The TUC is the voice of Britain at work. We represent more than 5.5 million working people in 48 unions across the economy. We campaign for more and better jobs and a better working life for everyone, and we support trade unions to grow and thrive.
The TUC and our affiliated unions believe that, wherever possible, it is preferable to resolve employment disputes at work, using internal workplace procedures. Unions play a vital role ensuring that employment rights are respected and upheld, by:
The TUC estimates that unions organise around 130,000 union representatives. Union reps have unique workplace insights and experience of common workplace issues, including non-compliance with basic workplace rights. Union reps represent members on an individual and collective basis, negotiating with employers to resolve workplace issues. Union reps also play an invaluable role in the workplace by making sure that people are informed about their employment rights.
Twenty-six per cent of the workforce is covered by a collective agreement that has been negotiated by a trade union.[1] These agreements put in place mechanisms to raise and resolve workplace issues.
There are 6.25 million trade union members[2] in the labour market. Union members feed back workplace issues to their union reps, giving unions a first hand, contemporary experience of workplace issues.
Collective bargaining remains the best way to protect and enforce workers' rights. There is a strong correlation between collective bargaining and greater compliance with employment rights. In 2015, only 2.7 per cent of workers covered by a collective agreement reported no paid holiday entitlement, compared with 6.1 per cent of those who were not covered.[3]
Our recommendations and comments are wide ranging because the Director of Labour Market Enforcement has discretion, under Section 2 (d) of the Immigration Act, to make wide recommendations and observations about the labour market enforcement system.
We believe four fundamental reforms are needed to boost the effectiveness of the labour market enforcement system:
The TUC disagrees with this statement.
It’s vital that all workers have recourse to a properly resourced labour market inspectorate to enforce their workplace rights.
Labour standards ultimately succeed or fail on the issue of compliance. An effective enforcement system is essential to ensure compliance. Widespread non-compliance destroys the rights of workers, destabilises the labour market, creates disincentives for law-abiding employers who are undercut by lawbreaking competitors and weakens public respect for the law. There is a strong risk that focussing enforcement on a small number of sectors would result in significant non-compliance across the wider labour market.
The TUC firmly believes that the remit of the enforcement bodies is too narrow and should not be limited further. For example, despite repeated reform commitments by the current government, statutory holiday pay is not enforced by any of the enforcement bodies. And they don’t have sufficient resources to enforce the limited employment rights that fall within their remit. The TUC advocates that the labour market enforcement system should be expanded to cover a broader spectrum of employment rights, across all sectors of the labour market.
There is non-compliance with employment rights across all sectors of the labour market. For example:
Considering the growth of online retail has been faster in the UK than in any other country and the proportion of sales through online retail remains significantly higher than pre-pandemic levels, the TUC sees no compelling reason why this risk has dissipated.
This is only a handful of the examples that unions have flagged up. But they demonstrate that non-compliance with core employment rights is widespread and not confined to the priority sectors listed in statement 1. Employment rights enforcement should be focussed on all sectors of the economy.
The TUC would be happy to facilitate a roundtable meeting between the DLME and union officers to explore some of these issues in more depth.
The TUC agrees with this statement.
There is evidence to show that some workers are at greater risk of exploitation.
Recent TUC research[16] shows that certain groups are disproportionately affected by insecure work. As we’ve discussed above, insecure employment increases the risk of exploitation and workers are less likely to raise complaints about their working conditions.
Our report found that huge swathes of the workforce suffer from the effects of insecure employment. For example:
Insecure work disproportionately affects groups of workers who are already discriminated against in the workplace.
There is also evidence to show that some migrant workers are being failed by the enforcement system. A 2019 joint review carried out by Defra and the Home Office, cited ‘unacceptable’ welfare-related concerns. In August 2022, the Independent Chief Inspector of Borders and Immigration revealed[20] the staggering levels of exploitation and lack of enforcement activity linked to the short-term seasonal worker visa scheme:
“In eight of 19 reports, Home Office compliance officers identified “significant [welfare] issues”. Reports included summaries of interviews in which some workers told compliance officers that they were treated poorly, discriminated against on the basis of nationality, had received incorrect pay, were living in damp, poor-quality and unsafe accommodation, or had been obstructed from accessing healthcare.”
The ICIBI report concluded that: “Overall, the Home Office has not demonstrated that it has the mechanisms or capabilities in place to assure itself that scheme operators are meeting compliance requirements. When serious concerns have been raised by workers themselves, it did not act promptly or seriously.”
This exploitation is well publicised, backed up by worker surveys commissioned by government departments and confirmed multiple recent articles[21] from an investigative journalist.
Robust evidence of exploitation and unlawful practices exist already. It should be acted upon.
