It looks as though Steve Darling, the Party’s newly appointed spokesperson for Work and Pensions, is going to have an early baptism in his new role, with an Employment Rights Bill expected to come before Parliament sooner rather than later.
As a reminder, this was what our manifesto said:
Modernise employment rights to make them fit for the age of the ‘gig economy’, including by:
- Establishing a new ‘dependent contractor’ employment status in between employment and self-employment, with entitlements to basic rights such as minimum earnings levels, sick pay and holiday entitlement.
- Reviewing the tax and National Insurance status of employees, dependent contractors and freelancers to ensure fair and comparable treatment.
- Setting a 20% higher minimum wage for people on zero-hour contracts at times of normal demand to compensate them for the uncertainty of fluctuating hours of work.
- Giving a right to request a fixed-hours contract after 12 months for ‘zero hours’ and agency workers, not to be unreasonably refused.
- Reviewing rules concerning pensions so that those in the gig economy don’t lose out, and portability between roles is protected.
- Shifting the burden of proof in employment tribunals regarding employment status from individual to employer.
Comparing that with what the Labour manifesto highlighted, there are some clear areas of difference. We were pretty much silent on rights for Unions, but that might be readily explained by our preference for individual rights over collective ones. Agreement on such things as protection for mothers in the first six months after birth, or a fair pay agreement for the adult social care sector are likely to be welcomed by our benches, the latter sitting very neatly with our commitments on social care staff.
One of the key areas of difference may turn out to be zero-hour contracts. Labour have said that legislation will ensure workers have a right to contract reflecting the number of hours they regularly work, with reasonable notice of any change in shift patterns. This will, they say put an end to “one-sided flexibility”. That sounds reasonable in theory but, it seems, they’re proposing to ban zero-hour contracts altogether. But for those people who benefit from the flexibility that a fair zero-hours contract offers, such a move will not be welcome. Instead, by offering such employees the right to switch to something more formal, and banning one-sided restrictive contracts, Liberal Democrats would prefer to offer employees more freedom in terms of employment opportunities.
I’m not convinced that any Bill will address the tax treatment of the employed and self-employed, especially as it would imply a review of the controversial “IR35 legislation” which seeks to define whether a contractor is someone who is genuinely self-employed rather than a “disguised” employee, for the purposes of paying tax.
We should also be wary of Labour proposals on flexible working, including working from home. As someone who worked exclusively in an office until the COVID pandemic struck, I had never really considered the advantages of working from home, and in truth, I don’t do so that often even now, but for some people, the ability to organise their work in an irregular pattern, so long as it meets the needs of the employer, actually allows employees to potentially be more effective and more satisfied in their work. It took a Liberal Democrat administration in South Cambridgeshire to demonstrate the benefits of four-day weeks, and it might well take Liberal Democrats to make the case for permitting individual arrangements that can be agreed by employer and employee alike.
For the public sector, where money is tight, but recruitment and retention of specialist staff is becoming ever more problematic, the ability to offer advantageous terms and conditions instead of money might well help, and if we’re serious about rebuilding our public services, finding ways to keep experienced staff in post will be essential.
There’s no doubt that any legislation designed to address employment rights will have to reflect the changing world of work, from a pattern of long-term employment with one employer to the modern era where employees move from employer to employer and/or in and out of self-employment. And a gig economy, whilst potentially precarious, offers scope for those with disabilities or caring responsibilities to find work which might fit better with their personal circumstances.
So, the Employment Rights Bill will offer plenty for Liberal Democrats to support, even if the means of delivery might be questioned. And we’ll have plenty to offer as suggestions to improve employee rights, if Labour are willing to listen…
* Mark Valladares is the Monday Editor of Liberal Democrat Voice.
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7 Comments
Flexibility in employment is a key issue and a complex one including working part-time, where sometimes people do the same work as full-timers but on a lower rate of pay. I also agree we need to do more to keep experienced people and that should include good conditions under which people can be part time for a long period leading up to retirement or movement into a different job.
Another aspect of this is the ability to choose to contribute more towards the employers pension scheme when either part-time or full time.
On your point about the unions, the basic liberal principle is to help individuals and collective bargaining by unions can help with that but unfortunately union leadership does not always behave the way they should. What is happening now and happened too often a few decades ago is those in unions with clout unfairly obtained more than those who were not.
Mark is probably right in suggesting that no legislation is going to sort out the anomalies of employed/self employed status. I spent my 38 years as a full-time Methodist minister paying a self-employed NI contribution and being taxed through PAYE. Some of us questioned this from time to time (although we had never heard of “disguised employment”) but the church was reluctant to go there! On the other hand we enjoyed an unusually high level of job security, provided you didn’t do anything seriously dreadful! If for any reason a post was curtailed from the next 1st September you were guaranteed a job somewhere without any break in employment. Experience tells me that good job security can be as important as paying a decent wage in enhancing performance and productivity.
One of the things that Liberals used to believe in was the concept of industrial democracy. Although Trade Unions have their place in society as a pressure group, in the last few decades they have become less relevant as they have sometimes become more militant and workers have not become members of them. It is good for workers to become involved in companies as directors or as co-owners with profit share etc in the mould of the Co-op. Labour were of course founded by Trade Unions but the cloth cap image has become outdated and Labour feel they have to cave in to their paymasters. I also think that “working from home” is not good in excess. I do not accept that people work harder at home than at work as they can get distracted by other things in their own home. However firms like it as it reduces their costs.
@DavidSymonds is right, we need to be championing industrial democracy which was a key part of Liberal Party policy in the past.
As for trade unions having spent 30 years as an activist in different unions I saw at first hand how they need to be reformed. The link with Labour is tenuos to say the least. The political levy is collected from members often under false pretenses, opting out is made difficult and block votes cast at conferences with no consultation.
I doubt the majority of union members even vote Labour these days, As Liberals we need to develop policy relevant to this group of people who number in their millions and stop behaving as though they are all ‘owned’ by Starmer’s party!
We should certainly start talking about industrial democracy again and cooperatives too, but there remains an important role for trade unions in defending people’s individual rights in the workplace.
@ Nigel,
Absolutely, enabling greater flexibility for employees (within reason) will instil greater loyalty to employers, aid in recruitment and retention, and open up pools of talent that might not otherwise be there. The trick is to make it work for both employers and employees alike.
@ Geoff,
You do wonder how full-time clergy could be treated as self-employed. Could you send someone to preach in your stead if it suited you?
@ David S, David W and Jonathan,
I couldn’t agree more, we’ve traditionally had some quite radical policies designed to balance capital and labour, and now that the age of a “job for life” has pretty much ended, exploring new work patterns and arrangements using the opportunities that technology has created seems like a no-brainer.
Zero hours contracts are a minefield. The Public Sector is one of the biggest users of the device – as an FE teacher, I found permanent contracts hard to find. The 20% proposal makes sense – it creates a financial incentive for major employers to regularise low paid jobs as well as improving rewards for those who rely upon this work. So, a great idea that we should continue to promote.
The best way to start to equalise tax and benefits for the self employed is to continue to phase out NI and increase taxation. My Sunak understood this and had started, but it will take time……