“The Government must move on from the Employment Rights Act to deliver further improvements to workers’ rights and trade union rights.”
By Jeff Slee
A helpful first step
The Government must move on from the Employment Rights Act to deliver further improvements to workers’ rights and trade union rights, and to carry out the promises made in Labour’s New Deal for Working People: Making Work Pay agreement between Labour leaders and trade unions in 2024 (the New Deal).
The Employment Rights Act is a good first step towards giving more rights to employees and trade unions, and to undoing some of the anti-union and anti-worker laws of previous Tory governments.
But important reforms promised in the Act are still to come. The National Policy Forum Annual Report 2026 is right to reiterate “the importance of the Government implementing the manifesto commitment to implement the New Deal for Working People in full.” And “in full” needs the Government to bring in a second Employment Rights Bill which creates a single status of worker, gives Ministers the power to enforce sectoral collective bargaining in sectors of the economy, and brings our laws into compliance with international standards.
As the affiliated unions said in May, “Labour must also deliver the rebalancing of power in the workplace promised in the New Deal in full, without any carve-outs or loopholes.”
For a single status of worker
Millions of workers will not benefit from the rights in the Employment Rights Act, and don’t have other employment rights, because they are not technically employees. These workers include many of the 900,000 agency workers in the UK; 31,000 Uber drivers in the UK; Deliveroo workers; and many other taxi drivers and delivery staff; and those in bogus self-employment in sectors such as construction and in the gig economy, where rogue employers deliberately draft contract documentation to exclude or minimise employment rights.
These workers are also often in insecure jobs, on lower pay than employees, on zero-hour contracts, and with no guarantee of hours or income. This obviously makes life hard for those workers and their families. It also makes it attractive for companies to take on workers without giving them the status of employees. By doing so, these businesses can cut their wage costs, avoid employer National Insurance contributions, maintain more control over hiring and firing and hours of work, and undercut their competitors.
Time to do something about it
Margaret Beels, the Director of Labour Market Enforcement at the Department for Business and Trade, told the House of Commons Business and Trade Select Committee considering the Employment Rights Bill that: “We are getting more and more workers who are being shuffled into what are deemed to be self-employment situations, which I do not believe are appropriate for self-employment.” She said that “the whole business of employment status needs to be addressed”, adding that “you can probably consult until the cows come home on this issue… it is about time to do something about it.”
The Select Committee, in its report on the Employment Rights Bill on 3rd March 2025, agreed. It said: “Status of worker does not feature in the Employment Rights Bill, although the Government has committed to a consultation on the issue. The Government has told us that it sees these reforms as a longer-term goal. However, if reforms to employment status are delayed, lawyers and unions have warned that businesses could sidestep 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.”
The Government must address this by legislating for a single status of worker to include all except the genuinely self-employed, as was promised in the New Deal.
Sectoral collective bargaining
The Government must also legislate to give Ministers the power to enforce sectoral collective bargaining in sectors of the economy. Sectoral collective bargaining means that unions and employers in those sectors meet together to set minimum standards which are binding on all companies in that sector. It prevents bad employers from undercutting their competitors by paying lower wages or giving worse conditions of employment, a practice which leads to a downward spiral in which all workers suffer.
This would benefit workers in, for example, areas of employment such as cleaning and security work. Both these areas are dominated by a small group of companies who compete with each other for contracts – from government and public bodies and businesses – on the basis of doing the work more cheaply by giving their workers lower pay and worse conditions. Sectoral collective bargaining would give more protection to workers and mean that companies would have to compete on the basis of how good a service they can provide, not on how low they can drive pay and conditions for their workers.
The Government could easily move to genuine sectoral collective bargaining with its own employees, the Civil Service. There are currently around 200 sets of negotiations covering different areas of the Civil Service, and the Government should lead by example by introducing a single bargaining forum covering the entire Civil Service.
Ending outsourcing
Labour’s New Deal also promised to “bring about the biggest wave of insourcing of public services in a generation.” What has happened to this?
International standards on the right to strike
The New Deal also promised that “The laws regulating industrial action should ensure that UK law complies in every respect with the international obligations ratified by the UK, including those of the International Labour Organisation (ILO) and the European Social Charter.” Labour has always called for the UK to stick to our international obligations, to international laws and the treaties we have signed up to.
But the legal restrictions on the right to strike, banning solidarity and sympathy action, still in force from the Thatcher legislation of the 1980s, are not compliant with conventions of the ILO relating to freedom of association, or with the European Social Charter. The Government must come into line with ILO conventions by restoring the right of unions and workers to engage in solidarity industrial action.
A Second Employment Rights Bill
Labour must now move forward from the Employment Rights Act by introducing a second Employment Rights Bill to Parliament. This Bill should include measures to carry out the commitments made in the New Deal, including a single status of worker, sectoral collective bargaining, and the right to take solidarity and sympathy industrial action.
- 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.
- This article is from CLPD’s annual briefing, which you can read here.
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