Fairwork Coalition - The Issues
The issue
The coalition will look at ways of ensuring fairness at work for those in
low paid and precarious jobs, focusing in particular on reforming the law on
employment status to ensure all working people benefit from the same statutory
employment protection and employers are not able to use legal loopholes to
avoid basic rights.
In the UK there are three main categories of employment status: ‘employees’, ‘workers’ and
the ‘self-employed’. Being classified as 'self-employed',
a 'worker' or an 'employee' has major implications
for the statutory rights people have at work.
'Employees' are covered by all statutory employment rights, provided
in some cases they meet the qualifying periods.
'Workers' have the right to be paid the minimum wage, to be paid
statutory holidays and not to be discriminated against at work. But they
have no job security as they lack the right to statutory minimum notice and
protection from unfair dismissal. As a result, they can therefore find
themselves out of work at a moment’s notice. They are also particularly
vulnerable at times of recession as they do not have rights to statutory redundancy
pay. Even though individuals often accept more ‘flexible forms of work’ in
order to accommodate their caring needs, such ‘workers’ lose out
on family friendly rights such as rights to maternity, paternity, adoption
and parental leave and the right to request to work flexibly.
The 'self-employed' have the least protection, being only covered
by health and safety rights, anti-discrimination and equal pay.
A further problem is that it is often difficult for an individual to prove
what their employment status is and therefore which rights they are entitled
to. Where an employer refuses an individual their rights because of their status,
and the individual is not represented by a trade union, they may have no option
but to make a claim to an employment tribunal. However, this can be
an intimidating and expensive experience and can result in uncertain and inconsistent
outcomes, due to the complex and ever-changing tests which tribunals use to
decide whether an individual is an employee, a worker, or self-employed. Employers
and their lawyers have also become increasingly adept at drafting contracts
designed to label an individual as self-employed.
The coalition is concerned that an increasing number of working people in
the UK are being denied rights that provide job security and fair treatment
in the workplace as a result of their employment status. This includes most
agency workers, home workers, seasonal workers and casual staff
The case studies in our newreport Fair
Work – Fighting poverty through decent jobs confirm
that the employment status loophole is a key reason behind the ongoing existence
of insecure work, denying some of the very worst off workers the most basic
of protections and making it even less likely that they will progress to
better jobs. The Commission on Vulnerable Employment’s report [short
report] [full report]
also clearly showed the link between precarious employment, as a result of
poor employment protection, and mistreatment at work.
The CoVE Report also made a conservative estimate that at least 2 million
workers in the UK were in vulnerable employment, with at least 500,000 of these
workers in extremely insecure and low-paid work.
Workers in temporary and insecure jobs are at high risk of persistent poverty.
People in this position are faced with large variations in their weekly incomes,
poor working conditions and limited access to training and progression routes.
They are likely to have poorer health as a result of their work and to cycle
between unemployment and low paid jobs – further reducing their longer
term employment prospects.
The evidence also makes clear that extending legal protections to these workers
would not have adverse economic effects, but would lead to positive outcomes
for working people and their families. The OECD has convincingly shown that
employment protection legislation does not have a negative effect on employment
and unemployment levels and can assist in reducing inequality (as we discuss
in more detail in our report Fair Work – Fighting poverty through
decent jobs and in a new Touchstone
pamphlet). Many other European countries with successful economies ensure
far better working protections for all workers.
The coalition believes that the UK’s system of employment status is
enabling mistreatment, and that there is a strong need to modernise the law
so that it accommodates the UK’s increasingly diverse and flexible forms
of employment relationship and ensures that all working people have the same
set of basic rights.
Change is needed now. The Government needs to act to make fairness at work
a reality for all working people.
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