In October, age discrimination in the workplace will be outlawed and the minimum wage will rise to £5.35 per hour. In April next year, parents will benefit from new employment rights and carers of adults will be given the right to request flexible working.

The DTI’s commitment to ‘maximising potential in the workplace’ is key to the development of the new rights. This commitment forms part of the department’s long-term strategy, which was set to help create the conditions for business success, and to help the UK respond to the challenges of globalisation, by improving productivity.

Since 1997, the government has introduced a foundation of minimum standards in the workplace. People at work in Britain have benefited from paid holidays, rest breaks, a cap on the working week, and measures to support working parents. Trade unions now have the right to recognition by the employer where a majority of the workforce want it; and part-time workers have the same rights as their full-time colleagues.

The government has introduced workplace protection against discrimination on grounds of sexual orientation, religion or belief, and employees in larger organisations have the right to be informed and consulted about developments in the workplace.

The DTI has applied better regulation principles to the development of employment law, by using first-class and innovative methods of consultation, making effective use of alternatives to regulation, pioneering common commencement dates to provide greater clarity and stability for business, and, when changes are made to the law, balancing rights and responsibilities.

The UK is facing a competitive challenge from Asia, where growth rates are unprecedented and wage costs are a fraction of our own. Whilst we cannot, and would not want to, compete with the East on wage terms, we can ensure our workplaces are innovative, and high-performing.

There is a real need to ensure businesses get the best out of their employees, coupled with the need to ensure people are paid fairly, in an environment free from discrimination. Everyone should have a fair chance of getting work and be allowed to continue to make a contribution that is valued, if they decide to start a family, or have commitments to care for a loved one.

The old stereotype of the father going out to work to earn the family income, while the mother stays at home to look after the children, has long gone. Now, in most families, both parents work. There has been a positive culture change in the home and workplace. Mothers are taking more time off when their child is born; the majority of fathers are taking up their new entitlement to paternity leave; and the number of new dads working flexibly has tripled.
T
he Work and Families Act will enable mothers, fathers and carers to continue making their contribution at work. Maternity and adoption pay will be extended from six to nine months from next April, with the goal of a year’s paid leave by the end of this Parliament. The Act proposes that by the end of this Parliament, fathers will be able to take up to six months’ additional paternity leave in the second half of the baby’s first year, if the mother is not taking her second six months and has returned to work.

The role of carers is becoming more important, with an ageing population and a growing elder care responsibility. Of 6.5 million people with caring responsibilities in this country, around 3.5 million have jobs. The act will extend the right to request flexible working from April, so that it covers carers of adults, as well as parents of young and disabled children.

We’re making it easier to manage leave and pay, as well as extending entitlements for employees. New measures will also be in place from April to help employers manage the administration of leave and pay, and to plan ahead with greater certainty . When the legislation was being developed, we considered how we could help business manage the changes in line with the government’s better regulation agenda. External advisory groups were set up, formed of people with human resources expertise, who examined how to ease compliance for employers. So, the Work and Families Act is pro-business and pro-families – aims which are not mutually exclusive, but mutually supportive.

In its latest projections, the Office for National Statistics indicates that nearly a third of the labour force will be over 50 by 2020. Businesses increasingly need to recognise the benefits of age diversity in the workplace. Treating staff fairly and recognising individual talents and needs is not just the right thing to do, but makes good business sense as well. Employers who recruit from the widest possible pool of applicants are able to choose the very best candidates, which has a positive impact on productivity.

New age-discrimination laws will give individuals important new rights, extend existing rights, and remove traditional barriers. The laws will help ensure that people are no longer denied jobs or harassed because of their age, and in most cases, workers of all ages will have an equal chance of training and promotion.

The current upper age limit for unfair dismissal and redundancy rights is being removed. This means that older workers will get the same rights to claim unfair dismissal – or to receive a redundancy payment – as younger workers, although retirement will be a fair reason for dismissal if the correct procedures are followed.

New retirement procedures will give employees a statutory right to request working beyond compulsory retirement, and employers will have a ‘duty to consider’ such requests. Employers must also give workers at least six months’ notice of their retirement date. The European directive recognises that differences of treatment on the grounds of age can sometimes be justified. For example, it may be necessary to make special provisions for younger or older workers in order to protect their safety and welfare. The regulations include a number of exemptions, where proportionate, in order to promote legitimate policy aims.

As allowed by the directive, the legislation gives employers the opportunity to take an age-based approach, where it is appropriate and necessary. But employers will not be able to make arbitrary decisions unsupported by evidence.

Fairness and productivity go hand in hand. Tackling discrimination helps to attract, motivate and retain staff. It helps employers make the best use of skills and experience. It can lead to a more diverse workforce, new ideas, and access to wider markets. When the new laws are in force, annual benefits to employers are estimated to be between £83.4m and £706m per year.
The national minimum wage was introduced in 1999 to establish fairness in the workplace. In 1997, very low rates of pay affected hundreds of thousands of workers, many of whom were being paid around £2 per hour. This October, the minimum wage rises to over £5.35 for workers aged 22 and over.

Research has shown that whilst the great majority of employers recognise their responsibility to pay the minimum wage, there are some who do not. This is more evident in some sectors than others, including hospitality, retail, care homes, security, cleaning and hairdressing. Last year, the DTI began to target these sectors in turn, on a year-by-year basis. In 2005 we targeted hairdressers; this year we will focus on the childcare sector.

This approach is enabling us to raise the profile of the minimum wage in each sector, whilst addressing concerns and improving compliance at the same time. The minimum wage has already made a real difference to the lives of hundreds of thousands of low-paid workers. Year-on-year increases protect some of society’s most vulnerable people from exploitative rates of pay. Despite predictions to the contrary, the national minimum wage has not affected the job prospects of low-paid workers in the UK.

I believe a key reason for the success of our policies so far is that we’ve worked closely with business, including small business, taking on board their views. The government’s programme of employment legislation is designed to improve standards and fairness in the labour market. For the first time, a comprehensive set of minimum employment standards has been introduced, and millions of working people have gained from a direct improvement to their terms and conditions. Employers are benefiting too, from improved labour market flexibility, and protection from less scrupulous competitors.