The TUC agrees with this statement.
The fissuring of the employment relationship often means that a worker is supplied, sourced or employed by a labour market intermediary that they will not actually be working for.
For example, many workers are forced to sign up to use umbrella services as a condition of receiving an assignment. Workers will be told this at short notice and it is not realistic for them to check the relevant paperwork or conduct due diligence on the umbrella company. Often the contract obliges them to agree to unlawful or extremely unfair deductions from pay. The TUC has heard directly from workers that umbrellas force them to sign up to deductions from their pay relating to rewards schemes and insurance schemes which don’t exist.
Unions report that this ‘onboarding’ process can take place entirely online.
We are also aware that offshore recruitment is being used to source workers to fill vital labour market shortages – both in the care and agricultural sectors. It’s been extensively reported that some workers are charged extortionate recruitment fees leaving them in serious debt.
Again, many of these workers will never meet the organisations that they will be working for, prior to arriving in the UK. The outsourcing of the employment relationship leads to a lack of accountability and enables labour market intermediaries further down the supply chain to exploit workers.
We’d encourage the DLME to return to recommendations that were made in the 2018/19 strategy[22] where the previous DLME said: “To help ensure compliance throughout supply chains, joint responsibility measures should be introduced where the brand name (at the top of the chain) bears joint responsibility for any non-compliance found further down its own supply chain. Where non-compliance is found, follow-up action by enforcement agencies in conjunction with the brand name and supplier would be undertaken in private to provide an opportunity to correct the infringements within a given timeframe. Failure to correct could result in public naming of both the brand name and supplier”.
The TUC agrees with this statement.
In some sectors, workers on short-term exploitative visas are used to plug labour shortages. We’ve set out above the exploitative conditions faced by workers on short term visas. Far from improving, conditions are deteriorating in some sectors where there are labour market shortages. This is because of the widespread non-compliance with labour standards and a lack of enforcement activity that are synonymous with short term exploitative visas.
Independent analysis from the Migration Advisory Committee confirms[23] that “pay growth in the most exposed sectors has been relatively weak – at least compared to the trend across the labour market – with only administration offering stronger pay growth compared to the average.” The MAC report identifies agriculture, logistics, manufacturing and hospitality as areas with weak pay growth compared to the general trend across the labour market. These are sectors with labour market shortages. A lack of pay growth in these sectors is indicative that shortages are not leading to an improvement in terms and conditions.
Analysis[24] carried out by the TUC economics team reinforces this: “There is therefore very little evidence that pay is rising as a result of labour shortages. To the extent activity is being held back by a lack of workers, firms are not stepping up to increase pay. Overall, the message is that the strength of the recovery is exaggerated. There is no market led pay utopia here. It may even be that firms are using higher vacancies to try and source cheaper workers rather than increasing pay for existing workers.”
The TUC disagrees with this statement.
In 2019 The Times newspaper[25] reported that four out of five Britons are unaware of employment rights. A survey of 2,000 people discovered a “widespread lack of knowledge and understanding” of employment rights.
The Resolution Foundation found that “workers’ awareness of the various bodies is extremely low (just 6 per cent of private sector employees said they would approach an enforcement body in the event their rights were violated, for example)”.[26]
For some workers there are no feasible enforcement routes available to them. Undocumented workers are deterred from reporting labour exploitation because they fear being referred to immigration enforcement which could result in them being deported. Low paid agency workers cannot raise complaints about unlawful umbrella company practices with enforcement bodies as this does not fall within their remit. And seasonal workers have been totally failed by the labour market enforcement system and the relevant government departments, as demonstrated in the ICIBI report we refer to above. Furthermore, given the lengthy delays with the employment tribunal system[27] it is not realistic to expect seasonal workers to bring an employment tribunal claim as they are only in the country for periods of up to 6 months.
The TUC disagrees with this statement.
We believe the examples of non-compliance with labour rights that we’ve flagged throughout this response demonstrate that bad employers are acting with impunity and are free to exploit workers and undercut employers who do comply with employment law.
The TUC acknowledges that there are some good working relationships between some of the enforcement bodies and unions. EAS has worked with NASUWT and BFAWU welcomed the awareness raising events it hosted with the NMW enforcement team.
NASUWT has developed a good working relationship with colleagues at the EAS. This has included attendance and presentation at a number of NASUWT events in order to educate supply teachers about number of issues relating to working through a recruitment agency, including the importance of the Conduct of Employment Businesses Regulations (2003) Regulations, the Key Information Document, and the role of umbrella companies.
This has proved beneficial and alerted a number of supply teachers about the role of the EAS and how to pursue a case.
