AHEAD of a crucial by-election this week in the run-up to an approaching General Election, competition between Labour and the SNP is hotting up on an issue which, ironically, pretty much unites the parties.

The issue is agreements on fair pay. Labour call them “Fair Pay Agreements” while the SNP call them “Fair Work Agreements”.

Fair Pay Agreements are a new form of setting wages and conditions at sector level and which first came into use in New Zealand three years ago.

They are designed especially for sectors in which workers not only experience low pay and poor conditions but also find it difficult to organise themselves into unions. This may be because of high staff turnover, small and fragmented workplaces, and hostile employers operating with low profit margins.

More than a century ago, in what were known as the “sweated trades”, because of the long working hours, poor conditions and low pay, statutory wage levels and conditions were established. This was in recognition also of a situation in which a higher supply than demand for such workers existed, meaning unions were not in much of a position to help.

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There is, then, much similarity to what went before but the key difference now is that unions are to have a much greater role under fair pay and fair work agreements because they will be provided with the statutory means to compel employers to bargain with them over pay and conditions at a sectoral level.

At a British-wide level, Labour under Keir Starmer originally committed in their Employment Rights Green Paper called

“A New Deal for Working People” of 2021 to “establish Fair Pay Agreements across the economy [by] empower[ing] workers to act collectively to negotiate higher wages and more security at work through the roll-out of Fair Pay Agreements, starting in social care.

Fair Pay Agreements will establish minimum terms and conditions, which would be binding on all employers and workers in the sector”. But “starting in social care” seems to have been revised downwards to just “starting in the adult social care sector” following the publication of the final version of the document from Labour’s National Policy Forum in July.

This is because the text of this document promises to “publish a full and transparent review of the [adult social care sector] agreement [after which] we will also assess how and to what extent FPAs could benefit other sector”.

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It’s not hard to imagine any other Fair Pay Agreements will take many years to come into existence – or they may not happen at all.

All this stands somewhat in contrast to the unequivocal pledge from Scottish Labour’s “A Fair Deal at “work” current Holyrood manifesto. This commits to “roll out sectoral bargaining” when in government.

Meantime, last month’s the SNP-Scottish Greens Scottish Government’s Programme for Government included a pledge for “introducing sectoral fair work agreements”.

But it is not just approaching electoral tests which have notched up the level of competition between Labour and the SNP on this issue. It is also because for the first time ever, last month the Trades Union Congress (TUC) voted to adopt the policy that employment law should be devolved to the Scottish Parliament.

This now means it is more likely an incoming Labour government will accede to this, thus allowing any Scottish Government to go further. This results from many TUC union affiliates also being affiliated to Labour. Currently, Scottish Labour’s policy is to devolve employment law power though British Labour’s policy is not to do so.

So we could end up with the situation that the Westminster and Holyrood parliaments have pretty much the same powers on employment law. It would mean that the SNP and Labour in the Scottish Parliament would be tested on the sincerity of their commitments to introduce fair pay or fair work agreements.

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At the moment, any Scottish government is restricted on what it can constitutionally do on employment matters. Employment law is still reserved to Westminster. This means that the Scottish Government’s “Fair Work” policy is largely a matter of cajoling employers through voluntary means.

The only Fair Work Agreement which exists is in the Scottish civil service where the Scottish Government is the employer. This was created in 2018 covering four already recognised unions.

Following the TUC change of policy, unions now have a golden opportunity to extract from both Westminster political parties not only movement towards the devolution of employment law but the use of it to create statutory forms of sectoral collective bargaining though the economy and society.

This would represent a genuine case of “levelling up” because unions are most needed where they are absent or are weak. Set up by the Scottish Government, the Fair Work Convention has already identified hospitality, construction and social care as sectors being most in need of the likes of fair pay or fair work agreements.

It is here the mettle of Labour and the SNP will ultimately be tested.

Gregor Gall is visiting professor of industrial relations at the University of Leeds