07 February 2018

The government has responded to the Taylor Review into Modern Working Practices, saying it will change legislation to improve workers' awareness of their rights and go further to punish employers who do not comply.

However, the proposals announced as part of the government's 'Good Work Plan' fall short of even Taylor's recommendations, which themselves were widely criticised for tinkering around the edges without committing to the much-needed reform of a system that has favoured individual protections over collective ones, weakening workers' rights overall, since the Thatcher years.

Signalling their intent to continue within this neoliberal paradigm, the government made no mention of trade unions or indeed any form of employee engagement except a vague promise of consultation with them when it comes to how quality work should be measured. This is despite the weight Taylor placed on the need for workers to have a stronger voice in the workplace, both to curtail exploitation and improve productivity.

Instead, the government focused more on raising awareness of the individual rights people already have than introducing more of them.

Raising awareness of existing rights

Workers will be provided with the right to a list of the rights they are entitled to; a right to a payslip; and a right for agency workers to receive a clear breakdown of who pays them and where any costs are deducted from their wage.

Campaigns will also be launched to improve mothers' awareness of their rights at work, encourage parents to share parental leave (despite research showing two in five fathers are ineligible, and among those who are eligible it is often unaffordable), and ensure employers understand their obligations toward workers with, or expecting, children.

Those working in the 'gig economy' via apps, such as Uber drivers or Deliveroo riders, will be provided with further clarification on when they should be paid when the government defines 'working time'. However, it appears this law will only apply to those who have successfully challenged their employment status at tribunal and are confirmed 'workers'. The majority are still misclassified as 'self employed'. A consultation will now be launched to consider how it can be made easier for employers and workers to understand which employment status - and thus how many workers' rights - an individual is eligible for.

Elsewhere, a task force was promised to promote business' awareness and take up of the right to request flexible working, which ultimately offers workers the right to ask for a change in working arrangements but not to receive it.

Despite the need for the extra push to encourage the use of this 'right', which has been in law since 2014, the government announced a new 'right to request' - this time the right to request a more stable contract for both 'workers' and 'employees'.

Raising awareness of existing rights is not enough when the system continues to rely on workers to police their own rights. The Institute of Employment Rights recommends the establishment of an independent Labour Inspectorate to ensure employers stay within the law; and the repeal of laws that weaken trade unions, allowing them to hold employers to account when they exploit workers. Further, the distinction between 'workers' and 'employees' should be dropped and a universal status of 'worker' introduced, providing the full suite of rights to all people in employment from day one. Read more about our recommendations in our Manifesto for Labour Law.

Enforcement

The government also promised to improve the policing of employment law, with a vague vow to enfore holiday and sick pay for precarious workers "for the first time"; take "further action" to catch employers who illegally hire unpaid interns to do the job of a 'worker' (a practice known to be widespread but for which no employer has ever been prosecuted); name and shame employers who break court orders to pay compensation to their workers (currently, around half of all tribunal awards go unpaid); and quadruple the fine that can be slapped on malicious or grossly negligent employers to £20,000. It also vowed to 'consider' giving tribunals the power to charge increasingly hefty fines to employers who repeatedly breach the same laws.

While improvements to enforcement are desperately needed, it is currently unclear how the government intends to improve the policing of holiday and sick pay or the employment status of interns. Further, the proposed penalties are extremely weak, considering those who do not pay compensation when they have been ordered to do so, or who continue to break laws they have already been caught breaching, are wantonly disrespecting the law.

The Institute of Employment Rights recommends that working standards are maintained through trade union access to the workplace, the promotion of negotiation between employers and trade unions to set dispute resolution procedures that mean more breaches can be settled in-house rather than through the courts, and independent Labour Inspectors with the power to hold employers to account. We also propose stronger powers for Labour Courts, a removal of the cap on damages for workers who have been unfairly dismissed, and much stronger penalties for those who breach the law, including criminal sanctions for the worst offenders. Read more about our recommendations in our Manifesto for Labour Law.

Pay

On pay, the government offered further consultation but no guarantees. The Low Pay Commission will be asked to consider the impact of increasing minimum wage rates for people on zero-hour contracts, while the government will consider repealing the Swedish Derogation - a loophole in the law that allows agencies to pay workers a lower wage than permanent colleagues doing the same job.

The Institute of Employment Rights recommends that sectoral collective bargaining is reinstated, allowing trade unions to negotiate with employers' associations for wages and conditions that apply to workers across entire industries. Further, zero-hour contracts should be replaced by Defined Hours Contracts, which set out the minimum number of hours per week or month a person will work, and prescribe a percentage (up to 10-20%) of paid hours ‘on call’. Read more about our recommendations in our Manifesto for Labour Law.

Quality of work

Lastly, the government agreed to consider the quality of work when agreeing new sector deals with industry, saying it would encourage employers to demonstrate investment in their workforce to improve productivity. Here, the government promised to work with trade unions as well as labour market experts and businesses to decide the criteria for 'quality work'.

The Institute of Employment Rights recommends that laws weakening trade unions are repealed and sectoral collective bargaining is reinstated, allowing workers a stronger voice in the workplace to negotiate on their pay, conditions, training and other issues in order to improve employee engagement and productivity. Further, we propose the re-establishment of a Ministry of Labour to represent workers' voices in Westminster, and the creation of a National Economic Forum, at which stakeholders from across society can put forward strategic plans, particularly for skills and training, and scrutinise the impact of labour laws. Read more about our recommendations in our Manifesto for Labour Law.