Do we need a Scottish Fair Wages Resolution?

Mick Rice makes the case for the Scottish Parliament to improve the treatment of its own staff.

The Scottish Parliament can show a degree of ‘independence’ from the diktats of the Tory Westminster government by adopting its own Fair Wages Resolution (FWR). A suggested wording is:

This Scottish Parliament agrees that from (insert date) all directly employed staff and all staff employed by bodies that receive funding as a consequence of a budget approval by this parliament, shall, as a condition of receipt of such funding, have contained within their contract of employment the following:

‘Your terms and conditions of employment shall be no less favourable than those who are employed in comparable jobs within the European Community. Further, all contractors providing goods and services to this parliament and to any other bodies in receipt of funding as a consequence of a budget approval by this parliament, shall, as a condition of the contract to supply such goods and services, include a commitment that its staff shall enjoy conditions of employment no less favourable than comparable workers employed within the European Community.’

It is important to understand that FWRs are decisions of public bodies to impose a requirement upon themselves (and any subsidiary bodies). When parliaments legislate they impose conditions upon others, whereas resolutions impose conditions upon that public body. The first FWR was adopted by the House of Commons in the 1890s and came about after a campaign by unions against ’sweated trades’ where unscrupulous employers were driving down pay and conditions in order to win public contracts. Doesn’t this sound familiar? The Tory Brexiteers want to celebrate cutting red tape (aka your rights?) in order to become more competitive (aka make higher profits). The FWR used ‘normal wages and conditions’ pertaining in Britain as the comparator. There is no legal reason not to use an international comparator.

Thatcher abolished the FWR in 1982. She had to give 12 months’ notice to the International Labour Office (ILO) as the commitment to Fair Wages had become an ILO commitment. Her motivation was to privatise public services and drive down wages and conditions below the comparable public-sector rate. At the time, I was working for the public sector union, NALGO. I set about, with some success, in getting local NHS District Health Authorities to amend their Standing Financial Instructions to adopt their own FWR. Any public body, or for that matter any organisation whatsoever, can adopt a FWR.

A Scottish FWR, in the terms I have set out above, would ensure that contracts of employment were changed to those specified. The contract of employment would be enforceable by application to an Industrial Tribunal. Clearly, such cases are likely to be the preserve of unions submitting claims through appointed solicitors and on behalf of groups of workers.

Whilst, technically the resolution could be used to enhance wage rates, applicants would have to prove that the comparable group of workers within the EU had wages that were normally greater. This would be hard to prove and it is unlikely that the resolution could be used for this purpose – although if the EU adopted a minimum wage that was higher than the UK minimum wage this would be enforceable.

However, what is indubitable is that EU directives on worker protection do have general significance across the EU as a whole. If these rights are greater than those pertaining in the applicable public bodies, or contractors supplying goods and services to those bodies, then EU rights and protections apply. In effect EU worker rights will have been enshrined in the individual contract of employment of the worker. Moreover, the opt out of the Westminster government to the Working Time Directive, would be bypassed as this would now apply via the Scottish FWR.

There were 561,300 public sector workers in Scotland (21% of the total workforce) in January 2017. The Scottish public sector is responsible for £11bn of orders for goods and services each year. Obviously, £11bn must equate to a large number of jobs. But, in addition, the private contractor would be signing up to a commitment that its staffs are covered by the Scottish FWR – substantially more than those just employed on the delivery of the contract itself. Moreover, where firms have staff based in other countries, they would also be covered.

Brexit will not affect the application of a Scottish FWR – unless the UK parliament specifically includes legislation limiting the power of Holyrood. But this would result in a full-blown constitutional crisis and expose the Tory Brexiteers as free market ideologues determined to rip up worker protection!

A Scottish FWR is likely to be supported by many small firms and SMEs – who are fed up with multinationals underpaying taxes – they want a level playing field and not a race to the bottom generated by international spiv companies.

It is likely that the SNP would support a Scottish FWR for the following reasons: no immediate cost consequences; the rights that it gives workers can only be enforced through application to an Employment Tribunal; provides a level ‘playing field’ with other EU countries; proves the Scottish Government’s EU credentials; and is one in the eye for the Tories.

If the Scottish Parliament adopted a FWR, then it is likely that the Welsh Assembly would also do so. This would place pressure on the Westminster Parliament. It would expose the Tory Brexiteers who want to drive down pay and conditions. If Labour or the SNP do not propose it, perhaps the Greens would do so. A simple majority in the Scottish parliament is all it takes!

Mick Rice is the Secretary of the Glasgow UNITE Retired Member’s branch.