Regulation not the answer for labour market, says CIPD

Changing employment regulation will have little effect on the UK labour market, according to a report by the Chartered Institute of Personnel and Development (CIPD) and The Work Foundation.

The UK labour market performs well in comparison to other economically developed OECD countries according to the research, and neither deregulation nor more regulation is likely to improve it.

The report finds that the UK has a higher quality of employment compared to other developed economies:

  • 79% of UK employees are in permanent employment, compared to 77% in Germany and 65% in Italy
  • 65% of UK jobs are rated as high-quality, compared to 50% in France and 49% in Germany
  • 84% of UK workers say they are happy with their working hours, compared to 80% in the EU
  • 77% say they are satisfied with their work-life balance, compared to 74% in the EU.

Ben Willmott, head of public policy at the CIPD, urged political parties to avoid promising regulatory changes during the upcoming election campaign period:

"We don't need yet another employment bill or another zig-zag between more and less regulation. Instead, what we need is a fundamental review of the UK's skills policy to understand how we can generate more high-skilled jobs and better progression routes for those in low-skilled and low-paid jobs."

However, the UK labour market continues to perform poorly in a number of key areas:

  • the UK productivity index reached 100.4 in Q3 2014, compared to 111.3 in France and 115.4 in Italy
  • 21% of the UK workforce are in low wage jobs, compared with 18% in Germany and 19% in Italy
  • the UK is in the bottom quarter of EU countries in terms of its youth unemployment rate.

Wilmott continued:

"It's clear that the UK struggles on productivity, low-pay and unemployment among young people, but the wider picture is much more positive.

"Rather than meddling with regulation, a renewed focus on enforcing and improving awareness of existing rights among employers and workers is needed to help curb any abuses of employment rights where they do occur, as well as a much more explicit policy focus on the workplace to improve practice and productivity."

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