Labour Market update

Department for Business, Energy and Industrial Strategy written statement – made on 9th October 2018.

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Photo of Greg Clark Greg Clark The Secretary of State for Business, Energy and Industrial Strategy

I am writing to inform the House that over Conference Recess I announced the Government’s intention to: legislate to ban employers from retaining tips earned by their staff; consider creating a duty for employers to advertise all jobs as flexible unless there is a good business reason not to; and to consult on whether large employers (those with 250 or more employees) should be required to publish their parental leave and pay policies.

Tipping

The Government will introduce legislation to ban employers from making deductions from tips, ensuring tips go to the workers providing the service. While most employers act in good faith, in some sectors evidence points towards poor tipping practices, including excessive deductions being made from tips left in good faith by customers.

This legislation will give consumers reassurance that the tips they leave are going to the staff, as they intended. It follows a consultation which found a majority of respondents in favour of preventing any employer deductions from discretionary payments, except those required under tax law.

The Government will announce further details in due course, including measures to ensure employers are able to continue to distribute tips via independent and staff-run ‘tronc’ systems.

Flexible working

The ability to work flexibly enables people – both men and women – to balance their work and home lives more effectively. Moreover, flexible working gives employers access to a wider talent pool and enables better matching of applicants and jobs. Employee engagement, performance and productivity are also improved.

However, flexible working is still relatively uncommon, which sometimes holds people back from requesting it. The Government would like it to be clearer from the outset whether flexible working is an option. Research indicates only 9.8% of quality job vacancies are advertised as open some kind of flexible working, yet many more are likely to be.

The Government want employers to consider whether a job can be done flexibly, and to make that clear when advertising. There are many good reasons why a job might not be suitable for flexible working, but where it is, signalling this at the outset will encourage interest from a wider range of candidates and enable both sides to take full advantage of the flexibility.

Transparency on parental leave and pay

Statutory entitlements to parental leave and pay enable mothers who want to return to work earlier to do so and enable more fathers and partners to be their child’s main carer where this is best for the family. Statutory entitlements are also important in closing the gender pay gap, by providing parents with more opportunities to remain in work and to progress their careers.

Many employers offer enhancements to the statutory entitlements, but surprisingly few publicise these policies. This means that job applicants have to ask specifically about these policies – which some may be reluctant to do.

Mandatory gender pay gap reporting, introduced in April 2017, already provides a clear incentive to large employers to review their policies and recruitment procedures and to publicise those that enable them to recruit and retain female talent. The Government wants to accelerate that improvement by encouraging large employers to publish their parental leave and pay policies, and will consult on a proposal to require large employers to publish their parental leave and pay policies.

This statement has also been made in the House of Lords: HLWS945