Written evidence from TUC (WOW0062)

Introduction

The Trades Union Congress (TUC) welcomes the opportunity to contribute to the Committee’s inquiry into the future world of work and the rights of workers. 

The TUC is the voice of Britain at work. We represent nearly six million working people in 52 unions across the economy. We campaign for more and better jobs and a better working life for everyone, and we support trade unions to grow and thrive.

Many unions organise zero-hours contract (ZHCs) workers, agency workers and the self-employed and have campaigned for and negotiated improved working conditions people in precarious forms of employment.

Since the financial crisis, employment levels and numbers have risen significantly. But the world of work has been increasingly characterised firstly by low pay, and secondly, by an increase in insecurity at work – the focus of this inquiry.

•            Pay is still around £20 a week below its pre-crisis levels, and not set to return until those levels until 2021.
•            British workers today have experienced the longest decline in real wages since 1864, and the largest decline in real wages after the financial crisis of any developed economy except Greece. 
•            The TUC estimate that one in ten workers now face insecurity at work, either because they are in low paid self-employment, or employed on a zero hours, agency or casual contract, which means that they risk missing out on key rights and protections at work.

Looking at this insecure workforce in more detail, suggests that:

•            The main increase in insecure work has been in the form of ZHCs, with over 800,000 people now employed on a ZHC,[1] an increase of over 700,000 since a decade ago.
•            There are over 760,000 people in non-standard forms of temporary work, including agency and casual work.
•            1.7m people are in low paid self-employment, where the rewards from this type of work are unlikely to compensate for the reduction in rights and security involved in self-employment.

Employers argue that flexible contracts are good for businesses and provide workers with more choice over the kinds of job they do and when they work.  However, being employed on an insecure contract is not a positive choice for most individuals, it is the only option available to them.  It also appears that some employers use insecure forms of employment as a means of driving down the wages bill, reducing costs by not paying sick pay and pensions and of avoiding employment law and tax liabilities.

UK employment law has also failed to keep pace with recent changes in the labour market. People on insecure contracts often lack the basic rights which enable them to challenge mistreatment in the workplace. 

Insecurity and new technology

In recent months there has been is an increasing and welcome focus in the media and policy debates on the changing world of work, and in particular on how the nature of work is evolving due to the introduction of new technology. These debates normally cover three distinct issues:

•            The impact of new technology on the employment relationship between employers and working people, and whether the use of new technology, such as online platforms, often known as the ‘gig economy’ is a key driver for the growth in insecure work.
•            The impact of technology on working practices, for example, the use of surveillance devices to track workers’ movements and monitor their performance; and
•            The impact of technology on the supply of work, and whether robots will replace humans altogether in the labour market.

Online platforms are increasingly used by employers to recruit labour and outsource tasks and services. Workers also use the platforms to look for work and to undertake job match services.  The TUC believes that in this respect, online platforms are effectively operating as employment businesses / agencies and should be regulated accordingly. As with employment agencies, the key feature of this new type of employment is a change in the relationship between employers and those supplying work, which is often characterised by a shift in risk away from the employer and onto the employee.

We are also increasingly concerned about the wider use of surveillance in the workplace, which affects many workers irrespective of how they are employed. The TUC recognises that developments in new technology can create new employment opportunities and contribute to improved productivity and competitiveness for businesses. However, recent exposés in companies such as Sports Direct, ASOS and Hermes[2] have highlighted how the use of apps and algorithms to allocate work and to monitor work performance can lead to increased work intensification and to increasingly intrusive surveillance of working people. It is also often associated with a culture of bullying and increasingly demeaning working practices.  This can have significant health implications for individuals. 

Addressing insecurity

The TUC is concerned that growth in insecure employment has serious implications for the rights and treatment of working people, for the tax and benefits systems and for the wider economy.  Urgent action is needed to prevent exploitation of working people, to address the fall in tax revenues and to build a sustainable economy in which people are guaranteed decent jobs offering decent pay, decent hours and decent working conditions.

In the coming months, the TUC plans to undertake research and policy work with a view to informing the outcomes of the Taylor Review of employment practices.  Our first report (attached as an appendix) sets uot the extent of insecure wrok in Britain today.   Future work will look further at the the policy recommendations needed to ensure that the increasing number of people employed on an insecure basis do not lose out but can enjoy the same framework of protection and rights as workers employed in other parts of the labour market.  

