Business Secretary Vince Cable has today (6 October 2014) launched a wide-ranging employment review to help clarify and potentially strengthen the employment status of up to a million British workers.
This follows the recent review and upcoming legislation of zero hours contracts, which revealed that an increasing number of people in the UK who could be on ‘worker’ employment contracts which have fewer basic rights (such as unfair dismissal or maternity pay) than the vast majority of people who are on ‘employee’ contracts.
In many instances workers are not aware of their employment status and therefore what employment rights they are entitled to. Many employers are also unsure what rights their workforce is entitled to, running the risk of legal challenge if they get something wrong. As a result, government is also unable to collect meaningful data and get a complete picture of the overall workforce.
Officials at the Department for Business, Innovation and Skills will today start the process of determining how clear the current employment framework is, what the options are to extend some employment rights to more people and whether there is scope to streamline this very complex area of employment law, thus simplifying and clarifying rights for both employers and employees.
Business Secretary Vince Cable said:
“One of the most striking features of our recession has been the high levels of employment that our workforce has maintained during some very trying times. Employers were resourceful in the jobs they continued to offer and employees remained flexible in the work patterns and pay they agreed to. That was the right thing to do at the time to keep Britain working.
“However now the economy is firmly on the road to recovery, it is important that the fruits of the recovery are shared by all. Some types of contracts which offer fewer employment rights, and which were never designed to be widely used, have become much more commonplace. As the economy recovers, it is right to explore giving a silent minority of workers the security and rights enjoyed by the majority of employees. Confident, secure employees spend money, which is ultimately good for UK plc.
“Workers should not be finding out that they are not protected by law once they get to employment tribunal. We need a system that is fair, simple and transparent – an environment where businesses feel more confident knowing what type of contracts to hire staff on and where individuals know their rights and have the security they deserve.”
Currently, many individuals cannot be certain what their employment status is until they are at an employment tribunal. If they are a ‘worker’, it is at this point they could realise they do not have any legal protection if, for example, they are seeking a claim for unfair dismissal.
The government wants to prevent this from happening where possible, so both the individual and employer are clear at the time of recruitment what rights are available. This should also encourage workers and employers to discuss problems instead of heading to the tribunals.
Officials expect to present interim findings by the end of the year, and hope to submit recommendations for next steps to ministers by March 2015.
Responding to the announcement from the Business Secretary Vince Cable, TUC General Secretary Frances O’Grady said:
“The TUC has been calling for a review of bogus self-employment and the abuse of employment contracts for many years. This review is welcome, if long overdue, but it will need teeth to crack down on the widespread abuse of many vulnerable workers and achieve real reform.”