The government has unveiled plans for a range of workplace reforms designed to improve the rights of workers on zero-hour contracts, agency employees and those working in the gig economy.
The proposed workplace reforms include a repeal of the Swedish derogation, a legal loophole that currently allows agency workers to be paid less than their permanent counterparts. The new legislation will also extend to all workers the entitlement to receive a statement of rights on the first day of employment, setting out their eligibility for sick leave and pay, as well maternity and paternity leave and pay.
Other planned workplace reforms include quadrupling the maximum employment tribunal fines for employers that are proven to have shown malice, spite or gross oversight, from £5,000 to £20,000. In addition, the holiday pay reference period will increase from 12 to 52 weeks, which the government has said will ensure those in seasonal or atypical roles get the paid time off they are entitled to.
The plans, set out by the Department for Business, Energy and Industrial Strategy (BEIS) in a document titled the Good work plan, are in response to the review into modern working practices by Matthew Taylor, chief executive of the Royal Society of Arts. His report, titled Good work: The Taylor review of modern working practices, published in July 2017, put forward various recommendations to government for protecting the rights of those working in the gig economy. The BEIS said its proposed legislation will take forward 51 of the 53 recommendations made by Taylor, and in some cases goes further than the review.
Business secretary Greg Clark, said:
Today’s largest upgrade in workers’ rights in over a generation is a key part of building a labour market that continues to reward people for hard work, that celebrates good employers and is boosting productivity and earning potential across the UK.
Yet Dr Jason Moyer-Lee, General Secretary for trade union IWGB said it was all but empty promises,
Exploited workers in this country are sick of press releases, rhetoric and self-congratulatory government announcements. What they need is a real upgrade in rights and a serious enforcement regime, neither of which appear to be on offer.
Julia Kermode, Chief Executive of the Freelancer and Contractor Services Association (FCSA), said,
We hope that this new requirement will go some way towards stamping out poor practices, in particular disguised remuneration schemes, which place workers at significant personal financial risk. However, it will be challenging for recruitment businesses to implement, given that they will be responsible for producing information on behalf of the supply chain if there are intermediaries involved.
Tim Thomas, Director of Employment and Skills Policy at manufacturers’ association EEF, said,
The announcement strikes the difficult balance between retaining the flexibility of the UK’s labour market, vital to manufacturers, and ensuring that good work is promoted. But, in transitioning from policy to regulation, government must ensure that employers who already provide high-quality, well-paid work, and who train in order for their workers to gain, are not left out in the cold.
Peter Cheese, chief executive of the Chartered Institute of Personnel and Development (CIPD), commented,
While the new reforms will go some way to improving employment rights for people on atypical working arrangements, simply changing regulation will not be a silver bullet for improving job quality more broadly. [Employers] must also take responsibility for improving the quality of work by investing in how they manage and develop people.
“In addition, the government must ensure its industrial strategy has an enhanced focus on improving job quality across the economy which sets out the actions it will take to nudge, encourage and support particularly smaller employers, to improve how they manage and develop people
Andy Chamberlain, IPSE’s (the Association of Independent Professionals and the Self Employed) Deputy Policy Director, commented,
IPSE is cautiously supportive of these proposals, which appear to preserve the flexibility people crave and don’t snuff out the entrepreneurial spirit of people who want to strike-out on their own. We are glad the message appears to be getting through that for most people, gig work is good work. The overwhelming majority of people actively choose to be self-employed because they value the flexibility of being their own boss. The devil, of course, will be in the detail, and the Government must ensure it doesn’t legislate people out of self-employment against their will.
Philip Richardson, Partner and Head of Employment Law at Stephensons Solicitors said,
For those working or hiring staff in the gig economy’or on zero-hours contracts, these latest reforms hopefully should give some welcome clarity as to the rights of workers. I’m pleased to see the government is now taking steps to tackle the issue head-on. One of the clearest messages that come from these reforms is that employers will be squarely in the spotlight and under increased scrutiny to better protect the rights of their workers and tighten up their employment practices. Most employers have and continue to take steps to do so but those who have looked for a loophole in the legislation will now find themselves facing significant fines at a tribunal and potentially long-term reputational damage.
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