However, NASUWT has flagged up that despite such positive interactions, the evidence provided throughout this call for evidence suggests that there are a number of workers who do not have the confidence that their cases are being dealt with proactively.
The TUC disagrees with this statement.
We believe the examples of non-compliance with labour rights that we’ve flagged throughout this response demonstrate that bad employers are acting with impunity and are free to exploit workers and undercut employers who do comply with employment law.
The TUC disagrees with this statement.
The TUC believes that enforcement penalties should punish those employers who breach the law and provide a robust deterrent to prevent future non-compliance.
We agree with recommendations from the DLME in previous years, made by, Professor Sir David Metcalf, who called for much larger penalties.
He noted that an employer in the UK was likely to be inspected by one of its three enforcement bodies on average only once every 500 years. Sir David Metcalf then went on to note that, ‘If you . . . have not got the resources . . . then you need heavier penalties.’[28]
Looking at the EAS enforcement activity between 2021-2022[29], the TUC does not believe that 2 prosecutions, 3 prohibitions and 1 LMEO is a proportionate enforcement response to the widespread exploitation and flouting of employment law in the agency sector. Increasing sanctions could create an effective deterrent.
The TUC disagrees with this statement.
The responses we’ve given throughout this submission demonstrate that we think the labour market enforcement system is failing a large number of workers, particularly insecure and migrant workers.
The TUC disagrees with this statement.
We believe the examples of non-compliance with labour rights that we’ve flagged throughout this response demonstrate that bad employers are acting with impunity and are free to exploit workers and undercut employers who do comply with employment law.
The TUC believes more information should be shared with stakeholders about joint operations and the outcomes they deliver for workers.
The TUC has concerns about cross-government working, specifically where information is passed to immigration enforcement from the enforcement rights teams and where they carry out joint operations together.
There is much evidence to show that close working between immigration enforcement and employment rights enforcement bodies deters vulnerable migrant workers from making complaints about their working conditions, and effectively prevents them from accessing justice.
The TUC believes there should be a firewall between immigration enforcement and enforcement bodies.
The TUC agrees with this statement.
The TUC would like to signpost the UNISON submission, and previous submissions, where it has repeatedly flagged up non-compliance with regulations relating to workers’ payslips in the social care sector. This is a longstanding problem in the social care sector.
USDAW has also flagged that access to payslips is one of a growing number of issues it is coming across concerning pay and payroll. Payroll functions are increasingly being outsourced. These systems then malfunctioning has led to the short-term underpayment of wages in several large companies it has members in, causing workers significant hardship.[35][36]
The TUC disagrees with this statement.
There are extremely high levels of non-compliance with the legal requirement to provide a Key Information Document to agency workers, in the education sector. A NASUWT survey[37] revealed that in England only 34 per cent of supply teachers who obtained work through a new supply agency reported that they had been provided with a KID detailing how they would be paid and associated deductions, as well as other key details. In Wales the figure is 35 per cent.
A large-scale survey[38] carried out by IR35 Shield also reveals similar levels of non-compliance with KID requirements. In November 2021 it carried out a survey of 3,750 contractors and found that:
These are not new findings and have previously been shared with the DLME. Trade unions would welcome further information about what the DLME and EAS are doing with the evidence that has already been submitted. The TUC believes that EAS should be undertaking proactive investigations to tackle this non-compliance.
The TUC agrees with this statement.
The issue of employment status has long been a problem for workers and their employers. The current rules on status are complex and confusing. The current uncertainty means that individuals can miss out on their rights at work. It is also all too easy for employers to devise sham arrangements so as to deprive workers of their rights. It is not uncommon for unscrupulous employers to tell zero hours contract workers and agency workers that they have no rights – even though the legal reality may be very different. Employers also seek to avoid their employment and tax obligations by misclassifying staff as self-employed. In recent years, the issue of the employment status has become more complex, with the growth in zero hours working, agency worker and platform working. Thanks to several union-backed cases, the courts and tribunals have rightly concluded that staff employed in the gig economy have many of the features of standard employment relationships and are therefore entitled to rights. These developments are welcome. But this does not mean that the issue of status is finally resolved. The problems relating to employment status are also not limited to the so-called gig economy but can be found across more traditional workplaces and sectors. The current three-tier approach to employment rights means those in insecure work, who are most in need of protection, are the very people who miss out key workplace rights, because they don’t qualify as employees. As a result, they can be hired and fired at will. They miss out on parental rights so find it difficult to balance work and family life and are not entitled to redundancy pay if work dries up.
The TUC agrees with this statement.
We’ve addressed the issues faced by migrant workers above.
