08 December 2016

By Sarah Glenister, National Development Office, Institute of Employment Rights

When taking on the mantle of prime minister this summer, Theresa May attempted to rebrand the Tories as “the party of workers” and two new reviews last week ostensibly serve to back this up with action. But one key stakeholder in her apparent fight for workers’ rights is missing — workers.

The Taylor review was launched in October and saw May hire Matthew Taylor, former adviser to Tony Blair, to head up a new investigation into how the burgeoning “gig economy” affects workers’ rights and whether a new framework of employment law is needed to adapt to the changing world of work.

On Wednesday last week it was announced that Taylor and his team would visit locations around Britain to gather evidence for his investigation, naming three “experts” as his colleagues.

Of those three, only one was connected in any way to workers’ rights — chief executive of the Gangmasters Licensing Authority Paul Broadbent.

The others were a businessman: Greg Marsh, founder of onefinestay, a service providing luxury holiday apartments; and Diane Nicol, an employment lawyer for Pinsent Masons, which specialises in representing employers during industrial relations disputes. According to the legal firm’s website, clients have described her as “always commercial.”

Despite the review’s apparent focus on making work fair in the gig economy, no-one with experience of trade disputes or employment law from the worker’s point of view has been recruited to the panel leading the report.

This is astonishing considering the mounting evidence that increasingly casualised labour is making the poorest poorer while benefiting the rich.

TUC analysis of Office for National Statistics figures show that 88 per cent of new full-time jobs created in the three months to July of this year were classified as self-employed, and that such roles now account for one sixth of all jobs in the UK.

These people are not only excluded from basic employment rights, they are also losing out on pay, according to analysis for the Guardian by John Philpott, who discovered that those (mis)classified as self-employed take home half of the wage of the average worker.

A similar situation is true for others in precarious jobs, with those on zero-hours contracts earning around 40 per cent of average pay, and temporary staff receiving around two-thirds of the typical income of someone in secure work.

As GMB’s victory against Uber this autumn demonstrates, it is likely a significant proportion of those concerned would be legally defined as “workers” if their cases were scrutinised, and thus entitled to basic employment rights such as minimum wage, rest breaks and holiday and sick pay.

The government also turned its back on workers when it launched its consultation into corporate governance earlier this week.

The new green paper claimed to tackle excessive executive pay and encourage firms to engage with their workers and customers in order to run their businesses in a fair way.

But in her introduction to the paper, May reassured employers that her government is “unequivocally and unashamedly pro-business” and that the motivation for the consultation was to protect the reputation of the free market from what was described as a “widespread perception” of disconnect between the highest earners and the ordinary worker (a “perception” usefully supported by the paper’s own admission that total pay for CEOs of FTSE 100 firms has increased from being 47 times to 128 times that of the average worker over the last 18 years).

“For people to retain faith in capitalism and free markets, big business must earn and keep the trust and confidence of their customers, employees and the wider public,” May urged, promising “a new approach to strengthen big business” through what appears to be a purely tokenistic programme on executive pay and corporate governance.

Despite the fact that shareholder votes on executive pay have so far failed to make a dent in the upwards surge of CEO earnings (even during the so-called “shareholder spring” of 2012-13 they increased by 15 per cent), most of the options offered by the government to stem excessive pay simply extend the same policy of relying on those at the top to self-regulate.

A nod to engaging workers is given here and there through policies that amount to little more than providing what TUC general secretary Frances O’Grady has described as a “glorified suggestion box.”

When the possibility of giving workers a seat at the top is addressed, the government promises it is “not proposing to mandate the direct appointment of employees or other interested parties to company boards.”

The Institute of Employment Rights will provide evidence both to the consultation on corporate governance and the Taylor review, advocating for the 25 policy recommendations put forth in our Manifesto for Labour Law, already adopted by the Labour Party.

We propose that workers should be represented at every level of the economy — sitting on company boards, negotiating with employers at both enterprise and sectoral levels, and represented in Parliament through a reinstated ministry of labour with a Cabinet seat, as well as a national economic forum that brings all stakeholders in society together to scrutinise policy.

By putting forth a universal definition of “worker,” we simplify labour law to ensure everybody in employment is automatically entitled to employment rights from day one.

This will be an important step in closing the loopholes exploited by companies like Uber to evade both taxes and their responsibilities to their workers.

As the Social Mobility Commission warns that only 10 per cent of those on low pay ever escape onto higher earnings, it is vital that we provide better opportunities for democracy at work. Powerless against employers, workers are clearly trapped within low-skilled and low-paid jobs, driving Britain towards an impending skills crisis and continued low productivity that holds us back from recovery and makes us vulnerable to future crises.

We agree with the government on one thing: a new framework of employment law is vital to remedy the problems inherent in today’s world of work.

But no solution can be found among shareholders and business leaders; a brighter future will be wrought by finally giving workers an equal say.

Originally published in the Morning Star