Current regulation in the UK creates a labour market that, generally speaking, strikes the balance between flexibility for employers, and job opportunities and security for individuals. However, employers need to ensure that any working arrangement works for both employer and individual.

The situation

The issue of employment rights and whether the UK labour market strikes the right balance between providing flexibility for employers and protections for individuals is a hotly contested one.

On one side critics argue the system is over-regulated, the compliance burdensome for employers and hence stifling for growth. On the other hand, opponents say more regulation is needed to counter the growing ‘casualisation’ of jobs, leading to income and job insecurity for areas of the UK workforce.

The debate received more attention following the 2017 Review of Modern Working Practices by RSA Chief Executive Matthew Taylor. This was initiated as a result of concerns that the gig economy was blurring the lines between self-employment and worker status, highlighted by a number of employment tribunal cases involving companies such as Uber and Deliveroo.

The UK Government has responded to recommendations from the Taylor review in its Good Work Plan and has just consulted on proposals to tackle one-side flexibility which suits the employer at the expense of the worker.

 

CIPD viewpoint

Based on available evidence, the CIPD believes that the current level of UK regulation creates a labour market that generally strikes the right balance between providing employers with flexibility, and job opportunities and security for individuals.

CIPD research found that despite the UK having one of the least regulated labour markets amongst OECD countries in terms of employment protections, UK workers enjoy above-average satisfaction with their job, the hours they work, working conditions and work-life balance based on international comparisons. The UK also benefits from high levels of employment and a high proportion of people in permanent employment based on international comparisons.

CIPD research also suggests that the majority of ‘atypical’ workers, including for example, temporary workers and people on zero-hours contracts or working in the gig economy choose to work in this way, and have at least comparable job satisfaction as permanent employees.

Nonetheless, a significant minority of atypical workers would rather have a permanent job or work more or more regular hours, suggesting some employers need to take steps to ensure the flexibility associated with atypical working works for both the individual and the employer.

Consequently, CIPD welcomes the government decision to introduce a right for workers to switch to more regular work patterns and its proposals to introduce a right to reasonable notice of work schedules and compensation if shifts are cancelled at short notice.

However more needs to be done to ensure that both atypical workers and employees are aware of their employment status and rights, supported by enhanced enforcement action where these are being breached.

 

Actions for the UK Government

  • Protect existing employment rights following the UK’s departure from the EU.
  • Improve awareness of existing employment rights by running a high-profile ‘know your rights’ campaign, working with organisations such as Acas, Citizens Advice Bureau, trade unions and professional bodies, which would set out information on the different types of employment status and the associated employment rights.
  • Increase the resources available to Acas so it can work proactively with organisations to improve their working practices if they risk falling foul of the law through ignorance or lack of resources.
  • Improve labour market enforcement to ensure all employers comply with employment regulation and the rights of individuals are protected.
  • Abolish worker status, which would provide a clearer distinction between self-employment and employee status. It would also align status for tax and employment purposes.

 

Recommendations for employers

  • Ensure the use of non-standard or atypical working arrangements is in response to a genuine business requirement for flexibility, and works for both the organisation and individuals.
  • Set out clearly in employment contracts the employment status of atypical workers, and regularly review (at least once a year) the working arrangements in practice to ensure that the reality of the employment relationship reflects what is set out in the contract.
  • Provide training/guidance for line managers to ensure they are managing atypical workers in line with their employment status, and in a way that supports mutual trust and respect.
  • Provide reasonable notice of work schedules to enable workers to plan ahead.
  • Provide atypical workers with reasonable compensation if pre-arranged work is cancelled with little or no notice.

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