Urgent reform of employment law needed to prevent insecurity, in-work poverty and exploitation arising from coronavirus pandemic

Centre for Progressive Policy calls for elimination of zero hours contracts, and for statutory presumption that workers are employed unless it can be proved they are self-employed

The Centre for Progressive Policy (CPP) has called for urgent reform of employment law to prevent further insecurity, in-work poverty and exploitation arising from the coronavirus (COVID-19) pandemic.

In a new paper, From precarious to prosperous - How we can build back a better labour market, the CPP argues that the COVID-19 crisis has intensified labour market pressures amongst an increasingly insecure workforce - with the number of people on zero hours contracts in the UK rising to more than a million in Spring 2020 - and says that it is concerned that that the end of the Coronavirus Job Retention Scheme and a second wave of COVID-19 will increase insecurity and open the door for further in-work poverty and exploitation.

Highlighting the result of a poll of more than 600 business which found that 40 per cent of employers feel more responsibility to offer secure job contracts to staff in response to COVID-19, the CPP recommends that the government -

• clarify employment status in law to better reflect the modern economy, including by introducing a statutory presumption that a person is a worker unless it can be proved that they are self-employed;
• eliminate the use of zero-hours contracts, reducing economic insecurity for those at the bottom end of the labour market;
• protect worker rights as the UK leaves the EU, including ensuring that rights derived from the Working Time Directive are preserved;
• implement a minimum wage for the self-employed to reduce low pay, expanding on the principle behind the current relaxation of universal credit’s ‘minimum income floor’;
• collect more detailed information on employment status as part of the Office for National Statistics Labour Force Survey, including to identify gig economy workers and whether people are workers or employees; and
• set up a single labour market enforcement body as promised in the 2019 Conservative Party manifesto, which improves transparency and is designed to support the most vulnerable.

Commenting on the CPP's recommendations, Paul Gregg, Professor of Economic and Social Policy at the University of Bath and member of the government’s Living Wage Commission, said -

'The last recession saw sharp increases in the levels of insecure employment – zero hours contracts, agency working and low skilled contract workers designated as self employed. This never receded through the strong jobs recovery. This COVID-19 recession will undoubtedly see this repeated.

CPP’s recommendation to set up a single labour market enforcement body which improves transparency and is designed to support the most vulnerable is a crucial step in the right direction. Millions of workers do not receive holiday, sickness and maternity pay protections or paid less than the minimum wage through lack of enforcement. When unemployment is high, workers vulnerability to these abuses only rises.'

The CPP Paper From precarious to prosperous - How we can build back a better labour market is available from progressive-policy.net