Fairness Starts at Work

11/10/2011 14:23 BST | Updated 08/12/2011 10:12 GMT

In the current financial climate, boosting job numbers and workers pay are clearly two challenging areas for the Coalition. During conference season, ideas were brought to the table on how to achieve the former - such as new policies on employment rights.

One of which makes it easier for employers to fire staff (the period when workers cannot claim unfair dismissal is being increased from 1 year to 2 years) - and the other makes it harder for fired staff to sue employers (forcing workers to pay a fee of around £1,000 just for a claim to be heard). In combination, they make a fearsome twosome.

The Government thinks that this increased flexibility will lead to firms being keen to take on more staff. However, it is easy to see it from the opposite perspective - that it will lead to higher redundancy rates. Policies like these bring into perspective the support which trade unions provide their members in the workplace.

The Coalition's commitment to increasing the number of apprenticeships is a positive one - however, they should consider Ed Miliband's suggestion only to give government contracts to firms offering apprenticeships. It is important that a real marker is put down on this - Government spending is about 45% of the UK's entire GDP - so you can see the difference this could make for boosting their numbers.

Another area to keep an eye on is the Minimum Wage. Whilst it was recently increased by around 2% (still less than inflation though), the Low Pay Commission has associated the Minimum Wage with youth unemployment. Whether right or wrong, this is of course a dangerous link to make, as it ignores the fact that the Minimum Wage is for many barely enough to live on. This is rightly why in recent years the debate had shifted to discussing a 'Living Wage', rather than simply a minimum.

The pay gap between the lowest and highest paid is also substantial. The Spirit Level (by Richard Wilkinson and Kate Pickett) showed how the UK is one of the most unequal countries in the world - with the richest 20% earning around 7 times as much as the poorest 20%.

This matters because Wilkinson and Pickett found that high inequality is directly correlated to a wide range of societal problems - such as increased violence, worse health outcomes, less social mobility and poorer educational attainment. And this applied regardless of the wealth of the society in question.

To challenge this, consideration should be given to the idea of having an earnings structure in companies which ensures the lowest paid earn as a minimum a certain percentage of the highest - perhaps 10% (Will Hutton proposed 5%). So theoretically, if the highest earner took home £200,000 per year, the lowest paid would have to receive a minimum of £20,000.

Another way to increase jobs and take home pay is through expanding employee ownership in the private sector, by increasing the numbers of co-operatives and mutuals. This could be achieved by offering them large tax breaks, whilst also providing a free advisory service to help people set them up. Co-operative business models have been shown to enhance productivity in companies, allowing them to grow - creating new jobs. They also have the added benefit of having much greater equality in sharing the proceeds of success.

However, it is not practical or desirable for every company to be structured like a John Lewis or Co-operative Bank - and therefore a way to give employees a greater voice in these organisations is vital. Miliband recently suggested that workers be given a say on remuneration boards in firms. However, this does not go far enough.

In Germany, they have successfully had worker representation on company boards since 1976, known as co-determination. This now applies to medium and large firms - and works from them having two boards of directors. Shareholders and trade unions elect members of the supervisory board, which then itself elects a management board. The supervisory board determines the company's agenda, whilst the management board runs the day-to-day business. This model of co-determination has also proved effective in mitigating against the need for strikes.

If we are to see the dilution of workers rights in companies - a situation which most people would not favour - then it is vital that the system is reformed to ensure that the voices of employees are properly heard. Doing so will result in happier workers, itself leading to improved productivity, and therefore company expansion and ultimately more jobs.