Government announces workplace reforms to protect rights of modern workforce

workplace reforms

The government has unveiled plans for a range of workplace reforms designed to improve the rights of workers on zero-hour contracts, agency employees and those working in the gig economy.

Business secretary Greg Clark said: “Today’s largest upgrade in workers’ rights in over a generation is a key part of building a labour market that continues to reward people for hard work, that celebrates good employers and is boosting productivity and earning potential across the UK.”

However, Dr Jason Moyer-Lee, general secretary for trade union IWGB, argued: “Exploited workers in this country are sick of press releases, rhetoric and self-congratulatory government announcements. What they need is a real upgrade in rights and a serious enforcement regime, neither of which appear to be on offer.”

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The proposed workplace reforms include a repeal of the ‘Swedish derogation’, a legal loophole that currently allows agency workers to be paid less than their permanent counterparts.

The new legislation will also extend to all workers the entitlement to receive a statement of rights on the first day of employment, setting out their eligibility for sick leave and pay, as well maternity and paternity leave and pay.

Other planned workplace reforms include quadrupling the maximum employment tribunal fines for employers that are proven to have shown malice, spite or gross oversight, from £5,000 to £20,000.

In addition, the holiday pay reference period will increase from 12 to 52 weeks, which the government has said will ensure those in seasonal or atypical roles get the paid time off they are entitled to.

The plans, set out by the Department for Business, Energy and Industrial Strategy (BEIS) in a document titled the Good work plan, are in response to a review into modern working practices by Matthew Taylor, chief executive of the Royal Society of Arts. His report, titled Good work: The Taylor review of modern working practices, published in July 2017, put forward various recommendations to government for protecting the rights of those working in the gig economy.

The BEIS said its proposed legislation will take forward 51 of the 53 recommendations made by Taylor, and in some cases goes further than the review.

Julia Kermode, chief executive of the Freelancer and Contractor Services Association (FCSA), said: “We hope that this new requirement will go some way towards stamping out poor practices, in particular disguised remuneration schemes, which place workers at significant personal financial risk.

“However, it will be challenging for recruitment businesses to implement, given that they will be responsible for producing information on behalf of the supply chain if there are intermediaries involved.”

Tim Thomas, director of employment and skills policy at manufacturers’ association EEF, said: “The announcement strikes the difficult balance between retaining the flexibility of the UK’s labour market, vital to manufacturers, and ensuring that good work is promoted.

“But, in transitioning from policy to regulation, government must ensure that employers who already provide high-quality, well-paid work, and who train in order for their workers to gain, are not left out in the cold.”

Peter Cheese, chief executive of the Chartered Institute of Personnel and Development (CIPD), commented: “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. [Employers] must also take responsibility for improving the quality of work by investing in how they manage and develop people.

“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.”