As we set out in this submission, there are significant changes that the government could make now to individual employment rights that could help improve the lives of those in the insecure workforce. But this must be also accompanied by action to extend union presence and collective bargaining to these workplaces, to enable working people themselves to organise for better pay and conditions. Unions are working hard to improve conditions for workers facing poor terms and conditions– as the recent successes at Sports Direct and Uber show. Enabling better access to workplaces for trade unions would enable us to build on these gains faster, stamping out employment practices that have no place in modern Britain and securing better pay and conditions for those currently in insecure work.

The TUC believes that the government should take action in the following areas:

•            The rules on employment status should be modernised to ensure that all working people, regardless of the nature of their employment relationship, are entitled to the same decent floor of employment rights.
•            Measures should be adopted to ensure that workers in low paid jobs do not lose out on key safeguards when they are unable to work, due to sickness, maternity and paternity leave or in retirement.
•            The government needs to tackle the problems of growth in false-employment which result in a loss of rights and benefits for workers, a loss of revenue for the exchequer and a loss of competitiveness for reputable businesses who are undercut by rogue firms.  The government should also as a matter of urgency review tax rules to clamp down on false self-employment on avoidance schemes which incentivise the use of insecure forms of work. 
•            Policies should be adopted which promote collective bargaining and assist unions to organise in insecure workplaces.
•            The government should use procurement arrangements to end the use of insecure employment, including ZHCs, agency work and false self-employment arrangements in public services.

Responses to Committee Questions

1. Is the term 'worker' defined sufficiently clearly in law at present? If not, how should it be defined?

What should be the status and rights of agency workers, casual workers, and the self-employed (including those working in the 'gig economy'), for the purposes of tax, benefits and employment law?

The rules on status are vital for working people as they determine which employment rights, and income protections they qualify for as well as the basis on which they will be taxed. But the use of different, albeit overlapping, status tests in employment, tax and social security laws can lead to confusing and sometimes unfair outcomes, particular for those in non-standard and insecure jobs.  For example, individuals will be taxed as if they are an employee, but will lose out on core employment rights.  The use of additional eligibility tests, such as qualifying periods for some employment rights, and minimum income thresholds for benefits mean that those in low paid, transient and insecure jobs miss out on family friendly rights, job security measures and protections such as sick pay.

In the longer term, consideration could usefully be given to whether a single status test should be developed for the purposes of employment protection, social security and tax rules. Here however we concentrate on the problems associated with each status test.

Employment law and access to key rights at work

The TUC believes that employment law need to be brought into the 21 century. The rules on employment status have failed to keep pace with changes in the UK labour market.  While the numbers employed in insecure forms of work, including zero hours contracts, agency and casual work have been growing rapidly, much of UK employment law has remained wedded to the notion that a long-term and stable employment relationship is the norm. Those who do not conform to this norm are not protected.

The pyramids below illustrate the range of different rights to which individuals are entitled, varies substantially depending on whether they qualify as an ‘employee’, a ‘worker’ or as ‘self-employed’.  

RIGHTS FOR THE ‘SELF-EMPLOYED’

RIGHTS FOR ‘WORKERS’

RIGHTS FOR ‘EMPLOYEES’

Those who are classified as employees benefit from the fullest range of rights, including family friendly entitlements and job security rights.  Those who are ‘workers qualify for more limited rights, in particular protection for pay and holidays. Whilst those who are self-employed enjoy the fewest protections at work, benefiting only from limited health and safety safeguards and protection from discrimination in some cases.

Recent developments in the labour market mean that growing numbers of working people risk missing out on basic protections in the workplace.  For example, the growth of agency work and casual work, and the increasing use of zero hours contracts, has left many people only able to access the rights associated with ‘worker’ status, rather than the full set of rights that comes with being an ‘employee’.  The TUC is concerned that whilst those in secure forms of employment benefit from a fuller range of employment rights and work-related benefits.  Those in more precarious forms of work who are most in need of protection lose out.

