Labour has outlined proposals for all workers to be given basic rights to holiday pay and the minimum wage from day one of employment.
Labour has announced its proposals to create a single status of ‘worker’ for all but the genuinely self-employed so that everyone has the same rights from day one of employment.
A single status of ‘worker’ would replace the three existing employment categories and remove qualifying periods for basic rights and protections to give workers day one rights in the job, says Labour.
That means all workers would receive rights and protections including Statutory Sick Pay, National Minimum Wage entitlement, holiday pay, paid parental leave [from Statutory Maternity Pay to Shared Parental Pay] and protection against unfair dismissal.
Statutory Sick Pay would also be extended to the self-employed. Currently, workers must be employed, earn an average of at least £120 a week and have been ill or self-isolating for at least four days in a row to qualify for SSP.
The proposal follows a number of key legal cases on the gig economy where the central dispute was whether the claimant was a worker, and thus entitled to the minimum wage and holiday pay, or self-employed.
Andy McDonald MP, Labour’s Shadow Employment Rights and Protections Secretary, said: “Millions of workers are in insecure employment with low pay and few rights and protections, particularly key workers whose efforts got the country through the pandemic.
“A lack of basic rights and protections forces working people into poverty and insecurity. This is terrible for working people, damaging for the economy, and as we have seen throughout the pandemic, devastating for public health.
“We need a new deal for working people. Labour would ensure that all work balances the flexibility workers want with the security they deserve.”
Dave Chaplin, CEO of contracting authority, ContractorCalculator said: “The Labour proposals are admirable and it could finally put a stop to the zero-rights employment models that have emerged in the flexible workforce which are facilitated by quasi-employment models designed to circumvent the need of corporations to give workers their deserved rights.
“At the lower end of the pay scale, vulnerable workers have little, if any, bargaining power and are given a Hobson’s choice to either accept poor working conditions with few rights or get no work at all. This has to stop.”
He added that it is also important to protect those who have entered into a relationship of self-employment in good faith. “Neither should be able to change their mind later causing costly litigation,” he stated. He also called for IR35 tax legislation aimed at tackling disguised employment to be abolished given the uncertainty it is creating and claimed it is pushing workers into unregulated tax avoidance schemes.
However, IPSE (the Association of Independent Professionals and the Self-Employed) says the proposals “fail to grasp the nettle of employment status”.
It warns that without clearly defining what distinguishes “false” from “genuine” self-employment, the proposals risk “seriously undermining” the 4.2 million-strong self-employed sector.
Instead of attempting to roll all statuses into one, IPSE has previously proposed writing a statutory definition of self-employment into law which it says would give falsely self-employed people much-needed rights while also protecting the freedom of the genuinely self-employed.