Certain types of employment linked to labour market violations

Labour market violations seems to be closely linked to the type of employment contract a worker holds, such as zero-hour or agency work.

This is according to research from think tank, Resolution Foundation which has found that around one in 20 workers do not receive any holiday entitlement and one in 10 do not receive a payslip at the same time as the growth of zero-hour contracts and agency work.

Neil Tonks, legislation manager at MHR, an HR and payroll provider believes the increase in zero-hour contracts and agency works has helped feed in to these violation as well.

Mr Tonks said:

While the growth of the zero hour contracts and agency work has helped the UK record its lowest rate of unemployment in 45 years, it seems this is coinciding with an increase in labour market violations with many employees failing to receive holiday pay, payslips and the minimum wage.

Regardless of whether people are employed on permanent, temporary or zero hour contracts, all employees are entitled to the same statutory rights.

The HMRC has also identified a record of 200,000 cases of employees who do not receive the minimum wage.  The research also found that labour market violations are also linked to the employee’s personal characteristics, the firm they work for, and the industry they work in.

Workers under the age of 25 and over 65 are the most likely not to receive a payslip, with around one sixth of over 65s stating they have no holiday entitlement.

Employees under the age of 25 are twice as likely than any other age group to be paid under the minimum wage.

Those on zero-hour contracts, temporary contracts and small to medium size enterprises (SME) employees also have a strong chance on missing out on payslips.

Sophie Wingfield, head of policy at the Recruitment & Employment Confederation (REC), said:

Well-resourced enforcement of labour market rules is essential. We need effective deterrents so employers don’t feel they can gain an advantage over compliant businesses by undercutting workers’ rights.

The Foundation believes that the scale of labour market abuse highlights the need for the state to step up to ensure the UK’s labour market rules are better enforced.

Lindsay Judge, senior economic analyst at the Resolution Foundation, said:

The UK has a multitude of rules to govern its labour market – from maximum hours to minimum pay. But these rules can only become a reality if they are properly enforced.

Labour market violations remain far too common, with millions of workers missing out on basic entitlements to a pay slip, holiday entitlement and the minimum wage.

The government’s welcome proposal to create a new single enforcement agency should leave it better placed to tackle these labour market violations than the multiple bodies currently operating, as long as it’s properly empowered and resourced.