The TUC believes that the rules on employment status excessively complex.  UK employment law currently uses more than 12 different statutory definitions for who qualifies for different employment rights.  Some definitions expressly include or exclude certain categories of workers, such as agency workers or homeworkers,[3] whilst others use different contract tests to determine who is covered.[4] Whilst employment lawyers may benefit, this diverse approach can only create costs, confusion and uncertainty for employers and workers alike. 

The TUC is also concerned that some employers seek to take advantage of the current uncertainties over employment status to evade their employment law responsibilities. It is not uncommon for employers to inform ZHC workers and those labelled as self-employed that are not ‘employees’ and therefore have no rights, even though this is rarely the case in law. Such practices can only be challenged if an individual is willing to take a claim to an employment tribunal. Many, especially the lower paid, are likely to be deterred from doing so due to ET fees and the fear of losing their employment and income. 

But status rules are not the only factor which deprives many individuals of key employment rights. Rules on continuity of employment can also prove an insurmountable barrier for those on insecure contracts.  Due to the intermittent nature of their work, ZHC workers often lack the necessary continuous service with an employer to qualify for rights such as unfair dismissal protections, statutory redundancy pay, and family-friendly protections.  A gap of a week or more between shifts can mean that an individuals’ continuous service is broken and they lose out on core protections.

Employers sometimes argue that flexible contracts help workers to balance work and family life. What they don’t point out is that those on casual contracts often aren’t entitled to basic parental rights the rest of us take for granted – including the right to right to return to their job after maternity, paternity or adoption leave.

Those on insecure jobs are also prevented from having voice at work.  Non-employee workers miss out on the right to be consulted over collective redundancies or TUPE transfers.  They are not entitled to paid time off to act as a union rep and are not protected from dismissal for union membership or activities.

The TUC believes that there is an urgent need to modernise the rules on employment status and to end the ‘two-tier’ approach employment rights.  We believe all workers should benefit from workplace rights and protections, regardless of the nature of their employment relationship.  It should also make no difference of they are offered or allocated work via an agency, an online platform or via an app installed on their smartphone.

We therefore propose that:

•            All workers, including employees, agency workers, casual workers, and freelancers, should be entitled to same floor of statutory employment rights, including:

             The right to a written statement of pay and conditions and a pay slip

             Family friendly rights, including rights to time off for antenatal appointments, maternity and paternity leave and the right to request flexible working practices.

             Job security rights, such as the right to paid notice periods, protection from unfair dismissal and redundancy pay

•            There should be a single definition of ‘worker’ should be used for all statutory employment rights that should cover all economically dependent workers.
•            There should be a statutory presumption that all workers qualify for the full range of employment rights, unless the employer can demonstrate that the individual is genuinely self-employed.

Access to social security and pensions

Several key forms of employment protection, part of the social security system, are dependent on earnings. The lower levels of pay experienced by many of the insecure workforce means that many are also unable to access these rights

•            Nearly 500,000 people on a zero-hours contract or in insecure temporary work do not qualify for Statutory Sick Pay because they earn less than £112 a week, nearly a third of all those in this category.
•            These workers are also excluded from full maternity pay and have no right to paternity pay. While new mothers can claim the Maternity Allowance benefit as an alternative, new fathers in the insecure workforce have no right to financial support enabling them to take time off.
•            There is also no right for these workers to be automatically enrolled into a workplace pension, with their employers making a minimum contribution. 

Many of those on insecure contracts work short hours, and have lower hourly rates of pay than employees. TUC analysis shows that:

•            Self-employed people now earn an average of 60 per cent the rate of an employee per year, down from around 70 per cent a decade ago.
•            Median pay for those on a ZHC in 2016 was worth just 66 per cent of the median for all employees.
•            Median pay for those working for an employment agency was worth just 80 per cent that of the average employee; for those in casual or seasonal work, pay was worth just 60 per cent of the employee average.

The TUC believes that low-paid workers should have equal rights to SSP, paid at the normal rate, or at a rate equivalent to their normal weekly earnings if that is lower. Government should also examine how the lower earnings limit works across the board, with a view to ensuring that low paid workers are not excluded from other key income protections.

We will be investigating this area further in coming months.

