Millions of workers in the gig economy are set to receive new employment rights, including the enforcement of holiday and sick pay, under reforms to be announced today.
Theresa May will say that Britain will become one of the first countries to tackle the challenges of the changing world of work, pledging to help to create better, higher-paying jobs.
Ministers are responding to a review headed by Tony Blair’s former policy director, Matthew Taylor, into rights for gig economy workers. The government said it was proceeding with almost all recommendations including giving zero-hour and agency workers the right to request a more stable contract.
Ministers said that they planned to go further than the review’s proposals by enforcing workers’ holiday and sick pay for the first time, ensuring day-one rights such as holiday and sick pay entitlements and a new right to a payslip.
About 1.2 million agency workers will be entitled to a breakdown of who pays them and any costs deducted from their wages, while the Low Pay Commission will be asked to consider higher minimum wage rates for those on zero-hour contracts.
Labour criticised the government for launching consultations rather than taking immediate action while the TUC said it had taken a “baby step, when it needed to take a giant leap”. Industry figures questioned whether the government would be able to draw up a legally tight definition of “workers”.
Laws allowing agencies to employ them on cheaper rates could also be repealed, while some employment tribunal fines against employers will be quadrupled to £20,000.
A consultation will be launched to see whether laws are needed to make it easier to understand if someone is an employee, worker or self-employed, an issue that has led to a series of employment tribunal cases in recent years.
The government response will also shelve permanently plans to hike national insurance contributions for the self-employed. One business group complained that today’s announcement did not include the challenge for the self-employed of applying for mortgages and insurance products.
“It’s disappointing that these challenges have once again not received a mention,” the Federation of Small Businesses said.
Mrs May said: “We recognise that the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK’s position as one of the best places in the world to do business.
“We are proud to have record levels of employment in this country but we must also ensure that workers’ rights are always upheld. Our response to this report will mean tangible progress towards that goal as we build an economy that works for everyone.”
The TUC’s general secretary, Frances O’Grady, added: “These plans won’t stop the hire-and-fire culture of zero-hours contracts or sham self- employment, and they will still leave 1.8 million workers excluded from key protections.”
Torsten Bell, director of the Resolution Foundation think tank, said: “The government is right to be taking concrete measures to boost enforcement of our labour market rules and to increase the fines for employers who break them too often.”
Rebecca Long-Bailey, the shadow business secretary, said: “Launching four consultations and merely ‘considering’ proposals is not good enough. Like so much from this government, today’s response is just more words with no real action to improve the lives of the millions of people in insecure work.
“Theresa May’s failure to strengthen workers’ rights is having a real impact on people’s lives. Only recently we heard of the devastating case of a gig economy worker who died after being fined by DPD [parcel deliveries] for attending urgent medical appointments.
“Labour warned the review did not go far enough, and yet the government has failed to adequately meet even the most basic of recommendations.”