The Institute of Employment Rights has added to voices heard in the House of Lords yesterday that the Employment Rights Bill risks falling short of its promises.
The IER – a think tank supported by academics, lawyers and trade unions – warned that, in its present form, the Bill left workers vulnerable to the very practices it aimed to prevent and would fail to meet the UK’s international commitments on workers’ rights.
The IER argued that the proposals concerning fire and rehire would still allow employers to dismiss and re-engage staff under vaguely defined “likely financial difficulties”, without any requirement for independent verification of those claims.
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Similarly, proposed measures on zero-hours contracts left loopholes that could allow insecure work to continue through bogus self-employment and short-term contracts.
The think tank further warns that, without strong enforcement mechanisms and meaningful penalties, bad employers will treat any fines as a cost of doing business.
Labour economists and legal experts recently issued a public letter backing stronger employment protections, rejecting the business lobby’s claims that the Bill would harm economic growth. On the contrary, they argue, fairer labour laws boost productivity, consumer demand and economic resilience.
Without substantial improvements, the UK risks remaining an international outlier on workers’ rights and falling short of its obligations under International Labour Organization (ILO) and Council of Europe standards.
James Harrison, director of the IER, told Personnel Today that universal worker status needed to be sorted out if ministers were serious about ending abuse by unscrupulous employers. Removing zero hours contracts did not resolve key issues for workers. He said: “There’s nothing to stop an employer saying ‘you’re all self-employed from Monday’.”
Harrison added that there remained major trapdoors in the proposals, such as giving employers the option to fire and rehire if facing predicted financial problems. “Who will decide what constitutes a financial problem?” he said. The IER has demanded that the wording “or were likely in the immediate future to affect” should be removed.
On worker status, the IER said that instead of resolving the question of who should be a “worker” for the purposes of UK labour law, the Bill adds to the complexity arising from the coexistence of several employment statuses (employee, limb-b worker, self-employed), leaving employers free to continue to use legal devices and HR strategies to defeat employment status claims, such as personal service companies, umbrella companies, or broadly worded substitution clauses for
gig work.
It said that to rectify this, all rights contained in the Bill should apply to workers defined as “any individual who is engaged by another to provide labour and is not, in the provision of that labour, genuinely operating a business on his or her own account”.
On zero hours, the IER proposed that employers ought not to be able to avoid the new rules by redefining workers as “low-hours workers”. It warned that the definition of “temporary” needed clarification where employers offer temporary contracts and that workers should have the right to union representation when considering an offer of a guaranteed hours contract.
Harrison said: “International Workers’ Day serves to remind us of the need for greater power distributed to working people, which happens through a trade union movement that is free to organise in workplaces and bargain collectively on behalf of workers.
“The Employment Rights Bill unfortunately doesn’t appear to deliver on the significant promises originally made by the Labour Party’s Plan to Make Work Pay. Unless the legislation is tightened or significantly built upon, it’s future generations of workers who will pay the price.
“Improving workers’ rights in a meaningful way, and making the UK compliant with international labour laws already ratified by Parliament, should not be contentious issues for the UK government.”
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