In addition to the above, RMT has flagged up that migrant seafarers, who are often exploited and on extremely poor terms and conditions, can be effectively barred from accessing support from enforcement bodies, as when they are docked they are denied ‘shore access’ meaning there is no way they can seek assistance from the authorities.
We echo concerns raised by the RMT union about the weakness of the new enforcement arrangements created under the new Seafarers Wages Act, introduced by the Government in response to the flagrant illegality of P&O Ferries’ mass dismissal of UK seafarers.
[1] (2019). “A stronger voice for workers”. TUC.
[2] (29 June 2023). “Trade unions: Members and relations with the government”. House of Lords Library.
[3] (2021). “TUC action plan to reform labour market enforcement”. TUC.
[4] (November 2022). “Written evidence submitted by the Labour Exploitation Advisory Group (POP0024)”.
[5] Trades Union Congress (TUC) (22 July 2019). “2 million workers not getting legal holiday entitlement, warns TUC”. TUC.
[6] HM Treasury (June 2023). Tackling non-compliance in the umbrella company market. HMT.
[7] (2023). “Annual Supply Teacher Survey (England)”. NASUWT.
[8](July 2022). “Compliance and enforcement of the National Minimum Wage: the case of the Leicester textiles sector”. Low Pay Comission.
[9] Butler, S. (13 June 2022). “Poor working conditions persist in Leicester garment factories, finds survey”. The Guardian.
[10] (22 November 2022). “Inside the Boohoo warehouse where workers call themselves slaves”. The Times.
[11] Stokel-Walker, C. (14 August 2022). “‘A sweatshop in the UK’: how the cost of living crisis triggered walkouts at Amazon”. The Guardian.
[12]Laville, S. (16 May 2019). “Boohoo refuses to let union talk to workers about representation”. The Guardian.
[13] BBC News (30 September 2022). “P&O Ferries admits Dover chef's unfair dismissal”. BBC News.
[14] University of Bristol (13 May 2023). “Research reveals majority of gig economy workers are earning below minimum wage”. University of Bristol.
[15] CWU (31 March 2022). “Levelling Up” the Parcels Delivery Market, CWU.
[16] Trades Union Congress (August 2023). Insecure work in 2023, TUC
[17] (18 August 2015). “Bogus self-employment costing millions to workers and Government”. Citizens Advice Bureau.
[18] Navani, A; Florisson, R; Wilkes, M. (June 2023). The disability gap: Insecure work in the UK. The Work Foundation
[19] Gable, O; Florisson, R. (July 2023). Limiting choices: why people risk insecure work. The Work Foundation (Research partner: UNISON).
[20] Neal, D. (May – August 2022). “An inspection of the immigration system as it relates to the agricultural sector”. Independent Chief Inspector of Borders and Immigration.
[21] See the work of Mellino, E. The Bureau of Investigative Journalism.
[22]Metcalf, D. (May 2018). United Kingdom Labour Market Enforcement Strategy 2018/19, HM Government.
[23] Migration Advisory Committee (December 2022). MAC Annual Report. The Migration Advisory Committee.
[24] Trades UnionCongress (October 2021). Jobs and recovery monitor. TUC
[25] The Times (7 October 2019). “80% of workers ignorant of legal rights”. The Times
[26] Judge, L; Slaughter, H. (April 2023). Enforce for good. Resolution Foundation.
[27] Machell, M. (24 August 2023). “Employment tribunal delays increase 60% since 2010”. HR Magazine.
[28] O’Connor, S. (28 December 2017). “Bigger fines urged for employers who underpay staff”. Financial Times
[29] Department for Business and Trade (26 June 2023). Employment Agency Standards (EAS) Inspectorate: annual report, 2021 to 2022. Department for Business and Trade.
[30] Labour Exploitation Advisory Group (November 2022). Written evidence submitted by the Labour Exploitation Advisory Group (POP0024).
[31] Birks, & Gardner. (2019). “Introducing the Slave Next Door.” Anti-trafficking Review.
[32] Home Office (15 December 2021). “Review of data sharing: migrant victims and witnesses of crime”. Home Office.
[33] “PREVENTING AND ADDRESSING ABUSE AND EXPLOITATION”. Flex, LAWRS & Trust for London.
[34] Matthew Taylor CBE, UK Director of Labour Market Enforcement (2019-2021)
[35] Jolly, J. (17 July 2022). “Next apologises to staff after IT problems cause months of underpaying”. The Guardian.
[36] Wood, Z. (15 July 2022). “Asda employees ‘skipping meals’ due to monthly payroll errors”. The Guardian.
[37] Ibid.
[38] IR35 Shield (January 2022). Ir35 Impact Survey 3,750 Contractors, IR35 Shield
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