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Written Statement - A Fair-Work Future for Wales

Julie James, Minister for Skills and  Science

I welcome the opportunity to update members on actions being taken to deliver fair work and respond to concerns about casualisation of the workforce that were raised in Business Questions during the last Assembly term. Particular issues were raised in the context of the published conclusions of the UK Taylor Review of Modern Workplace Practices (the Taylor Review).

Our Programme for Government, ‘Taking Wales Forward’, sets out our ambition for the future of work in Wales including the development of skills and careers for life enhancing work, without exploitation or poverty.

We are committed to social partnership with employers and trade unions in promoting fair work practices, recognising the benefits of an open dialogue with social partners across the public and private sector. Drawing on established social partnership structures, the First Minister has convened a Fair Work Board which, as its first task, will explore how the Welsh Government can further leverage fair work outcomes from public spending and procurement practice in Wales.

In July I delivered an oral statement setting out my agenda for employability. This recognises that, in addition to providing support for the economically inactive, we must also do more to support those who would like to work longer hours and those in insecure employment. We are working with our partners to address the many barriers that are preventing people from entering and progressing in good quality, fair employment.

Following Royal Assent last week, the Trade Union (Wales) Act is protecting our established social partnership arrangements on public service workforce issues from harmful aspects of the UK government’s Trade Union Act. At the same time the Welsh Government published ‘Brexit and Fair Movement of People’, our high level policy position on migration following the UK’s exit from the EU. This includes proposals to strengthen the enforcement of legislation to prevent the exploitation of low paid workers. UK employment law has a great deal of EU law at its source – this includes laws which protect the rights of workers to a safe working environment, parental leave and equal treatment, amongst others. These are valuable employment and social protections which we do not want to see undermined by the UK’s exit from the EU.

We recognise that some people are concerned about the exploitation of migrant workers and the extent to which this potentially erodes wages and conditions for workers more widely. Exploitation is not caused by immigration, but by unscrupulous employers. While some migrant workers are particularly vulnerable to exploitation in the workplace, this type of exploitation is by no means confined to them. Tackling this exploitation through vigorous enforcement of the law will ensure that all workers benefit from the wages and working conditions to which they are entitled.

Most of the levers to address this issue lie with the UK government and they must take responsibility for ensuring that workers are more aware of their rights, and put sufficient resources into enforcing the laws that protect those rights. However, the Welsh Government is already doing a great deal to drive stronger compliance and good practice among employers in Wales, and will seek to do more.

In March we launched our Code of Practice for Ethical Employment in Supply Chains in Wales, designed to improve the wellbeing of workers involved in public sector supply chains in Wales and across the world. It focuses on guaranteeing good employment practices and includes a commitment to consider paying all staff the Living Wage, as set by the Living Wage Foundation. On Modern Slavery, the Code goes further than existing UK legislation, by including all sectors and not imposing a minimum turnover threshold. All businesses, public and third sector organisations in Wales in receipt of Welsh public sector funding will be expected to sign up to the Code, and many are already in the process of doing so.

Fair work makes good business sense and the majority of employers in Wales value the workforce, respect the local community and acknowledge the importance of fair pay. Action is being taken to promote the benefits of responsible business practices, including training and skills development, to private sector employers. For example, work is ongoing to explore embedding employment practices within the Sustainable Development Charter. This would encourage businesses to offer better working practices and encourage in-work progression as part of the focus on the Well-being of Future Generations Act.

In terms of promoting the Living Wage and addressing concerns about ensuring the fair use of zero hours contracts more broadly:

  • the Welsh Government has issued principles and guidance on the fair use of zero hours contracts arrangements in devolved public services following consideration of the issue by the Public Services Staff Commission
  • the Welsh Government is currently analysing the responses to our consultation on proposals around the use of zero-hours contracts and protecting care time in the social care sector and we will publish a report on this analysis
  • the Welsh Government is a Living Wage employer; the Living Wage has been included in the current NHS Pay Award (having been introduced in 2015), and strong progress is being made across other public sector employers and the private sector.

Across public services the Welsh Government continues to deliver extensive support for the workforce to deliver strong and effective public services. The Two-Tier Workforce Code withdrawn by the UK government, but re-issued in Wales, is based on the fair treatment of transferring staff and the treatment of staff working alongside transferred staff in contracted out services.

Whilst recognising that, in particular circumstances, there can be advantages for employers and workers of more flexible working practices, it is clear that low pay and casualisation of the workforce presents challenges for individuals and policies aiming to support prosperity through work.

Recent statistics demonstrate that proportionately fewer people are employed on zero-hours contracts in Wales than the UK average. In the three months to December 2016, there were 37,000 people employed on a zero hours contract in Wales; fewer than the previous year.

I welcome the goal of good work for all that was set out in the Taylor Review and urge the UK government to respond with proposals that support our agenda using the levers at their disposal to promote fair work and protect workers at risk of exploitation. However, the recommendations appear to stop short of the strengthened enforcement of legislation needed to prevent exploitation of low paid workers. The recent decision of the Supreme Court that Tribunal Fees introduced by the UK government in 2013 are unlawful is a positive step to improve access to justice for those that have been subject to unlawful employment practices.

The Fair Work Board will identify the steps needed to take place for Wales to become a fair work nation. The Welsh Government will work with trade unions and core-funded advisory services to support them in identifying exploitative practices, providing advice to workers who need it, and driving greater compliance in the workplace.

This statement is being issued during recess in order to keep members informed. Should members wish me to make a further statement or to answer questions on this when the Assembly returns I would be happy to do so.