Becoming a Fair Work nation: consultation

This consultation seeks views on achieving this vision and ensuring Fair Work remains at the heart of our labour market interventions, particularly in the context of COVID-19 and EU Exit, by identifying the relevant challenges and opportunities for Fair Work across the Scottish economy.

What we have achieved

Scotland has made significant progress on Fair Work and has a lot to be proud of.

The Fair Work Convention’s Framework underpins the Scottish Government’s approach to Fair Work. Although the Fair Work Convention’s Fair Work in Scotland Report (December 2020) does not account for the impact of the pandemic, it does indicate that progress has been made on key issues like the disability employment gap, youth unemployment, gender and ethnicity pay gaps, secure employment and collective bargaining.

Fair Work First

In the absence of powers over employment law (which are reserved to Westminster), we are continuing to use all levers we do have to drive the change we want to see. Fair Work First is the key mechanism for driving Fair Work practice, using public sector investment to drive change.

Since 2019, the Fair Work First criteria have already been applied to over £2.4bn worth of public sector funding, including £619.8m of procurements.

Through Fair Work First we are applying Fair Work First criteria to public sector grants, other funding and contracts, encouraging employers to adopt fair work practice by committing to:

  • appropriate channels for effective voice, such as trade union recognition
  • investment in workforce development
  • no inappropriate use of zero hours contracts
  • action to tackle the gender pay gap and create a more diverse and inclusive workplace
  • payment of the real Living Wage
  • *offer flexible and family friendly working for all workers from day one of employment
  • *oppose the use of fire and rehire practice

*Note: the last two criteria are new and are effective from October 2021.

Our Fair Work First approach is being rolled out across the public sector and implementation is supported by guidance and an employer support tool. We have published statutory guidance supported by best practice guidance and a toolkit for procurement. We will strengthen our conditionality approach, to make paying at least the real Living Wage and providing appropriate channels for effective voice, such as trade union recognition a requirement of public sector grants.

Real Living Wage

The Scottish Government is committed to the real Living Wage as it provides pay based on a minimum income needed for an acceptable living standard. Fair Pay is fundamental to Fair Work, and we continue to provide support to the Poverty Alliance to enable them to deliver the Scottish Living Wage Employer Accreditation Scheme to increase the number of employees receiving the real Living Wage. The Scottish Government fully support payment of the real Living Wage and the real benefits to our economy of treating people who work more fairly. Many employers have gained Living Wage employer accreditation, recognising their commitment to paying their workers the real Living Wage. Scotland now has over 1.9 million workers receiving at least the real Living Wage (84.8% of employees aged 18+).[3]

There are currently over 2,000 Scottish Living Wage accredited employers – up from 14 in 2014.

Delivering on a ‘first 100 days’ manifesto commitment and further improving security in pay, work and hours, we are also now supporting the independent Living Hours Accreditation Scotland scheme. The scheme recognises that in addition to payment of the real Living Wage, the number and frequency of work hours are critical to tackling in-work poverty. Businesses have to pay the real Living Wage, provide a contract reflecting accurate hours worked with a guaranteed minimum of 16 hours a week (unless the worker requests otherwise), and ensure at least 4 weeks’ notice of shifts and guaranteed payment if shifts are cancelled within this period.

Disability Employment Gap

Between 2016 and 2019, Scotland’s disability employment gap reduced each year. The progress achieved over this time was due to the employment rate of disabled people rising faster than non-disabled people. Although the gap widened in 2020, likely affected by COVID-19, we remain on course to meet our overall ambition to at least halve the disability employment gap by 2038. The Scottish Government and partners have focused on three key priorities: supporting disabled people to enter employment; supporting employers to recruit and retain disabled people; and young people and transitions. This includes: funding the establishment of a Public Social Partnership to better support employers to recruit and retain disabled people (delivering sessions to 230 organisations and 1,120 employee representatives this year); developing the Scottish Government’s own Recruitment and retention plan for disabled people; providing support to disabled people through Fair Start Scotland, with 43% of participants identifying as disabled; and initiating a trial of Principles into Practice in 10 participating local authority areas to improve transitions support for disabled young people and those with additional support needs.

Scotland's Disability Employment Gap (percentage points), 2016-2020 [4]
Scotland’s disability employment gap percentage points, 2016 to 2020. In 2016 the gap was 37.4 percentage points; in 2017 the gap was 35.9 percentage points; in 2018 the gap was 35.5 percentage points; in 2019 the gap was 32.6 percentage points; and, in 2020 the gap was 33.4 percentage points.

Gender Pay Gap

The median gender pay gap for all employees in Scotland fell from 14.4 per cent in 2019 to 10.9 per cent in 2020, lower than the UK (15.5 per cent). The gender pay gap for full-time employees in Scotland fell from 7.2 per cent in 2019 to 3.0 per cent in 2020 and in the UK it fell from 9.0 per cent to 7.4 per cent. The median gender pay gap for full-time employees in both Scotland and the UK has decreased over the year due to the median hourly earnings (excluding overtime) for women increasing at a faster rate than the median hourly earnings (excluding overtime) for men.

The latest gender pay gap figures are the lowest on record and show that Scotland is still outperforming the UK as a whole.

Gender Pay Gap [5]
Median gender pay gap in Scotland compared to the UK.  For full-time employees the median gender pay gap in Scotland is 3 percent and in the UK 7.4 percent.  For part-time employees, the median gender pay gap in Scotland is -10.3 percent and in the UK -2.9 percent.  For all employees, the median gender pay gap in Scotland is 10.9 percent and in the UK 15.5 percent.

As part of taking steps to empower women, we will continue to work in partnership with the Scottish agricultural industry to bring forward measures to support women working in Scottish agriculture; through developing and expanding their skills and talents and supporting resilient and adaptive businesses into the future. This Financial Year we have committed £300,000 and during the course of the current parliament we will double this funding up to £600k to deliver a range of measures including the creation of the Skillseeder app for land based skills sharing to enable more participation in rural and land-based training; and the women in agriculture practical training fund.

Race employment

To address disparities in employment, we have taken and continue to take forward a number of measures to support our outcome of ensuring minority ethnic people can access, stay in or progress in employment. We have delivered the Public Sector Leadership Summit on Race Equality in Employment, which produced a Joint Commitment pledging Scottish Government and public authorities take action to tackle racial inequality in the workplace. To date the commitment has been publicly endorsed by 28 public bodies. We have also published the Minority Ethnic Recruitment Toolkit to support employers in recruiting from minority ethnic communities. Our Workplace Equality Fund also supports women, the over 50's workforce and disabled people, through an additional 34 projects. In total over 290 private businesses have benefitted from support with recruitment practices, workplace guidance, and through sharing best practice. Over 3500 staff have participated in training sessions along the way, and the fund continues to remove labour market barriers and help priority groups to enter, remain and progress in employment.

Through the Workplace Equality Fund, we have funded 24 projects with a collective funding of over £355,000, to support employers to focus on equality issues faced by minority ethnic workers.



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