A single status of ‘worker’ for all but the genuinely self-employed should be created, says the Labour Party.
The party today announced a proposal for a single status of worker to replace three existing employment categories – employee, worker and dependent contractor (ie not genuinely self employed) – and would effectively end insecure gig economy employment.
We need a new deal for working people. Labour would ensure that all work balances the flexibility workers want with the security they deserve” – Andy McDonald MP
It would remove qualifying periods for basic rights and protections to give workers day one rights in the job.
All workers would receive rights and protections including statutory sick pay (SSP), national minimum wage entitlement, holiday pay, paid parental leave, and protection against unfair dismissal.
Alongside Labour’s pre-existing commitment to extend SSP to the self-employed, this would make 6.1 million additional working people eligible to claim SSP.
The party said that its proposal would put an end to myriad legal cases over workers’ rights involving companies in the gig economy, such as Uber and Deliveroo.
Gig economy cases
Andy McDonald MP, Labour’s shadow employment rights and protections secretary, said frontline workers who had kept the UK going during the Covid-19 crisis would benefit from the plan. He 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.”
Labour leader Keir Starmer will be launching a series of proposals under the party’s “new deal for working people” this week.
This is likely to include a minimum wage of at least £10 an hour, a guarantee of work or training for young people and a buy-British approach, designed to use government procurement to support employment.
As he announced the programme, Starmer – highlighting the fact that his mother was a nurse and his father a toolmaker – said that as the economy emerged from the Covid crisis a new suite of policies was essential.
He said: “It often feels remote when politicians talk about this thing called the economy, but our economy is just the sum total of the work of the British people. If we create good work for everyone, we will all benefit. With Labour, we can make Britain the best place to work.”
Dave Chaplin, CEO of freelancers and contractors’ website ContractorCalculator, welcomed the proposals. He 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 that 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.
“But, we must also protect both parties in situations where they have entered into a relationship of self-employment in good faith. Neither should be able to change their mind later causing costly litigation. Also, the taxman’s IR35 legislation should be abolished to remove the uncertainty in the sector which is currently causing mayhem in the market, and pushing workers into unregulated tax avoidance schemes.
“Governments have been consulting on this topic for a decade, and nothing has yet changed. This is a bold and ambitious policy by Labour, who will first need to get into power.”
Employment status expert reacts to Labour’s proposal for single worker status
Another contractor services firm, Qdos, said granting vulnerable workers employment rights from day one would be a “smart, sensible move”. But, said its chief executive Seb Maley, “proposals like this require careful thought and I urge caution. First and foremost, they must not impair the genuinely self-employed, most of whom do not want employment rights. These people want to retain the freedom that comes with working independently”.
Maley added that tax implications needed to be clarified. “Right now, many gig economy workers, for example, are classed as ‘workers’ but still pay tax as a self-employed person. How this would work if Labour’s proposals materialised remains to be seen and could have major implications, not just for the individual but the companies that engage them.”