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New workplace reforms will better protect gig economy workers, says government

17 Dec 2018 By Maggie Baska

But experts warn that new legislation is not a ‘silver bullet’ for improving job quality

Gig economy workers, agency employees and zero-hour contract workers are to be better protected by new workplace reforms, the government says.

The legislation, introduced today, means staff must be informed of their rights from their first day of work, including eligibility for paid and sick leave. Workers must also be given the right to request predictable hours. 

The reform takes forward a majority of the recommendations made in the Taylor Review of Modern Working Practices. This includes closing the ‘Swedish derogation’ loophole which allowed agency staff to be paid less than permanent employees. 

The government said the new legislation will “ensure workers can access fair and decent work” and provide businesses with “greater clarity on their obligations”.

Business secretary Greg Clark (pictured above) said these reforms were key to building a labour market that rewards people for hard work, celebrates good employers and boosts productivity and earning potential across the UK.

Neil Carberry, chief executive of the Recruitment and Employment Confederation (REC), said recruiters will “welcome the acknowledgement that temporary and agency work” is a key part of the UK jobs market. 

“Now that government has decided to remove Swedish derogation, it is essential that ministers engage with the recruitment sector to ensure that the transition away from this model is smooth for workers, agencies and clients,” said Carberry.

But many industry leaders have criticised the reforms, saying they do not address underlying issues which face workers. Prisca Bradley, director and head of employment at Hedges Law, said the reforms “go some way to addressing the imbalances [faced by agency workers] but not far enough”. 

“The new reforms however do not go as far as banning zero-hours contracts which was debated during consultation,” Bradley said. “Given that the tribunal system is already creaking under the strain of a huge increase in claims since the abolition of fees, the government could have been more robust to stem likely further litigation in this area.”

However, the government agreed with the Taylor review that completely banning zero-hour contracts “would negatively impact more people than it helped”. 

It also said that platform-based working – including for the likes of Uber or Deliveroo – offered “genuine two-way flexibility” for firms and workers, and can “provide opportunities for those who may not be able to work in more conventional ways”.

Frances O’Grady, general secretary of the TUC, said the right to request guaranteed working hours is “no right at all”.

“Unless unions get the right to organise and bargain for workers in places like Uber and Amazon, too many working people will continue to be treated like disposable labour,” she added.

Peter Cheese, chief executive of the CIPD, added that it was positive to see the government recognised how gig economy and zero-hours contracts can help people into work, but said simply “changing regulation will not be a silver bullet for improving job quality more broadly”. 

He called on businesses to take responsibility for improving the quality of work by investing in how they manage and develop people to ensure all workers have the “opportunity to reach their potential at work”. 

A recent report by The Resolution Foundation found many agency workers did not know “key facts” about their jobs and were missing out on their legal entitlements. The report suggested that a “complex legal jigsaw” meant firms could “contract agency workers in a bewildering variety of ways” with different implications for pay and entitlements. 

The report revealed a lack of information about entitlements – and some cases intentional obstruction – led to agency workers missed out on approximately £290m in 2017 because of the Swedish derogation loophole alone. Agency workers also missed out on an estimated £500m a year in lost holiday pay.

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