-nuLabor MP!

Chris Doidge said...

Your argument works on paper, but in the real world employment doesn't work like that, Dizzy.

My last job involved working over 50 hours a week. Of course I could have exercised my right to work a maximum of 48 hours a week under the Working Time Directive, but had I exercised that right on accepting the job, I simply wouldn't have been given the job.

Yes, this new bill gives employees the right to 'opt out' of the minimum wage. But when hiring new people at least, it means potential employees choosing between accepting a job and not accepting a job.

I don't see anything in this bill which prevents employers from advertising jobs at below the minimum wage. It's then up to employees to decide whether they should apply for it. Of course, they could apply and demand the minimum wage, but who's going to do that?

I'm afraid you've misunderstood the practical impact of this bill if you think it's anything other than the effective abolition of the minimum wage.

dizzy said...

But it's not the "effective abolition" at all, because at all times you can just turn around and say, "I'm not doing this for this much anymore", and, just the WTD, you do so withthe full protection of the law on your side.

And, as I said, a constructive thing to do would be to propose amendments to the Bill rather than screaming about how its abolishing something. It is not.

dizzy said...

"Of course, they could apply and demand the minimum wage, but who's going to do that?"
Somebody who knows that they are opting-out of the minimum wage but has the right to opt back in at any time they wish?

Tim Coates said...

Dizzy - I'd love to agree with you, and in theory I do, and in a perfect world maybe.

But the practicality is that you would have to accept the option of opting-out, probably at interview stage, and then if you did opt-in again, you may find yourself employed only for the next 3 months or so before a decent excuse to remove you was concocted. Much in the same way as the WTD now. It is part of my contract and if I decided to opt-in I'm sure it would cause my future employment (and chances of pay increases/promotions etc) damage.

Of course, in a perfect world a NMW would not be necessary at all and wages would be universally high - but for that we need a fundamental reappraisal of the economic system along Georgist reform... that's a debate for another day.

dizzy said...

if you did opt-in again, you may find yourself employed only for the next 3 months or so before a decent excuse to remove you was concocted.

I wish point you go to tribunal for wrongful or constructive dismissal.

Mark M said...

dizzy - do you get the feeling that this bill is too clever by half, hence the amount of people who do not understand its implications?

Working Time Directive - if your employer asks you to work for more than 48 hours and you choose not to, your employer cannot legally fire you.

Minimum Wage Opt-Out - if your employer wants you to work for less than minimum wage and you choose not to, your employer cannot legally fire you.

The only issue I see with it is what happens if the employer is forced to either reduce head count or lower wages. If you offer lower wages and none of your employees accepts, it seems you cannot then fire them as they have the protection of the Opt-Out ("he's firing me because I won't work for less than minimum wage").

dizzy said...

Possibly Mark M. To be fair, a mate of mine recently was offered a pay cut or a shoter working week whilst the recession was ongoing. I think in a lot of cases if an employer asked their staff to take a pay cut they would probably do so temprarily.

The real problem with the opposition is that there is an assumption that all businesses are interested in exploiting and being horrible to their staff, It is a kind of Victorian worldview of British business which is not something I agree with.

plum said...

You, Dizzy, obviously have't got a clue.

There is a world of difference between being taken on by a big business supermarket and a small time employer who will make it very clear that the optional pay cut is "up to you".

Get real.

dizzy said...

If you're going to tell me to "get real" at least make your post accurate. What will happen is that a small time employer who will make it very clear that the optional pay cut is "up to you" will have no legal right to fire you when you opt-out or refuse.

Get real.

Disco Biscuit said...

Dizzy, I think you're naive if you don't think this would be exploited by many employers.

A person would be told to sign away their right to minimum wage, with it being made clear that they would not continue in that job if they didn't do so.

If they were ever to withdraw their agreement to work for less than the minimum wage, a reason would be found to sack them.

You're usually right but on this one I think you're very, very wrong.

Of course, whether a minimum wage is a good thing or not is very much open to debate.

Lexander said...

I've had my various women on the minimum and maximum for years and had no complaints! Seriously, Prescott would not understand anything unless it was fat, greasy and unedible to most of us. I rely on you Dizzy to keep on eye on the fat wanker. Thanks.

Lola said...

As a small employer I can categorically state that the minimum wage and employment law has stopped me taking on temporary low paid and young workers. I could create a real job, now, for one of these for whom the experience could go down on his or her CV to help him or her get another job when what I want done finishes. Doing what I want done may even create more work. But I just will not take the risk at the present time. My own house is at risk, so why should I?

The minimum wage and over regulated employment laws kill jobs and opportunity. Fact.

Josh said...

Dizzy> I think you're being naive here, specifically in thinking you have any protection from dismissal in the first (IIRC) year in a job. Generally, your employer can fire you for any reason - or rather, no reason - at any time up until then and you have no recourse to complaint.

Of course, what'll actually happen depends on where they place the burden of proof. With current maternity law, you can't fire a pregnant woman for any reason, or you stand a serious risk of being accused of doing so because she's pregnant. It may be that requesting full pay will make you unsackable.

I tend to think, though, that it'll end up being exploited in the worst possible way by cowboy call-centre operators, and the like.

Anonymous said...

BTW.. Dizzy..
THe gov just cut the minimum wage.

CPI is at 2.7%.

RPI about 1%.

Minimum wage went up by RPI.

Every one on the minimum wage juts got a pay cut.

The tories have to be smarter than this.

Obsidian said...

I've no doubt some employers would use this to strongarm employees into low wages - however this would likely be in industries where the minimum wage is higher than the job is actually worth, or in businesses that have a high 'churn' like telesales.

Anyway, the majority of people who'll make use of this, should the bill pass, will not be at the lower end of the market, but in the contracting and higher wages, as it'll be used to reduce tax burdens.

Robert said...

Simplistic or what, people would want to work for less then the min wage, why would that be then, OK I'm rich and I do not really want to work for money. come on for god sake.

DM Andy said...

Dizzy, the wrongful dismissal would only apply if the employer is stupid about it and if the employee knows what his or her rights are. It also wouldn't apply in zero hours contact situations.

I've got a friend who works for minimum wage, she's on a zero-hours contract, if her mannager "asked" her to opt out of the NMW then she would know that if she didn't then she would get less hours, maybe even no hours at all. That doesn't seem fair to me.