“The Government should see the Act as the start of a process of improving workers’ employment rights, not the end.”
CLPD Executive member Jeff Slee outlines key features of the new Employment Rights Act and the commitments Labour still needs to address.
The Employment Rights Bill should become law this Autumn. It’s a good step forward and will put into law some – but by no means all – of the commitments agreed between the Party leadership and our affiliated unions in ‘Labour’s New Deal for Working People’ of May 2024. It will undo some of the anti-union legislation the Tories brought in between 2010-24, and give improved rights to workers, workplace representatives, and unions.
But will it really “transform ordinary working people’s lives” as the New Deal document promised? This will depend on consultations to be held, and the regulations and secondary legislation to be introduced, following the passing of the Act. Full implementation of the Act will take two years, as the Government announced in July. And the Government should beware giving too much to employers who will be lobbying vigorously on these.
And it will depend on whether the government presses ahead with three key New Deal commitments which are not in the Act: single status of worker; sectoral collective bargaining; and reversing outsourcing. The Government should see the Act as the start of a process of improving workers’ employment rights, not the end: we need a second Employment Rights Bill to follow this.
Workers need more rights
For many workers, life got harder under the Tory government. Real wages were no higher in 2024 than before the financial crash of 2008. The changing nature of work has put many more workers in uncertain, insecure employment, including zero-hours contracts with no guarantee of hours or income. And bad employers have used the weakness of employment rights to mistreat their staff. For example, in 2022, P&O got away with sacking 800 staff without notice and replacing them with cheaper foreign workers.
Another example is the GMB campaign to defend Amazon UK’s 60,000 workers, who suffer gruelling conditions, unrealistic productivity targets, surveillance, and bogus self-employment. And who are paid pennies above the minimum wage for this. During the pandemic, Amazon brazenly disregarded social distancing and hygiene rules. And Amazon used legal but dirty tactics at their Coventry warehouse to defeat the GMB’s call for recognition and the right to negotiate over pay and working conditions. On the eve of a planned ballot for recognition, it hired 1300 new workers who voted against it; it forced workers to attend hour-long anti-union seminars; and it bullied its union representatives.
Single status of the worker
When the Bill becomes law, the 5m workers in the gig economy, 1m workers on zero-hour contracts, and the 900,000 agency workers, will still not have full employment rights, because they are not classed as “employees”. According to the Labour Research Department (which is separate from the Labour Party): “There are many examples of sham self-employment, especially in sectors such as construction and in the gig economy, where rogue employers deliberately draft contract documentation to exclude or minimise employment rights.”
The government must commit itself to bringing forward legislation soon, to create a ‘single worker status’ which gives full employment rights to every worker except the genuinely self-employed.
The New Deal agreement promised this. It said: “We will move towards a single status of worker and… consult in detail on a simpler framework that differentiates between workers and the genuinely self-employed.”
The House of Commons Business and Trade Select Committee reported that “Status of worker does not feature in the Employment Rights Bill… if reforms to employment status are delayed, lawyers and unions have warned that businesses could side step the Employment Rights Bill by hiring staff as self-employed contractors, temps, or agency workers. This would mean those workers would not be entitled to the reforms laid out in the Bill.” And “While the Committee welcomes the Government’s plans to reform worker status and bogus self-employment, it must proceed at pace to turn ambition into action.”
But the government has been vague about how urgently it will deal with this. Unless the government legislates for single status, employers will still be able to get around employee rights in the Act, to keep control over hiring and firing and hours of work, cut wage costs, avoid employer National Insurance contributions, and to undercut their competitors.
Sectoral collective bargaining
Sectoral collective bargaining prevents employers undercutting their competitors by employing staff on lower wages and worse conditions. Unions and employers across a sector of the economy meet to set minimum standards which are binding on all companies in that sector.
The New Deal promised that the Labour government will “start by establishing a Fair Pay Agreement in Adult Social Care, to drive up pay and conditions” and “also assess how and to what extent Fair Pay Agreements could benefit other sectors and tackle labour market challenges. Fair Pay Agreements will be negotiated through sectoral collective bargaining… [and] would cover a wide range of issues including… pay and pensions, working time and holidays, training, work organisation, diversity and inclusion, health and safety, and the deployment of new technologies.”
It’s to be welcomed that the Act does introduce Negotiating Bodies, including employers and unions for adult social care staff and for school support staff. But it’s disappointing that neither of these are really sectoral collective bargaining. In its briefing on the Bill, The Institute of Employment Rights said: “What the Bill is proposing is a form of pay determination, but not pay determination by collective bargaining as that is normally understood.”
The government must turn the Negotiating Bodies into genuine collective bargaining forums. And then extend sectoral collective bargaining to other sectors of the economy.
Outsourcing vs insourcing
The New Deal said that: “Labour will end the presumption in favour of outsourcing and oversee the biggest wave of insourcing of public services for a generation”.
Public sector workers whose work has been outsourced can now be protected from worsening pay and conditions, subject to ministers imposing regulations to do so. But we’ve yet to see any move towards insourcing, the return to the public sector of work which has already been outsourced.
Tougher legislation is needed
There are also parts of the Act which remain open to abuse. For example, while the Act gives unions the Right of Access to workplaces, employers will be able to delay and frustrate this right, and to prevent access altogether by paying a fine – which the Act does not specify.
We must campaign for further improvements to employment rights, and support the Labour MPs and trade unions who have called for a second Employment Rights Bill to be introduced soon to legislate for at least those areas of the New Deal for Working People which have not been included in the current Employment Rights Bill.
- This article is from CLPD’s annual briefing which you can read here.
- Jeff Slee is a member of Burnley CLP and the CLPD Executive, a retired railworker, and a former member of the RMT’s National Executive Committee.
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