The Research
The Fair Work Convention commissioned Alma Economics to carry out independent research. The research provides 3 key outputs:
1. Updated indicators in the Fair Work Measurement Framework
2. A new International Fair Work Nation Framework
3. Useful lessons in areas where Scotland is lagging behind countries that are showcasing leading performance in fair work.
Fair Work Measurement Framework
The refresh of the Fair Work Measurement Framework[2] shows that there has been improvements in some areas of fair work in Scotland, but progress has not been uniform. Out of the 45 indicators considered, 19 have improved, 10 have worsened, and 14 have fluctuated or remained broadly stable. For two newly added indicators (career progression, and discrimination, harassment and bullying at work), there is no data from previous years.
Three dimensions of fair work (opportunity, security and fulfilment) saw overall improvements in their indicators, while two dimensions of fair work (respect and effective voice) saw overall mixed performance.
Within the Fair Work Measurement Framework measures there were a number of interesting findings[3].
Positively:
- There was a significant decrease in the proportion of employees earning less than the Real Living Wage, which now sits at 9% (2022).
- The gender pay gap almost halved since 2016 from 6.4% to 3.7% in 2022.
- Involuntary self-employment fell from 3.7% in 2016 to 2.0% in 2022.
- The ethnicity employment gap fell from 16.3 p.p in 2016 to 11.7 p.p in 2021, while the ethnicity pay gap declined slightly from 7.5% in 2016 to 5.9% in 2021.
More negatively:
- Between 2016 and 2021 the prevalence of self-reported stress, depression or anxiety caused or made worse by work more than doubled.[4]
- The percentage of employers who provided training to their employees has fallen from 73% in 2017 to 70% in 2021.
- Access to flexible working improved slightly since 2016 but 75.9% of workers in 2022 still have no access to flexible working.
- The disability pay gap increased from 13.7% in 2016 to 18.5% in 2021.
- The use of Zero Hours Contracts increased from 2.2% in 2016 to 3.4% in 2022.
The new International Fair Work Nation Framework builds on the Fair Work Measurement Framework, helping us understand comparative performance across a range of indicators.
International Fair Work Nation Framework
The International Fair Work Nation Framework[5] compares Scotland’s performance to that of Denmark, Belgium, Austria, Finland, Iceland, Ireland, the Netherlands, and England. The comparator countries chosen offer a stretching yet realistic benchmark for Scotland, incorporating a range of countries that are a similar size and with a similar GDP and where comparable data is available. The nations chosen have a variety of institutional contexts and many have positive performance across a number of the indicators, providing a range of strengths and weaknesses to learn from.
The framework includes 14 indicators, of which 13 are drawn from the Fair Work Measurement Framework and one, low pay, is unique to the International Fair Work Nation Framework due to the complexity of comparing rates of pay between countries. Overall, the limited selection of indictors reflects issues of data comparability at an international level. In spite of this, it provides an indication of performance across the fair work dimensions.
The heatmap below[6] shows the relative performance of each nation across the selected range of fair work indicators.
| Scotland | Austria | Belgium | Denmark | England | Finland | Iceland | Ireland | Netherlands | |
|---|---|---|---|---|---|---|---|---|---|
| Disability Employment Gap | 31.2 | 26.3 | 38 | 7.9 | 25 | 22.2 | No data | 41.3 | 25.8 |
| Gender economic inactivity gap | 6.2 | 8.6 | 8 | 6 | 7.3 | 3.1 | 5.5 | 9.5 | 6.9 |
| Youth unemployment rate | 10.2% | 12.0% | 18.2% | 10.8% | 12.8% | 17.1% | 12.0% | 14.5% | 9.3% |
| Workplace non-fatal injuries | 1630 | 1416.5 | 2234.9 | 2565.2 | 1800 | 4025.1 | 553.1 | 526.3 | 997.1 |
| Work-related ill health and disease | 4.9% | 13.2% | 9.5% | 9.0% | 5.1% | 25.7% | 9.4% | 3.1% | 7.4% |
| Gender pay gap[7] | 11.6% | 18.8% | 5.0% | 14.2% | 16.2% | 16.5% | 10.4% | 9.9% | 13.5% |
| Underemployment | 6.3% | 3.5% | 6.0% | 3.9% | 7.3% | 6.7% | 3.8% | 5.8% | 7.2% |
| Permanent employment | 95.0% | 91.0% | 89.7% | 89.1% | 94.4% | 83.7% | 83.8% | 89.6% | 71.8% |
| Involuntary non-permanent work[8] | 28.7% | 3.7% | 29.8% | 16.8% | 28.9% | 25.0% | 7.6% | 17.2% | 15.8% |
| Involuntary part-time work | 13.7% | 9.2% | 21.4% | 9.3% | 11.8% | 31.6% | 15.4% | 12.6% | 3.7% |
| Low pay | 9.6% | 14.7% | 11.5% | 8.7% | No data | 8.6% | 7.6% | 18.0% | 6.5% |
| Skills underutilisation - overqualification[9][10] | 29.0% | 20.0% | 10.8% | 17.1% | No data | 8.4% | 23.2% | 10.6% | 15.0% |
| Trade union membership | 29.3% | 26.2% | 49.1% | 67.0% | 22.1% | 58.8% | 91.4% | 24.9% | 15.4% |
| Collective bargaining[11] | 38.1% | 98.0% | 96.0% | 80.3% | 24.8% | 89.2% | 90.0% | 34.0% | 75.6% |
| Average ranking | 4.9 | 4.6 | 5.6 | 4.1 | 5.9 | 5.6 | 3.7 | 5.1 | 4.5 |
The International Fair Work Nation Framework helps us understand areas where Scotland is performing well with reference to comparable nations and helps us identify areas where improvement is required. Moreover, the International Fair Work Nation Framework offers us learning and insight from comparable nations on how improved practice can be achieved.
International Learning
Based on a rapid literature review, the researchers set out a group of policies which appeared to be driving strong performance on one or more indicators in particular nations, from where Scotland could consider learning[12]. The policy areas include:
- Active Labour Market Policies, including training, job search support, job creation schemes, and other specialised support programmes.
- Family Support policies, including parental leave and childcare support.
- Health, safety and well-being at work policy and best practices.
- Firm-level gender equality enforcement in the workplace policies.
- Trade Union and Collective Agreements, building on the Scottish Government’s already stated intentions within fair work.
Scotland's institutional and legislative environment is unique, as is the Scottish Government’s limited control over employment law. Despite this, understanding better what works in other contexts can support improved practice in Scotland. It is also important to recognise the elements of devolved powers that can be used to support meaningful progress and meet our aspirations around fair work.
The Fair Work Measurement Framework and the International Fair Work Nation Framework are complementary and both offer important guidance on how to strengthen fair work outcomes in the Scottish economy. When making recommendations, therefore, the Convention has considered findings from both frameworks.