Tax

The use of different, albeit overlapping status test in employment and tax rules can result in unfair outcomes.  For example, it is not uncommon for individuals working in the construction sector to be taxed on the basis that they are in employment but to lose out on core employment rights, including the national living wage, holiday pay and protection from unfair dismissal.  In the longer term consideration could be given to aligning the status tests for tax and employment law rules.

However, the TUC believes that in a limited range sectors, in particular in the entertainment sector, it is appropriate for individuals to continue be taxed on a self-employed basis, but to retain employment rights.  Musicians, actors and some film technicians operate on a self-employed basis and are expected to cover business costs such as travel and the requirement to provide expensive equipment.  However, the TUC also believes such workers merit employment rights, in particular, protection from excessive working hours and the right to holiday pay. 

The TUC is seriously concerned by the growth in false self-employment in recent years. Some employers have sought to devise new contractual devise with a view to evading employment law responsibilities.  Examples include the use of substitution clauses, even though individuals in practice undertake work personally and terms requiring individuals to hire or provide equipment needed to undertake work. For example, it is not uncommon for courier firms to require staff to hire vans in order to make deliveries.  The TUC is also concerned that some employers increasing employ staff via intermediaries such as umbrella companies and personal service companies, with a view to avoiding employment law and tax obligations.

We would also call on the government to review tax rules to clamp down on avoidance schemes which incentivise the use of insecure forms of work.  Such schemes lead to a loss of rights and benefits for workers, a loss of revenue for the exchequer and a loss of competitiveness for reputable businesses who are undercut by rogue firms. 

2. For those casual and agency workers working in the 'gig economy', is the balance of benefits between worker and employer appropriate?

The TUC is concerned that the growth in insecure jobs is contributing to a serious imbalance of power in the workplace. Whilst the employer reaps the benefits of flexibility, all the risks and associated insecurities are transferred to the worker.

The advantages for employers in using insecure contracts are clear. Managers can maximise the flexibility of their workforce in order to respond peaks and troughs in demand. They can achieve cost efficiencies by retaining a pool of flexible workers, who are familiar with their business and who can be called on at short notice. Employers also use agencies and false self-employment arrangements to ‘outsource’ or evade employment law obligations and to keep wage costs down. Employers are only required to pay zero–hour contract workers, agency workers and the self-employed for the time they work.

The TUC recognises that a minority of workers are attracted by flexible contracts. For example, nurses may choose to top-up their take home pay by working additional hours through ‘in-house banks’, whilst older workers may welcome the chance to work occasionally whilst also having time to care for grandchildren.

However, there is growing evidence that these forms of work are undertaken on an involuntary basis:

•            Workers on a ZHCs are three times more likely than the general workforce to say that they would like to work more hours (30 per cent compared to 10 per cent).
•            An increasing proportion of those working on temporary contracts are doing so on an involuntary basis: 30 per cent of all of those working in temporary work are doing so on an involuntary basis, up from 25 per cent a decade ago.[5]
•            There is growing concern that people are being encouraged to register as self-employed in order for employers to evade their responsibilities; Citizens Advice estimate that around 500,000 people may be in ‘bogus’ self-employment.

Evidence gathered by the TUC reveals that the problems faced by workers in insecure jobs include:

Income insecurity:  Due to the lack of guaranteed hours those in insecure jobs do not know how much pay they will take home each week, making it very difficult to plan financially or cover household bills. 

Impact on family life:  The need to remain available for work, often at short notice places a strain non families and makes it very difficult to organise childcare or eldercare.  Workers report they miss out on family parties or social events, because they cannot afford to turn down work and the fear that if they refuse a shift they will not be offered future work.

Missing out on training and career development opportunities: Research commissioned by the UK Commission for Employment and Skills[6] confirms that employers are far less likely to pay for training for workers on temporary or zero-hours contracts. Those on flexible contracts often had to fund their own training.

Difficulties accessing benefits:  The variability of individual’s earnings can create difficulties over eligibility for benefits.  Individuals employed on ZHCs or short-hours contracts are also at greater risk of missing out on sick pay when they cannot work due to their low weekly earnings, whilst the self-employed may not be entitled at all to pay when they are too ill to work.

