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UK Labour and unions push for greater employee protections
16/09/2021
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John VDLD
John van der Luit-Drummond is editor of International Employment Lawyer

UK workers will be guaranteed a £10-per-hour minimum wage, protection against fire-and-rehire practices, and the right against unfair dismissal from day one of their employment should the Labour Party win power at the next general election, the party’s leader declared this week.

Giving a speech at this year’s TUC conference on 14 September, Keir Starmer MP also pledged to extend and raise sick pay to all workers, promised to ban zero-hours contracts, and also took aim at Boris Johnson’s recently announced plan to increase national insurance contributions, saying that under the current government “working families across the country don’t get a pay rise but will get a tax rise”.

“Ensuring good-quality secure work, underpinned with employment rights fit for the reality of modern working, is not only good for employees, but it’s good for business and is part of getting our economy firing on all cylinders,” said Starmer. “Too many people in Britain spend their lives worrying about how many hours they’ll be given next week, what will happen if they need to attend a medical appointment, or how they’ll pay the bills if they fall ill.”

Commenting on Starmer’s speech, TUC General Secretary Frances O’Grady said the Labour leader was right to focus on dignity at work. “This pandemic has exposed the inequality and insecurity at the heart of our labour market. No one should be pushed into financial hardship if they fall ill at work. 

“Keir [has] promised that the next Labour government will increase statutory sick pay and make sure everyone has access to it – including the lowest-paid workers,” she continued. “During the pandemic, too many couldn’t afford to self-isolate because sick pay is too low or they aren’t eligible for it at all. This badly undermined our public health effort during covid.” 

The Fixed-term Parliaments Act means Starmer’s commitments to reform employment protections are unlikely to be realised, if at all, until 2024. However, his speech follows a private members’ bill – debated in the House of Lords law week and officially adopted by the Labour Party in July – that, if passed, would improve workers’ rights much sooner.

Lord John Hendy QC’s Status of Workers Bill addresses the different legal categories of “worker” under UK law and the different rights that come with them. Depending on whether a worker is classified as an “employee”, “self-employed”, a “limb worker”, or someone with a “personal service company”, the protections they have can vary enormously.

Critics of the current system argue that employers can use casual labour to avoid their tax and employment law obligations. For example, a 2016 inquiry by the Business, Innovation and Skills Committee found that agency workers at a Sports Direct warehouse were terminated for being ill and punished for taking water breaks.

Covid has emboldened bad bosses who are using the pandemic to redouble their attacks on workers’ jobs, pay, and conditions

A more recent, high-profile example involved ride-hailing app Uber claiming its drivers were self-employed contractors. In February 2021, however, the UK Supreme Court found the company’s drivers were “limb (b) workers” and, therefore, entitled to the national minimum wage, holiday pay, and rest breaks.

“There are so many things wrong with British workplace law but one of the worst is the classification of workers into categories, many of which have none or only a few of the rights that parliament has given to those classed as ‘employees’,” said Lord Hendy QC, an industrial relations and employment specialist at Old Square Chambers in London, and chair of the Institute of Employment Rights.

“Those rights are weak enough, but not having some of them at all because of your legal classification – like the right to the minimum wage or unfair dismissal protection – is completely unacceptable.”

Speaking ahead of last week’s Lords’ debate, Unite General Secretary Sharon Graham said: “It's a disgrace that millions of UK workers are the victims of inadequate labour laws which have more holes in them than Swiss cheese. Passing this bill is an absolute necessity for Britain’s workers and MPs and those in the House of Lords ought to recognise that. 

“Covid has emboldened bad bosses who are using the pandemic to redouble their attacks on workers’ jobs, pay, and conditions. I will not hesitate to use every tool at Unite’s disposal to fend off these attacks and advance the jobs, pay, and conditions of our union’s members.”

Although the Labour and union-backed bill has some cross-bench support in the Lords, Boris Johnson’s control of the House of Commons and the parliamentary timetable means the UK government effectively has a veto on progressing the draft legislation.

However, as Professor Andrew Tettenborn writes in The Spectator, there are sound political arguments in favour of Johnson’s government taking over or introducing their own version of Lord Hendy QC’s proposals.

While it remains to be seen whether Labour’s “all rights to all workers from day one” plan is but a pipe dream, UK unions continue to advocate for shorter-term measures designed to protect their members.

Employment figures published on 14 September by the Office for National Statistics (ONS) reveals payrolls returning to pre-pandemic levels, but a fall of  370,000 jobs across the hardest-hit sectors.

Sectors of the UK economy most affected by the pandemic include the airline industry (51% of employees on furlough), travel agencies (46%), and clothing manufacturers (26%).

With the government furlough scheme closing at the end of September, an August survey from the British Chamber of Commerce revealed that one in five employers are planning to make their furloughed workers redundant.

Diana Holland, Unite’s assistant general secretary, told the Guardian that the ONS figures demonstrate the need to continue furlough for the hardest-hit sectors to prevent job losses and damaging the UK’s post-pandemic recovery.

“For industries which continue to be directly affected by the pandemic, the ending of the furlough scheme will result in jobs being needlessly lost. Foremost among these is the aviation sector, whose recovery is still delayed and unlike any other sector is hugely reliant on the lifting of international restrictions,” she said.

The furlough scheme has played a critical part in keeping people in jobs, and as it draws to an end, we should be ready to cope with a fallout

Also commenting on the new ONS statistics, the TUC’s O’Grady said: “While it’s good news that more people are back in work, many working families are facing an uncertain autumn with the end of the furlough scheme – still supporting 1.6 million jobs – and a £20 cut to the weekly budgets of two million low-paid workers.

“The chancellor needs a plan to support jobs and family incomes. That means stopping the universal credit cut and extending the furlough scheme in hard-hit sectors for as long as is needed to protect jobs and livelihoods.” 

With an estimated 1.03 million job vacancies in June to August 2021, up from 764,000 in the previous three months, businesses and universities have also voiced serious concerns that the UK is facing a skills mismatch that will impede the nation’s recovery.

Dr Joe Marshall, CEO of the National Centre for Universities and Business (NCUB), commented that while the latest labour market statistics are largely a cause for optimism, policymakers must not become complacent.

“[The] statistics show a disproportionately high number of vacancies, alongside large numbers of people still furloughed and unemployed. There are worrying signs that employers across a multitude of sectors are currently facing difficulty in hiring. Businesses and higher education providers are therefore voicing serious concerns that we are facing a skills mismatch,” he said.

“The furlough scheme has played a critical part in keeping people in jobs, and as it draws to an end, we should be ready to cope with a fallout. We know that young people, in particular, have been most affected by lengthy periods of unemployment.”

To help cope with this, the NCUB has urged the government to restore a national labour market intelligence body, to replace the now-dissolved UK Commission for Employment and Skills.

“This body will be vital in order for businesses, universities and the government alike, to better understand the labour market needs,” said Dr Marshall. “It will allow universities to produce the highly skilled, adaptable workforce businesses need, to help the nation’s post-pandemic recovery.”