Government’s new workplace reforms: the world responds

The UK government has introduced what it claims to be the most significant package of workplace reforms for 20 years in response to last year’s Taylor Report on working practices. The Good Work Plan has introduced a range of measures which the Government claims will improve the rights of agency and part time workers and discourage employers from indulging in unwelcome practices.  The reforms are intended to stop businesses opting out of equal pay arrangements for agency employees and improve the conditions for gig economy workers generally, for example by giving workers details of their rights from the first day in a job, such as eligibility for sick leave, pay levels, maternity and paternity leave.

The reforms are based on the recommendations made by former Tony Blair adviser Matthew Taylor in his review into employment. The government has pledged to implement 51 of Taylor’s suggested 53 reforms, although they have not bowed to calls to ban zero hours contracts.

The reforms have been met with a range of responses from union leaders, professional bodies and other commentators.

Frances O’Grady, General Secretary, TUC

“These reforms as a whole won’t shift the balance of power in the gig economy. Unless unions get the right to organise and bargain for workers in places like Uber and Amazon, too many working people will continue to be treated like disposable labour. The right to request guaranteed working hours is no right at all. Zero-hours contract workers will have no more leverage than Oliver Twist,”

Peter Cheese, chief executive of the CIPD

“We welcome this ambitious range of workplace reforms. Work can and should be a force for good and these measures will give atypical workers, such as temporary staff and people on zero hours contracts, more rights while recognising the value of such ‘non-standard’ employment contracts to both workers and employers.

“We particularly welcome the extension of the right to a clear and comprehensive day-one written statement of rights to all workers and the move to bring forward plans to create a new single labour market enforcement body.  We also strongly back the increased remit of the Secretary of State for Business, Energy and Industrial Strategy to ensure “quality of work” and the intention to create clear metrics to measure the quality of work in the UK labour market. The UK’s labour market is nearly at full employment, we need to ensure that those jobs are quality jobs, providing workers with the appropriate pay and protections as well as development opportunities so people can progress at work.

“It’s positive to see that the Government has recognised that the gig economy and zero hours contracts can provide the flexibility that many workers and organisations need. These alternative ways of working can, if managed appropriately, help people into work and continue to work in a way that fits their lifestyle. In the changing world of work, and in a post-Brexit environment, it’s essential that businesses can work in a way that is flexible to market demands and the changing needs of individuals.

“While the new reforms will go some way to improving employment rights for people on atypical working arrangements, simply changing regulation will not be a silver bullet for improving job quality more broadly. Businesses must also take responsibility for improving the quality of work by investing in how they manage and develop people, for example by boosting training, improving job design and creating more flexible working opportunities, to ensure that all workers have the opportunity to reach their potential at work. In addition, the Government must ensure its industrial strategy has an enhanced focus on improving job quality across the economy which sets out the actions it will take to nudge, encourage and support particularly smaller employers, to improve how they manage and develop people.”

Jane van Zyl, Chief Executive of Working Families

“The Government’s Good Work Plan is a step in the right direction, particularly when it comes to setting out day-one rights for leave entitlement and pay. However, more could be done to protect people in work who are not officially designated as employees.

“Because of their employment status, parents who are designated ‘workers’ are not entitled to the same family-friendly rights as employees: rights like maternity, paternity and adoption leave and pay; the right to request flexible working; and time off for emergencies.

“Things are no better for parents whose employer has classified them as ‘self-employed’.  For example, a recent caller to our legal advice helpline was expecting a baby who had a congenital condition and was only expected to live for a few weeks.  Her husband was a self-employed minicab driver and he wanted to take time off to be with the baby. As he is self-employed, there was no form of paternity pay, so he couldn’t afford to stop working.

 “Whilst the government promotes this three tier employment contract framework, it should be moving employers toward the presumption that a person is an employee, and to achieving a level playing field on parental rights across employment contracts. A written statement of rights is all very well, but there need to be meaningful parental rights available to parents in insecure work, to include in them.”

Andy Chamberlain, Deputy Policy Director, IPSE

“IPSE is cautiously supportive of these proposals, which appear to preserve the flexibility people crave and don’t snuff out the entrepreneurial spirit of people who want to strike-out on their own. We are glad the message appears to be getting through that for most people, gig work is good work.

