It’s disappointing that the government’s response to the Taylor Report, published today, watered down what were already weak proposals on enforcing employment rights. But there are still some proposals that could help workers stand up to exploitative companies.
Last year, UNISON’s successful challenge in the Supreme Court led to employment tribunal fees being declared unlawful. It widened access to justice and made it easier for workers to enforce their rights.
But enforcing employment rights via an employment tribunal is still difficult for many workers, particularly those in low paid, precarious employment. Which is why we lobbied the Taylor Review to put forward innovative proposals that would make it easier for workers to enforce their rights. For example, we argued that workers in supply chains should be able to bring claims for unpaid wages against contractors at the head of supply chains. And we said that unions should have a right to access workplaces to help workers enforce their rights and negotiate improved terms and conditions.
The Taylor Review was relatively unambitious and cautious in terms of its recommendations to improve the enforcement of employment rights. It failed to match the ambition of union campaigning in this area. The government response has watered down the Taylor Review’s recommendations even further.
Nevertheless, there are some recommendations from the review that the government has taken forward, which will benefit workers. Here are three key points to take away from the enforcement section of the government’s response to the Taylor Review.
1. HMRC to enforce sick pay and holiday pay
There will be consultation on whether HMRC’s enforcement remit should be extended to include underpayment of holiday and sick pay.
“The government accepts that there is merit to the state enforcing these rights on behalf of the most vulnerable workers, and intends to move in this direction.”
This is something the TUC has long campaigned for. Evidence from the Labour Force Survey suggests that around 2 million workers do not get the statutory minimum number of leave days. Dealing with this issue will provide a significant benefit to many low paid workers.
At the moment, an HMRC compliance officer can do nothing to help a worker that has been paid less than the National Minimum Wage for annual leave or where they have received no annual leave at all. This means a worker’s only option is to pursue a claim via an employment tribunal. This can be costly and intimidating for a worker.
Unions have flagged up many examples where the HMRC has successfully recouped under paid wages for workers but have been unable to claw back the lost holiday pay. If this change is made it should lead to more money finding its way into workers pockets.
2. EAS remit extended to cover umbrella companies
The government has also accepted the recommendation to strengthen the role of the Employment Agencies Standards Inspectorate (EAS), subject to being approved by the Director of Labour Market Enforcement). Going forward it is likely that the EAS will have responsibility for policing umbrella companies. Umbrella companies often operate as an intermediary between an employment agency and the worker, carrying out their payroll function. Unions have flagged up many instances where workers have been told they will receive a specified rate of pay by the employment agency, only to find that their wages are much lower once the umbrella company has taken its cut. Greater enforcement action against rogue umbrella companies is welcome. Workers should be entitled to receive what they are told they are going to be paid.
However, EAS is chronically underfunded. It has around nine inspectors responsible for policing 23,980 employment agencies and over the last five years has seen it’s budget cut in half to £500,000. If this proposal is going to be effective, EAS must be properly resourced.
3. Helping workers enforce their tribunal awards against employers who choose not to pay up
The Taylor Review recognised that workers often had trouble recouping the money that was awarded to them by employment tribunals. The Department for Business, Innovation and Skills in 2013 found that only 53% of successful claimants surveyed received full or part payment without enforcement action. More than a third (35%) had not received any payment at all. The Taylor Review recommended that the government should make the enforcement process simpler for employees and workers by taking enforcement action against employers who do not pay employment tribunal awards, without the employee/worker having to fill in extra forms or pay an extra fee and having to initiate additional court proceedings.
The government has accepted that action needs to be taken and will consult further.
The TUC will continue lobbying for meaningful changes which drastically reduce the 35% of claimants who currently don’t receive the money that is owed to them.
Taken together these three measures will help workers whose basic employment rights are denied. But to tackle the problems caused by the spread of insecure work, the government will have to go much further.