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  • International Workplace
  • 21 February 2018
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New rights for flexible workers under major government reforms

Millions of flexible workers will receive new rights under major government reforms as the UK becomes one of the first countries to address the challenges of the changing world of work in the modern economy.

The government’s ‘Good Work plan’ comes in response to the independent Taylor Review, published last year, which investigated what impact modern working practices are having on the world of work. The review found that the strength of the UK’s labour market is built on flexibility, but that a clearer focus is needed on quality of work as well as the quantity of jobs.

The reforms are a vital part of the Industrial Strategy, the government’s long-term plan to build a Britain fit for the future by helping businesses create better, higher-paying jobs in every part of the UK.

Following the Prime Minister’s pledge to not just protect but build on workers’ rights, the government on 7 February 2018 set out proposals to ensure workers know their rights and receive the benefits and protections they are entitled to, and that action is taken against employers who breach workers’ rights.

In some cases, the planned reforms go further than the review’s proposals, including:

  • enforcing vulnerable workers’ holiday and sick pay for the first time;
  • a list of day-one rights including holiday and sick pay entitlements and a new right to a payslip for all workers, including casual and zero-hour workers; and
  • a right for all workers, not just zero-hour and agency, to request a more stable contract, providing more financial security for those on flexible contracts.

The Prime Minister said:

“We recognise the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK’s position as one of the best places in the world to do business.

“We are proud to have record levels of employment in this country but we must also ensure that workers’ rights are always upheld.

“Our response to this report will mean tangible progress towards that goal as we build an economy that works for everyone.”

Matthew Taylor recognised that the UK’s employment law and tax law can fail to provide the clarity that employers and individuals need. The government is also launching a detailed consultation examining options, including new legislation, to make it easier for both the workforce and businesses to understand whether someone is an employee, worker or self-employed – determining which rights and tax obligations apply to them.

Business Secretary, Greg Clark, said:

“The Taylor Review said that the current approach to employment is successful but that we should build on that success, in preparing for future opportunities.

“We want to embrace new ways of working, and to do so we will be one of the first countries to prepare our employment rules to reflect the new challenges.

“We will take forward Matthew Taylor’s recommendations and commit to pursuing the quality of work as well as number of jobs.

“The ‘Good Work plan’ puts the UK at the front of the pack in addressing the challenges and opportunities of modern ways of working, it is an important part of the Industrial Strategy and will enhance our business environment as one of the best places to work, invest and do business.”

The government states it will seek to protect workers’ rights by:

  • taking further action to ensure unpaid interns are not doing the job of a worker;
  • introducing a new naming scheme for employers who fail to pay Employment Tribunal awards; and
  • quadrupling Employment Tribunal fines for employers showing malice, spite or gross oversight to £20,000 and considering increasing penalties for employers who have previously lost similar cases.

It will also ensure workers are paid fairly by:

  • providing all 1.2 million agency workers with a clear breakdown of who pays them and any costs or charges deducted from their wages;
  • asking the Low Pay Commission to consider the impact of higher minimum wage rates for workers on zero-hour contracts; and
  • considering repealing laws allowing agencies to employ workers on cheaper rates.

The government also commits to increasing transparency in the business environment by:

  • defining ‘working time’ for flexible workers who find jobs through apps or online so they know when they should be being paid;
  • launching a task force with business to promote awareness and take-up of the right to request flexible working introduced in 2014;
  • making sure new and expectant mothers know their workplace rights and raise awareness amongst employers of their obligations; and
  • launching a new campaign to encourage more working parents to share childcare through Shared Parental Leave – a right introduced in 2015.

The government has launched the following consultations to inform what the future of the UK workforce looks like:

These are complex issues and the government will consider the impacts of these reforms on business and other groups before implementing changes.

Over the coming months the government will work with industry to consider ways of encouraging the development of online tools for self-employed people to come together and discuss issues that are affecting them.