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The UK government should toughen its reforms to workers’ rights to ensure “rogue employers” cannot exploit loopholes in the legislation, a cross-party committee of MPs said on Monday.
The current package, because it leaves key details to be decided in later regulation, “undermines the certainty that the reforms aim to achieve” and puts parliament “at risk of signing a regulatory blank cheque”, the business and trade committee warned.
Specifically, ministers needed to be more explicit in law about precisely how a ban on exploitative zero-hour contracts would work, and to ensure that all employees qualified for new rights to regular working hours and compensation when shifts were cancelled. There should also be more detail on new rights for unions to organise, it added.
The committee also called for the government to accelerate reforms of workers’ status — a measure intended to prevent bogus self-employment — which is not included in the bill at present, and said clear plans were needed to fund the new Fair Work Agency that will enforce workers’ rights.
Ministers will this week publish amendments to the employment rights bill ahead of the next stage of the parliamentary process.
Business groups have been lobbying hard for changes to soften the impact of the legislation — which encompasses a sweeping set of reforms designed to give workers more security and boost the role of unions.
“We know that business is worried about the rising costs of employment,” said the Labour chair of the committee Liam Byrne. “But we’ve also taken evidence about abuse of workers that has frankly horrified us.”
The committee said it had taken evidence from McDonald’s, as new claims emerged of sexual misconduct in its workforce; had received scores of complaints about poor working practices from couriers at the delivery company Evri; and heard how Frasers Group’s Sports Direct chain had abandoned previous promises to reduce its reliance on agency workers.
The committee’s call for a more stringent approach contrasts with requests from employers, who worry that their warnings of the legislation’s potential costs — coming on top of imminent increases in taxes and the minimum wage — are falling on deaf ears.
Government figures have previously signalled that they plan to make some changes to the bill to address practical concerns — for example, to ensure big employers did not have to continually consult workers on redundancies at different sites if they were unrelated.
But unions are increasingly confident that the substance of the reforms — including the introduction of day one protection against unfair dismissal, a clampdown on the use of “fire and rehire” tactics to downgrade employment contracts, and the inclusion of agency workers in the ban on zero hour contracts — will remain intact.
Lobbyists urged ministers to resist the call to set the measures out in greater detail now.
Matthew Percival, future of work director at the CBI, said businesses wanted “to avoid locking in details . . . that could better be decided by a proper dialogue”, adding that “deferring these details to secondary legislation could create the time to identify compromises”.
Neil Carberry, chief executive of the Recruitment & Employment Confederation, which represents agencies, said the government should “take time to talk and get things right” rather than pressing ahead with a pre-election deal with unions that was “short on detail and long on potential economic damage”.
Evri said it was “proud” to offer its couriers terms of self-employment with “greater protection and benefits”, including pensions, holiday and sick pay, adding that couriers had many ways to raise concerns, which would be investigated.
McDonald’s said it had “undertaken extensive work over the last year to ensure we have industry leading practices in place to support” safety, and that “any incident of misconduct and harassment is unacceptable and subject to rapid and thorough investigation and action”.
Frasers Group declined to comment.
Additional reporting by Anna Gross and Madeleine Speed