Abuse at work:  Those in precarious employment are more vulnerable to mistreatment and bullying at work.  Individuals have reported:[7]

•            Not being paid in full or on time.
•            Not being paid the minimum wage.
•            Being sent home at the start of or half way through a shift with no pay
•            Losing out on holiday pay or being frightened to ask for time off for fear they will not be offered future work
•            Being refused work because they are pregnant or have recently returned from maternity leave.[8] 

More generally, some new forms of work are seeing an overall transfer of risk from employer to employee.

This is typified by employment practices in many delivery and passenger service companies where employers have sought to label workers as self-employed.  Employers argue that because work is allocated via online platforms, apps or algorithms there is not direct employment relationship between the individual and the employed.

Employers argue that individuals are therefore self-employed and not entitled to holiday pay or to be paid the national minimum wage for each hour worked. Instead they are only entitled to be paid for each completed task. In these firms, individuals are expected to bear the risk that a customer will not be in to receive a parcel delivery or that a passenger is not at an allotted pick-up point, whilst the company incurs not related costs. 

Managers also seek to avoid employment responsibilities by claiming that they do not exercise control over how work is performed.  This is despite the fact that the individual’s performance is constantly monitored online and individuals can be deactivated (the gig-economy word for dismissed) following negative customer feedback, missed targets or where the individuals do not accept enough work.

The recent employment tribunal decision in the Uber case, supported by the GMB, demonstrates that these assumptions can now be challenged. However, as this decision will not be binding in other workplaces, action is still needed to tackle the use of false-employment.  As set out above, the TUC believes there should be a statutory presumption that individuals should qualify for rights, unless that employer can demonstrate that they are genuinely self-employed.

3. What specific provision should there be for the protection and support of agency workers and those who are not employees? Who should be responsible for such provision – the Government, the beneficiary of the work, a mutual, the individual themselves?

The TUC believes that all workers, regardless of their employment relationship or whether they are offered work via an agency, other intermediaries or an online platform or app, should be guaranteed core rights and income protections in the workplace.

The government has a primary responsibility to adopt an effective framework of employment rights and contributory benefits which protects all working people.  The onus for securing access to these rights should not primarily rest with the individuals who are often reluctant to complain for fear they will lose work or face retribution.  Rather the government should invest in effective, practice enforcement systems aimed at improving compliance, preventing bad practice and imposing effective sanctions on employers who breach their employment or tax obligations.  It is particularly important that enforcement agencies have adequate resources to undertake proactive enforcement action, rather than simply responding to complaints.

The government and the public authorities more generally also has a responsibility to act as a good practice employer and should avoid using insecure contracts within public services.  They should also use procurement arrangements to end the use of insecure employment, including ZHCs, agency work and false self-employment arrangements in public services.

Employers also have clear responsibilities not only to adopt good employment practices and treating their own staff with dignity and respect. They should also audit practices within their supply chains with a view to eradicating non-compliance and exploitative practices. As the recent experience of Sports Direct reveals, failure to do so can have negative reputational impacts and affect stock market performance.

Trade unions also play a central role in protecting and improving the working conditions of those in insecure employment.  Unions increasingly organise agency workers, those on zero-hours contracts and the self-employed. In recent months, unions such as Unite, the GMB and Unison have exposed bad working in practices in companies such as Sports Direct, ASOS, and Hermes, and within the social care sector.  Unions are keen to work with employers to end the use of Victorian style working practices and to agree improvements in pay and working conditions.  Entertainment unions including BECTU, Equity and the Musicians Unions provide expert advice and support to self-employed members.

The TUC is also interesting in exploring with unions and others how far the development of worker co-operatives could also provide welcome support and protections for individuals in sectors such as entertainment or passenger service companies.

4. What differences should there be between levels of Government support for the self-employed and for employees, for example over statutory sick pay, holiday pay, employee pensions, maternity pay?

How should those rights be changed, to ensure fair protection for workers at work?

What help should be offered in preparing those people who become self-employed (with, for example, financial, educational and legal advice), and who should be offering such help?

The TUC believes that everyone in employment should be protected when at work and during periods when they are unable to work. 

But it is not just employment rights which have been put at risk by the growth of insecure work and self-employment.  As set out previously, many individuals also lose out on key income protections, during periods of sickness, during maternity and paternity leave and in retirement.

