A new approach to work

Paper outlines plans for fairer labour market

A new single rate for the national minimum wage to reflect the increased cost of living, and more effective employment law to protect workers’ rights underpin plans to build a fairer labour market in an independent Scotland, according to Deputy First Minister John Swinney.

Following publication of the paper Building a New Scotland: A stronger economy with independence, Mr Swinney said the powers of independence would allow the Scottish Government to build a fairer, more equal future for all workers. This includes new measures to improve access to flexible working and better industrial relations.

Deputy First Minister John Swinney said: “Improving job security, wages and work-life balance are essential to delivering a more socially just Scotland. The UK labour market model has generated high income inequality while failing to drive productivity growth.

“Compared to independent European countries similar to Scotland, the UK has a higher prevalence of low pay, a bigger gender pay gap, longer working hours and significantly lower statutory sick pay.

“The Scottish Government is committed to Fair Work, but we could go much further to strengthen that agenda in an independent Scotland, developing a legal framework that more effectively addresses the workplace challenges of the 21^st century. It would give us an opportunity to redesign the system to better meet the needs of Scotland’s workers and employers.”

Specific measures proposed in the paper include:

• establishing a Scottish Fair Pay Commission to lead a new approach to setting a national minimum wage, working with employers, trade unions and government
• improving pay and conditions with a single rate minimum wage for all age groups and better access to flexible work to help parents and carers
• repealing the UK Trade Union Act 2016 as part of developing an approach to industrial relations which suits both workers and employers
• introducing a law to help workers organise co-operative buyouts or rescues when a business is up for sale or under threat
• legislating to support workers in precarious employment, and banning the practice of staff being made redundant and re-hired on reduced wages and conditions
• increasing transparency in pay reporting and data to address gender, ethnicity and disability pay gaps and building on Scottish Government work to break down barriers to employment

The paper outlines how it would be easier for an independent Scotland to deal with labour market shocks.

In responding to the global financial crisis and pandemic, other countries were able to quickly draw on existing institutions and initiatives. This could include a permanent short-time working scheme, modelled on the German Kurzarbeit programme which provides compensation for private sector workers whose hours are reduced because of economic difficulty. A scheme like this in Scotland could help retain skills, reduce long-term unemployment and the associated costs and allow for more rapid economic recovery.

Job Security Councils, modelled on a Swedish initiative, could provide support to workers who have lost – or are at risk of losing – their jobs. These non-profit foundations led by social partners, employer representative bodies and trades unions, would help workers find new employment by providing a range of advice and high-quality retraining.

Building a New Scotland: A stronger economy with independence is the third paper in the Building a New Scotland series which will form a prospectus to enable people to make an informed choice about Scotland’s future before any referendum on independence takes place.