“The overwhelming majority of people actively choose to be self-employed because they value the flexibility of being their own boss. We are glad the Government has listened to IPSE and have signalled they will introduce legislation to simplify employment status. The devil, of course, will be in the detail, and the Government must ensure it doesn’t legislate people out of self-employment against their will.

“IPSE will strongly resist any attempt to push all gig workers into the worker category, as this deprives people of the flexibility of being their own boss. IPSE also doesn’t want the Government to align tax and employment tests, especially if it turns out to be a tax grab dressed up as giving people more rights they don’t necessarily want.”

Phil Jukes, HR Consultant, Jaluch 

“The timing of this announcement given the chaos over Brexit seems crazy. While it may be seen as a priority given debates over the gig economy in the last few years, in the current climate we don’t know whether our economy is on the up or the down, and whether we will be able to recruit essential staff from Europe to resource roles.

“In practical terms laws will need to be changed to accommodate these changes, for example contracts being issued from day one of employment rather than within eight weeks of starting. This will create massively more administration in those sectors where there is a high reliance on seasonal or temporary workers, such as farm workers, retail and hospitality etc. Many workers in continental Europe work in the ‘shadow market’ or ‘black market’, and this could encourage more UK employers to do the same in order to save money on administration by using alternative methods of recruitment and avoid potential labour charges. In Denmark, for instance a study suggested that around half the population purchases shadow work and that in some sectors, such as construction, half the workforce was working in the shadow economy.

“In terms of quadrupling the maximum employment tribunal fees for employers who show “malice, spite and gross oversight”, in my experience, and that of my colleagues we’ve never come across these types of fees before, making us wonder how widely used they have actually been.”

Leon Deakin, Partner and Head of Employment, Coffin Mew

“The Business Secretary’s claim that the new workplace reforms will be the ‘largest upgrade in workers’ rights in a generation’ seems to be a bit of an overstatement. It appears that the proposed legislation mostly amounts to tinkering around the edges, rather than substantial change. It may make small inroads into protecting workers’ rights, but it isn’t going to be the wholesale reform that many were hoping for. For example, despite much contention, it looks like zero hour contracts are here to stay.

“The government continues to dodge the really hard part – a complete overhaul of the legislation to suit today’s new ways of working. Given Brexit, however, this does not come as a surprise.

“Specifically increasing the penalty fine for an employer’s aggravating conduct when they have shown malice, spite or gross oversight when breaching employment rights makes a great sound bite but is less impressive when it is considered that such fines are hardly ever imposed. Similarly, the abolition of the Swedish Derogation with regards to agency workers will make little significant difference as it is not heavily relied upon in practice.

“Whilst some developments will be anti-climactic, we welcome the requirement to give a ‘statement of rights’ on day one to a worker as this should not be unduly onerous to well-intentioned employers.”

Matt Weston, UK Managing Director, Robert Half,

“The Government’s new workplace reforms have fired the starting gun on the race to professionalise the gig economy. Short-term employees are proving to be more vital to the UK’s economy with each passing day as companies compete to plug the skills gap created by digitalisation. 1.6 million businesses plan to hire temporary or contract staff in the next 12 months so providing these in-demand workers with greater protection can deliver increased productivity and growth. Flexible, strategic staffing models – those with a dynamic mix of permanent employees and highly-skilled temporary professionals – can provide companies of all sizes with the agility to quickly increase or decrease the size of their workforce based on workload demands and confidence amidst a backdrop of economic uncertainty.”

Neil Tonks, MHR 

“These reforms go a little way to aligning employment rights and modern working practices, while at the same time maintaining flexibility in the labour market which is essential to help organisations cope with seasonal fluctuations.

“Having the right to be given a “statement of rights” immediately on starting work will help workers to know where they stand. The reforms also remove an anomaly which currently means that annual bonuses disproportionately inflate holiday pay in the 12 weeks after they’re paid. The abolition of the “Swedish Derogation” for agency staff will, however, not please everyone as some workers currently benefit from it. Employers need to familiarise themselves with their new obligations and prepare for the potential cost implications, as well as the impact on available talent.”