It is well-documented, the growth in insecure work has been accompanied by a growth in low pay.  As a result, many people miss out on benefits such as statutory sick pay, full maternity pay and paternity pay, as well as automatic enrolment into a workplace pension.

The TUC believes that action is needed to improve protections for working people when they are unable to work.  Measures which should be considered include:

•            Giving low-paid workers equal rights to SSP, paid at the normal rate, or at a rate equivalent to their normal weekly earnings if that is lower.
•            Revising statutory paternity pay rules, to ensure fathers receive earnings relating paid
•            Introducing an allowance similar to Maternity Allowance for new fathers, adoptive parents or new parents who opt to take shared parental leave in the first year after birth or adoption.
•            Paying maternity allowance at an equivalent rate for first 6 weeks as earning related rates for SMP.
•            Government should also examine how the lower earnings limit works across the board, with a view to ensuring that low paid workers are not excluded from other key income protections’

The TUC plans to cover the issue of self-employment status and pension entitlement in our submission to the DWP Select Committee.  At this point we would simply express our concern that low-paid workers are badly served by existing workplace pensions arrangements due in part to the £10,000 earnings trigger for automatic enrolment into workplace schemes. As a result, women, who make up disproportionate number of those working part-time and in low-paid roles, make up just 37 per cent of those eligible for auto-enrolment. The TUC has long argued that employer contributions should start at the first pound of earnings.

The government also has a responsibility to ensure that self-employment is a positive choice made by the worker, not the employer. Many people appreciate the flexibility and control over their work that self-employment can offer. But the TUC is concerned that too many employers are pushing their workforce into self-employment, to avoid their responsibilities to the workers and to the exchequer. Many people are not aware that they have been classified as self-employed or of the implications this choice might have for access to rights and workplace benefits.

The TUC has called for the Taylor Review to investigate whether the current tax system incentivises employers to use insecure forms of employment.  We are concerned that increasingly numbers of employers are seeking to devise different employment models including self-employment and the employment of individuals through intermediaries such as umbrella companies and personal service companies in order to avoid employment law and tax obligations.  Such practices are already widespread in sectors such as construction. However, they are also starting to emerge in low paid sectors, including hairdressing, couriers, logistics and delivery firms and warehousing.  They are also found amongst professional groups, including pilots and teachers.

The TUC is concerned that the growth in these forms of employment have a negative impact on workers through a loss of rights and benefits.  They are also likely to have a negative impact on the exchequer and consequently the taxpayer through a loss of revenues.

5. Is there evidence that businesses are treating agency workers unfairly, compared with employees?

The TUC is concerned that many agency workers are losing out on equal pay at work.  Agency workers often do not receive the going rate for the job which is paid to permanent staff, even though they have worked for the same employer for many years. This is often due to the use of the so-called ‘Swedish derogation’ or pay between assignments contracts. Individuals employed on such contracts are not entitled to equal pay even where they have been on an assignment for more than 12 weeks. The TUC has discovered that in some workplaces agency workers were paid up to £135 less a week than permanent staff doing the same job.[9]

The TUC believes that the so-called Swedish derogation should be removed from the Agency Worker Regulations to ensure that all agency workers qualify for equal treatment. This would also ensure that employers cannot use agency workers to undercut the pay and conditions of other workers.

Like other ZHC workers, agency workers often lose out on basic rights in the workplace due to their uncertain employment status and the intermittent nature of their employment.  Agency workers are therefore not eligible for many core employment rights, including redundancy pay, family friendly rights and even protection from blacklisting.  Many agency workers also lose out on holiday rights.  Whilst those in permanent employment continue to be paid whilst they are on leave, agency workers often receive ‘rolled-up’ holiday pay as part of their weekly wage.  This can act as a deterrent to individuals from taking time off. Agency workers often feel obliged to remain available for work at all times, for fear that if they turn down a shift they will not be offered future work.

Agency workers also face additional difficulties in accessing and enforcing employment rights due to the tripartite nature of their employment relationship between the agency worker, the hirer and the agency. In most cases agency workers will not be an employee of the hirer for whom they do work.  This is despite the fact that it is usually the hirer who allocates and supervises their work on a daily basis.  It is also often the hirer who decides whether an agency workers should be sacked or removed from an assignment. Agency workers are prevented from challenging arbitrary dismissals in the courts and tribunals, because the agency is deemed to be their employer.  For similar reasons, they also face difficulties in challenging discrimination and harassment at work.

