Monarch sets out new government’s first parliamentary agenda, with worker’s rights in the spotlight
In the first signal of intent from the new government, the King’s Speech – which took place last week (Wednesday 17th July) – set out as many as 35 pieces of draft legislation.
For contractors, freelancers and flexible workers across the UK, the proposed bill on worker’s rights was arguably the most relevant proposal, covering a range of measures which the Labour government wants to implement.
As part of its election campaign, Labour promised to deliver the measures contained within the worker’s rights bill within 100 days of taking office. The package was detailed within the party’s ‘New Deal for Working People’, and has been labelled “the biggest upgrade to rights at work for a generation”.
Two key proposals will affect the UK’s flexible workers: the long-awaited introduction of a Single Enforcement Body and the potential introduction of a single ‘worker’ status.
However, the majority of measures covered by the bill relate to specific issues facing permanent employees, rather than the self-employed – raising concerns in some quarters that the Labour government is not yet fully tuned into the unique needs of the sector.
What do these proposals mean in practice?
The Single Enforcement Body has been promised for years as a way of tackling non-compliance with employment laws and regulations.
With enforcement currently overseen by three distinct bodies – HMRC National Minimum Wage Enforcement, the Employment Agency Standards Inspectorate and the Gangmasters and Labour Abuse Authority – experts have been critical, saying that efforts are not always well coordinated.
Similarly, there are gaps in the remit of each of these bodies, none of which is responsible for overseeing compliance in the umbrella sector. Left unregulated, the industry has seen an increase in tax avoidance schemes targeting flexible, who are later chased by HMRC for unpaid taxes.
Industry commentators have said unifying these under a Single Enforcement Body would offer greater protection for these workers, but it is not yet clear whether the government would go further by – for example – introducing regulation to the umbrella sector.
The plans to consult on the introduction of a single ‘worker’ status could also resolve the issues of the UK’s three-tier system of employment statuses. Citing the findings of the Taylor Review, Labour’s ‘New Deal for Working People’ sets out the challenges businesses and individuals face in trying to apply this “complex legal framework”.
The complexity of the current system, Labour believes, “has been used to cut costs and avoid legal responsibilities” by unscrupulous employers, and has made it more difficult for workers and the self-employed to understand their rights and entitlements. A streamlined framework could limit or eradicate these issues.
Changes will ‘drag labour laws into 21st century’
Following Labour’s landslide election win, IPSE’s policy director, Andy Chamberlain, said the party had “recognised the urgent need to drag our labour laws into the 21st century”.
The new government’s commitment to addressing “outdated employment laws” would help to protect the rights of workers, and offer greater clarity around what constitutes genuine self-employment, Chamberlain suggested.
This is a further example of government avoiding the real issues around the legal status of the self employed and in particular the limited company contractor. Every day I am contacted or see advertised positions with a fixed task and term. These are jobs that should be open to limited company contractors but over and over again they are deemed ‘Inside IR35’ and when asked why, the companies in question have no answer other than ‘it’s company policy’. They are prepared to pay 30% more and see the contractor received 30% less to stay ‘inside’. This abuse of the off payroll regulations is rife throughout industry and is allowed because the extra money goes to HMRC and the companies seem to like the slave type position it puts the contractor (no rights, no limits). I thought ISPE was created to fight this state of affairs, but as it ‘Reports’ the latest HMRC / Government abuse of Limited Company contractors the situation gets worse and has been getting progressively worse for over twenty years. It is clear that the British government and HMRC do not wish this country to prosper if that prosperity is based on individuals being in business, they are only interested in the corporations and large business prosperity with increased control over the rest of us.
I wonder if there are any plans to level the playing field with PAYE taxed IR35 contractors unable to claim any employee benefits such as expenses etc
This is a terrible move. It will take the UK closer to the EU methods. Workers will have to register for everything. Limit the times they can work, unless they have written approval from a government body.
More control and regulation, less flexibility.
There are better ways to stop the abuse of workers