Labour announce plans for single ‘Worker’ status with rights from day one of employment

• On 26 July 2021 Labour announced plans to introduce a single status of ‘worker’ which would mean that rights were acquired from day one of employment.
• This plan would eliminate the current variations between employment categories meaning that all workers would fall under one bracket.
• Currently, the majority of employment rights are only obtained by those who have ‘Employee’ status, such as the rights to holiday pay, paid parental leave and statutory sick pay (SSP).
• There are also qualifying periods for some rights, such as the right to claim unfair dismissal which arises after two years. Labour’s new plans would see the removal of these periods and mean that all workers were entitled to such rights at day one of their employment.
• The proposal is in response to various recent tribunal cases relating to the gig economy which considered whether individuals were workers or employees for the purpose of National Minimum Wage and holiday pay.
• Labour’s Shadow Employment Rights and Protections Secretary, said:

“Millions of workers are in insecure employment with low pay and few rights and protections, particularly key workers whose efforts got the country through the pandemic … A lack of basic rights and protections forces working people into poverty and insecurity. This is terrible for working people, damaging for the economy, and as we have seen throughout the pandemic, devastating for public health.”

Aspire Comment:

Whilst this proposal would be welcomed by many workers who are not currently afforded many employment rights, the changes would be difficult to manage and costly for many businesses. For example, the removal of the two-year qualifying period for unfair dismissal claims would likely lead to a huge rise in tribunal claims where the employment relationship was not successful in its early stages.

It is imperative that businesses review the working arrangements of their self-employed workforce versus the contracts they are engaged on to prevent a successful claim for employment benefits such as holiday pay, sick pay and redundancy entitlement.

For a review of existing contracts, or any other employment tax matters, call us today on 0121 445 6178 or email enquire@aspirepartnership.co.uk.