News
Jessica Fino 7 Feb 2018 02:09pm

Employment rights boosted to help gig economy

The government has announced new employment rights for millions of workers following last year’s Taylor review into modern working practices

New measures include holiday and sick pay rights for all workers, including casual and zero-hour workers, as well as the enforcing of more stable contracts in order to provide financial security for those on flexible contracts.

The Taylor review said last year that low-paid workers should not be “stuck” at the minimum living wage or face insecurity. It called for a new category of worker, a “dependent contractor”, who should be given extra protections.

The Department for Business, Energy & Industrial Strategy (BEIS) said the government would take “further action” to ensure unpaid interns were not doing the job of a worker, as well as introduce a new name-and-shame scheme for employers who fail to pay employment tribunal awards.

Moreover, the government has asked the Low Pay Commission to study the impact of higher minimum wage rates for workers on zero-hour contracts.

BEIS added it acted on all but one of Matthew Taylor’s 53 recommendations, rejecting proposals to reduce the difference between the national insurance contributions (NICs) of employees and the self-employed.

Business secretary Greg Clark said the UK would be one of the first countries to prepare employment rules to reflect the new challenges, in a commitment to pursue “the quality of work as well as number of jobs”.

Following today’s announcements, the government launched four consultations on enforcement of employment rights recommendations, on agency workers, on measures to increase transparency in the UK labour market and on employment status.

Julian Sansum, employment partner at PwC, said, “The government has clearly said that it is not going to change the rates of tax and National Insurance contributions for the self-employed or employees, but presumably will use the consultation on employment status to clarify the position as to whether an individual should be treated as an 'employee' or 'self employed'.

Sansum added, “While the announcement stated that there will be no change to the rates of tax or NICs for employees or the self-employed, no reference is made in this respect to ‘workers’. This could suggest that changes to the tax and NICs of ‘workers’ have not been entirely ruled out.”

However, the union GMB described the government’s response to the Taylor Review as “trying to put out a forest fire with a water pistol”.

Tim Roache, GMB general secretary, said, “If the Government is serious about making life better for working people, giving workers the right to request that their bosses stop paying them poorly or treating them badly is an unfunny joke.

“I can tell you the answer to those workers' 'requests' right now. It's a deafening no.

“Abuse of agency contracts and insecure work is a deliberate business choice by employers who care about profit, not people.

“Big change is needed, change that is backed up by law and proper penalties for breaking those laws.

“Naming and shaming hasn't stopped companies robbing workers of the minimum wage. These are weak proposals, from a weak government that has promised much but delivered little for workers.”

Meanwhile, Paul Falvey, tax partner at BDO, welcomed the holiday and sick pay measures but questioned how well these would be enforced by an “already under-resourced” HMRC.

“The effectiveness of the new measures could also be reduced by planned increases in the minimum wage and in auto-enrolment pension contributions from April this year. This will encourage some businesses to rely on flexible workers to manage their costs, even if they now have to pay them holiday and sick pay,” he added.

The Association of Independent Professionals and the Self Employed (IPSE) was more optimistic, saying that the government’s response to the Taylor review was “very positive”, with measures that will “generally improve support for the self-employed”.

The IPSE welcomed the decision to not increase NICs contributions for the self-employed, who currently pay a lower level of NICs.

The Confederation of British industry (CBI) said it was right to review rules to ensure businesses are fit for the 21st century.

Neil Carberry, CBI managing director for people and infrastructure, said, “Firms will be keen to play their part in promoting greater awareness of employee rights, such as shared parental leave and flexible working, which will improve diversity and, therefore, productivity.

“Similarly, responsible businesses back strong enforcement against the small number of firms whose poor practices tarnish the reputation of the vast majority that are a force for good.”

The Federation of Small Businesses (FSB) reacted by saying the commitment to shelve permanent plans to hike NICs for the self-employed marked “a watershed moment”.

But TUC general secretary Frances O’Grady said the government has taken a “baby step when it needed to take a giant leap”.

“These plans won’t stop the hire and fire culture of zero-hours contracts or sham self-employment. And they will still leave 1.8 million workers excluded from key protections.

“Ministers need to up their game. At the very least they must end the Undercutters’ Charter that means agency workers can be paid less than permanent staff doing the same job.”

While welcoming the measures, the Recruitment and Employment Confederation (REC) said it was disappointed that there was no decision around improving the Apprenticeship Levy.

“We still need more clarity on some of the points raised, including the definition of zero-hour contracts and if agency workers are included. We also need to know when exactly people are eligible to request a contract and if additional paperwork around this will mean more bureaucracy and therefore a greater burden,” said REC chief executive Kevin Green.

Finally, Jane Gratton, Head of Business Environment at the British Chambers of Commerce also warned that government must be careful not to unduly burden firms with further costs and bureaucracy, which could put people out of jobs.


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