The Status of Workers Bill, introduced to the House of Lords today, will bring an end to the increasing number of working arrangements that leave millions of UK citizens unable to rely on a regular wage.
Around 1 in 9 people in employment (3.7 million workers) are in insecure work, defined as jobs with no guaranteed salary. These individuals are often ‘gig’ workers, employed on zero-hour contracts or hired through agencies.
Such working arrangements are now endemic in key sectors such as care work and hospitality and are beginning to emerge in high-skilled roles. TUC research recently found 15.6% of caring, leisure and service workers were insecurely employed, 18.5% in skilled trades, and over one in 20 (6%) in professional jobs.
The UK’s unusually complex labour law means that these workers have a different employment status that exempts them from the basic rights many people take for granted, such as the right to sick pay, paid parental leave, and to take their employer to court if they are unfairly dismissed.
What’s more, those engaged in insecure work are more likely to belong to the vulnerable groups that have the greatest need for protections at work, including BAME workers, women, and those with disabilities.
Lord John Hendy QC, who will introduce the Bill, is a barrister who has represented workers and trade unions for over 40 years and seen the problems created by the UK’s employment status system multiply over time.
Lord Hendy, who is also Chair of think tank the Institute of Employment Rights, said:
“Insecure workers often have so few protections that the employer is essentially free to hire and fire at will, thereby keeping their workforce in a perpetual state of insecurity that prevents them from asking for better terms and conditions out of fear of dismissal.
By exploiting this weakness in the law, bad employers are allowed to undercut good employers, leading to the explosion in insecure work we’ve seen over the past decade and the decreasing availability of high-quality work.
Times of economic hardship and recession are known to accelerate the growth of precarious work and the impact of the Coronavirus pandemic is no exception – we have already seen several major retailers fall into the hands of employers known for using insecure contracts. Without urgent action, we can expect to see even more workers in the extraordinary position of never knowing when – or if – they will be paid.
For years this state of affairs has been justified in the name of ‘flexibility’ but there will be nothing to prevent employers from negotiating flexible conditions with their workers under the terms of this Bill. Instead, the proposals laid out today will provide for true flexibility, for both workers and employers. The reality is that a casual worker is unlikely to turn down a shift if they risk never being offered another, but when a worker has rights, they can make flexibility work for them too.”
Sarah Woolley, BFAWU General Secretary, said:
“The government has gone AWOL on workers’ rights at a time when millions have lost work or are being pressured into cuts to their pay and conditions. Insecure workers, many of whom are key workers, have been especially hard hit by the pandemic. Not only did many lose their jobs overnight as businesses collapsed – with no recourse to redundancy protections – but those who still have work are afraid to miss a shift in case they are never offered one again.
The human cost of this has been enormous, especially during the crisis. A recent BFAWU study found that one in five food workers were so poorly paid that they couldn’t afford enough to eat during the pandemic, even as they travelled to their jobs, day in and day out, to ensure rest of us didn’t go hungry.
We cannot allow anyone to live in fear like this.”
Mick Rix, GMB National Officer, said:
“There are hundreds of thousands of workers in the GiG economy who are denied certainty and rights through bogus self-employment. GMB union has fought many battles for years to get Uber drivers, Hermes and Amazon couriers workers’ status and rights.”
“While Uber and Hermes were forced by the courts to recognise their drivers and couriers as workers, Amazon continues to bogusly self-employ thousands of people and deny these keyworkers the rights and protections they are entitled to.”
“One of the major issues lying behind this exploitation is a lack of clarity in the law as to what constitutes self-employment and what constitutes employment by another. The proposals in this Bill would address that and builds on GMB union’s victory in the courts and the recent Supreme Court ruling on worker status.”
“The government recognised this problem years ago and promised to legislate. It has broken that promise again and again. Lord Hendy’s Bill provides a solution to the exploitation tens of thousands of workers are suffering, and the rights they are being denied. Government cannot keep burying its head in the sand any longer, if it wants to build back better, then it should demonstrate its support.”
Currently, workers fall into a variety of legal categories, each with different entitlement to rights. Employers are constantly seeking to downgrade the legal status of workers to give them the least rights possible.
- At the top of the tree of rights are those defined as ‘employees’.
- Then there are the ‘limb (b) workers’ who are not employees and have lesser rights.
- Next there are the ‘false self-employed’ – who are in reality employees, but who are tricked by their employers into paying their own tax and National Insurance whilst being offered no employment rights.
- Then there are those employed by a ‘personal service company’ – a company owned by the worker (but usually set up by the employer) which employs the worker and which has a commercial contract with the employer. Such workers technically have full employment rights but can only enforce them against their own company.
- Finally, there are the genuinely self-employed – individuals in business on their own account with their own clients or customers.e
The genuinely self-employed are unaffected by the Status of Workers Bill. But all the other categories will become ‘workers’ and entitled to all employment rights.
Other countries, including Italy and Spain, have recently passed laws to combat the exploitation of workers on ‘gig’ platforms such as Uber, including by forcing companies to provide ‘employee’ contracts. Government consultation into the problems raised by the UK’s complicated employment status system has been ongoing since 2015 and it was anticipated the long-awaited Employment Bill would propose solutions. However, the Employment Bill was recently dropped from the government’s legislative programme.
Notes to editor
Contact: Sarah Glenister on email@example.com with queries or to request an interview with Lord Hendy QC.
The Worker’s Status Bill
The Bill will be heard for the first time in the House of Lords on Wednesday 26 May 2021.