13 February 2017
In October 2014, then Business Secretary Vince Cable launched a review into employment statuses, noting an increase in precarious work. The review he commissioned was completed in December 2015 but was only published last week.
On announcing the review, Cable highlighted that “some types of contracts which offer fewer employment rights, and which were never designed to be widely used, have become much more commonplace”. Indeed, this trend has continued, with the TUC this week estimating that around three million – about one in ten – UK workers now don’t have guaranteed hours or fundamental workers’ rights, up 27% on 2007.
When questioned on bogus self employment in 2014, Cable told parliament it was clear from work undertaken by his department that “there is what appears to be a growing number of people who are not genuinely self-employed but have, in some sense, fallen through the cracks … I would hope my successor, whoever it is, takes this seriously”.
But it seems the Tories had different priorities. Although it was originally expected that recommendations for reform would be made by March 2015, the report was not published until December 2015, issued no firm recommendations, and was not made public. Any concern over employee status seemed to drop off a cliff until pressure mounted from a series of exposes revealing the conditions endured by people in precarious work at such companies as Sports Direct and Amazon, which have been described as “worse than a prison”.
Indeed, Labour MP Jim Cunningham brought the issue to parliament in March 2016, whilst calling for an independent review of employment statuses. He noted that the Department for Business had confirmed to parliament the review was being conducted in March 2015, but in early 2016 they announced a completely separate Working Group to look into the issue without reporting on the review.
“I can only ask this: what have they been doing for the past year?” Mr Cunningham said.
Not much, it seems. The report provides broad information about employment statuses, but holds back from giving any firm recommendations, except that further work is needed. It concludes that “Increasing awareness of employment status and associated protections, as well as clarifying some of the key terms may increase individual confidence and will go some way to empowering individuals to claim their rights. Some of the more unscrupulous employers will also have to start to take notice if a significant proportion of their workforce stand up for what is rightfully theirs as a result.” It is difficult to see, however, why an employer would “have to start to take notice” of workers who do not have fundamental workers’ rights like the ability to claim unfair dismissal or even to have guaranteed hours. Even where the worker does have rights, tribunal fees of up to £1,200 act as a strong deterrent for any worker seeking to hold their employer to account.
The review also looked into the trade unions’ preferred option of scrapping ‘worker’ status entirely and flipping the presumption so that all people in employment are eligible for the full suite of workers’ rights from day one, unless they are proven not to be an employee (for example, if they are self employed). In the IER’s Manifesto for Labour Law, adopted by the Labour Party, we set out how universal rights can be provided to workers from day one and how they can be enforced.