6. Should there be steps taken to constrain the use by businesses of agency workers?

The TUC has always recognised that it is legitimate for employers to hire agency workers to:

•            Manage peaks and troughs in demand
•            Cover short terms absences, due to sick leave or parental leave
•            Access specialist skills which are required on a short term basis

We are however concerned that employers increasingly use agency workers to displace permanent jobs, including in communications, food manufacturing and agriculture, in order to reduce costs and drive down pay and conditions. 

The TUC believes that employers should be required to provide recognised unions with information detailing the proportion of the workforce and the numbers of staff employed on fixed term contracts and ZHCs and the numbers employed via agencies, and other intermediaries such as umbrella companies and personal service companies. Employers should also be required to explain the reasons for using non-standards contracts and efforts which are be adopted to transfer contingent staff onto permanent, secure contracts.

All employers including in the public and private sectors, should be required to report this information every year, for example in annual reports or on the organisation’s websites.

The government should also encourage employers to review their use of agency workers.  Where agency workers have been employed in the same workplace for more than three months, employers should be encouraged to assess whether the work done by the agency workers will be on-going and if so individuals should be offered a permanent job with the employer.

7. What are the issues surrounding terms and conditions of employees, including the use of zero-hour contracts, definitions of flexible contracts, the role of the Low Pay Commission (LPC), and minimum wage enforcement?

The growth in insecure work combined with the inconsistent application of statutory employment rights has contributed to the creation of a two-tier workforce. The core workforce continues to enjoy the benefits of job security, protection from arbitrary treatment and other work-related benefits associated with ongoing permanent employment, including enhanced contractual rights to sick pay and pension entitlements.

In contrast, individuals engaged in more ‘flexible’ forms of work bear all the risk in the workplace. They can legally have their regular employment terminated at a moment’s notice, have no guaranteed hours and are not entitled to redundancy pay if work dries up – leaving them with no money for household bills until they find another job.

The TUC believes that the government should develop policies which promote the creation of quality jobs which afford security to the workforce guarantee decent pay and conditions.  The government should also encourage employers to adopt more flexible working practices such as job sharing, term-time working, flexi-time, and flexible working hours.  Such practices assist organisations to balance the operational needs with the caring and wider responsibilities of staff, without creating increased insecurity for workers.  Such practices can assist employers to recruit and retain staff and can improve workforce motivation and productivity.

The LPC plays an important role in advising on national minimum wage (NMW) rates.  The Commission has also played an important role in investigating and identifying low paying sectors where workers are most at risk of not being paid the NMW. 

However, the TUC is seriously concerned that the enforcement system for breaches of the national minimum wage and other basic workplace rights is substantially under-resourced. The imposition fees of up to £1,200 has priced many workers out of justice and created a serious deterrent for individuals to take genuine cases to an employment tribunal (ET).

The TUC believes the government should commit to substantial increases in resources for all the enforcement agencies and abolish ET fees. 

Consideration should also be given to extending the GLA licensing model to high risk sectors such as particularly to sectors like construction, hospitality, cleaning, social care, warehousing and distribution where exploitative practices affect large numbers of workers.  We believe licensing is the most effective means of tackling labour market exploitation. It involves routine workplace inspections of businesses seeking to operate in a sector and compliance inspections at regular intervals. It prevents exploitation occurring and through inspections, frontline staff build intelligence and relationships with workers compliant businesses in the sector, which makes it easier to identify cases for further investigation and enforcement action.

8. What is the role of trade unions in representing the self-employed and those not working in traditional employee roles?

The TUC is concerned that concerned that millions of working people are trapped in insecure jobs, where exploitation is the norm and there is limited prospect to escape.

The growth in insecure employment has led to a serious imbalance of power between employers and working people. As a result workers are most vulnerable to bullying and mistreatment. 

The TUC recognise that reforming employment law could help improve the lives of those in the insecure workforce.  However the only way to rebalance the employment relationship and to ensure that all workers are employed in decent jobs, offering decent pay and conditions is by ensuring that people have a voice at work and the ability to be represented by an independent trade union.

Unions increasingly organise and represent workers employed on non-standard contracts, including agency workers, ZHC workers and the self-employed.

In the construction sector and parts of the entertainment sector, including film technicians, musicians, actors and journalists, freelance work and self-employment is increasingly the norm.  Unions recruit and represent members within these sectors, offering specialist advice and support.  In construction and the logistics sector, unions have worked with members to resist the growth in false self-employment arrangements which deprive workers of rights and work-related benefits.

In recent week unions such as Unite, the GMB and Unison have exposed bad working in practices in companies such as Sports Direct, ASOS, and Hermes, and within the social care sector.  Unions are keen to work with employers to agree improvements in pay and working conditions for those in insecure and to secure them permanent employment.

However unions face significant challenges when seeking to organise groups of insecure workers, who often work unsocial hours and whose work is often temporary and therefore they move quickly from job to job and workplace to workplace.  Unions are therefore exploring ways of using social media to recruit and communicate with members. The TUC is also concerned that key trade union rights, including the right to paid time off to represent members and carry out union duties and activities are currently limited to those who are employees.  As a result, many self-employed workers or agency workers working on construction sites do not benefit from representation by a local workplace rep.

The TUC believes the government should:

Amend the law to ensure all workers can benefit from the full range of trade union rights.

Provide unions with better rights to access workplaces and to contact workers, including those in insecure jobs during working hours.

Adopt measures which promote collective bargaining, particularly in low paying sectors.

Summary of recommendations

•            All workers, including employees, agency workers, casual workers, and freelancers, should be entitled to same floor of statutory employment rights, including:

             The right to a written statement of pay and conditions and a pay slip

             Family friendly rights, including rights to paid time off for antenatal appointments, maternity and paternity leave and the right to request flexible working practices.

Job security rights, such as the right to paid notice periods, protection from unfair dismissal and redundancy pay

•            There should be a single definition of ‘worker’ used for all statutory employment rights that should cover all economically dependent workers.
•            There should be a statutory presumption that all workers qualify for the full range of employment rights, unless the employer can demonstrate that the individual is genuinely self-employed.
•            The TUC believes that the so-called Swedish derogation should be removed from the Agency Worker Regulations to ensure that all agency workers qualify for equal treatment. This would also ensure that employers cannot use agency workers to undercut the pay and conditions of other workers.
•            Consideration should be given to should be considered include:

             Giving low-paid workers equal rights to SSP, paid at the normal rate, or at a rate equivalent to their normal weekly earnings if that is lower.

             Revising statutory paternity pay rules, to ensure fathers receive earnings relating paid

             Introducing an allowance similar to Maternity Allowance for new fathers, adoptive parents or new parents who opt to take shared parental leave in the first year after birth or adoption.

             Paying maternity allowance at an equivalent rate for first 6 weeks as earning related rates for SMP.

•            Government should also examine how the lower earnings limit works across the board, with a view to ensuring that low paid workers are not excluded from other key income protections’

•            The government should use procurement arrangements to end the use of insecure employment, including ZHCs, agency work and false self-employment arrangements in public services.
•            The TUC believes that employers should be required to provide recognised unions with information detailing the proportion of the workforce and the numbers of staff employed on fixed term contracts and ZHCs and the numbers employed via agencies, and other intermediaries such as umbrella companies and personal service companies. Employers should also be required to explain the reasons for using non-standards contracts and efforts which are be adopted to transfer contingent staff onto permanent, secure contracts.
•            All employers including in the public and private sectors, should be required to report this information every year, for example in annual reports or on the organisation’s websites.
•            The government should commit to substantial increases in resources for all the enforcement agencies and abolish ET fees. 
•            Consideration should also be given to extending the GLA licensing model to high risk sectors such as particularly to sectors like construction, hospitality, cleaning, social care, warehousing and distribution where exploitative practices affect large numbers of workers. 
•            The government should amend the law to ensure all workers can benefit from the full range of trade union rights.
•            The government should provide unions with better rights to access workplaces and to contact workers, including those in insecure jobs during working hours.
•            The government should adopt measures which promote collective bargaining, particularly in low paying sectors.

19 December 2016