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As the UK prepares to set its own laws, what does the future hold for employment law?

Beverley Sunderland, Managing Director - Crossland Employment Solicitors
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This article appeared in issue 188 of theHRDIRECTOR publication and, during our edit, we unintentionally made a change which misconstrued one particular detail. Obviously, we know very well that detail matters in law and so we would like to extend our apologies to Crossland Employment Solicitors and the author of the article, Beverley Sunderland. So here is the article with the detail reinstated, as originally intended by the author. 

In past generations, the ultimate goal was to become an employee, with a job for life and families following one another into the same business. The employer would often take a paternal view of their workforce, viewing them more as family than employees, sending them off at the end of their time with their gold watch and final salary pension.

Now the UK, unlike many other European countries, does not just have the two types of person working in their businesses: the traditional employee and the self-employed. There is also a third category of person called a ‘worker’, often referred to as a ‘limb b’ worker. This references the relevant legislation giving workers and employees rights, where the definition of employee refers to a) someone working under a contract of employment or b) someone working under ‘any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual’. So essentially doing the job personally, but not in business on their own account.

But as society has developed there has become less loyalty on both sides of the employment relationship. Profit drives companies much more than ever before, particularly those backed by private equity or publicly listed. The desire to nurture and develop employees has gone and, in keeping with other sectors of society, it has become a ‘throw away’ society where under performing employees are simply dispensed with, like broken washing machines.

However, loyalty from workers is also declining. Many in the younger generation will not hesitate to move roles if they feel their career aspirations are not being addressed or their employer does not meet their high standards on equality and inclusiveness. Rather than try and make a difference they will simply move on – knowing that particularly with Brexit it will be even more of a candidate led market.

Also, the gig economy has grown at such a pace with workers either choosing this lifestyle to fit in with personal circumstances such as caring, or just trying to make ends meet with multiple jobs. There are fewer traditional employees and many more individuals who work for different companies doing different jobs, often in the same day, at times to suit them.

So the question now is whether the extensive laws which exist on our statute books are actually fit for purpose in this ever changing employment landscape?

The Employment Rights Act 1996 ushered in the biggest change to employment law for a generation and since then the rights of employees in the workplace have been developed and strengthened in the subsequent 25 years, often with the intervention of the EU.

Although the right not to be unfairly dismissed is probably the most important right (usually after two years although there are over 30 exceptions to this), employees also enjoy the right to maternity/paternity/adoption and shared parental leave, statutory sick pay when off sick and redundancy payments if their employer makes them redundant.

Their rights are strengthened through other legislation:

  • The Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 prevents fixed term employees from being subjected to a detriment when compared with permanent employees doing the same role.
  • The Information and Consultation of Employees Regulations 2004 enabling employees to insist on their employer consulting with them over specific matters – enhanced with effect from 6 April 2020 because the percentage of employees required to request this is reduced from 10% to 2%.
  • The Transfer of Undertakings Regulations (Protection of Employment) Regulations 2006 aimed at protecting employees when their businesses are sold. Originally a European Directive the UK enhanced the protection offered to include ‘service provision changes’ which goes much further than the original European requirements.

It is not that workers are totally without protection, there is legislation which applies to both traditional employees and also ‘limb b’ workers: the Working Time Regulations 1998 extends the right to paid holiday and protection over working hours, the Equality Act 2010 prevents discrimination, the Part Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 ensures workers who are part time are not subjected to a detriment compared with their full time comparators and the Minimum Wage Act 1998 provides for a minimum wage. From 6 April 2020 they will also be entitled to a written statement of terms and conditions from day one and also an itemised payslip.

However, the vast difference in rights is why many companies have tried to take advantage of this sea change in the workplace and, in some cases, the desperation, of those working in the gig economy. The employer’s starting position initially was ‘self-employed’ where there are no rights at all.

However, after years of companies taking advantage of low paid ‘self-employed’ staff, who they could turn on and turn off at a moment’s notice, there was a fight back. Years of litigation on behalf of this perceived ‘underdog’ in the workplace has led to most delivery drivers, cyclists, plumbers working under someone else’s banner and Uber taxi drivers all being entitled to at least worker’s rights such as paid holiday and a minimum wage.

Matthew Taylor’s review into modern working practices made many recommendations which the Government accepted in the ‘Good Work Plan’ and this included ensuring better clarity for employers and workers on employment status and ensuring that the differences in rights between workers and employees really are minimal. The Good Work Plan was published in December 2018 and since then there has been little to no movement other than to introduce pay slips and statements of terms and conditions – changes which could be generously described as ‘tinkering around the edges’.

Of course, our entire parliament was consumed by Brexit and now the coronavirus crisis (quite literally given the number of MPs who succumbed), both of which have obviously had to take priority.

However, the distinction between the workers and employees seems to be reducing in an almost Darwinian way without legislation. There was recently a first instance Tribunal decision in the case of Dewhurst v Revisecatch Ltd t/a Ecourier which held that the protection of TUPE applies to workers as well as employees. Although not binding on other tribunals unless and until it is unsuccessfully appealed, it is a sign of things to come.

March 2020 brought into sharp focus the reality of not being an employee when the COVID-19 crisis began to unfold across the world. Workers realised that when they were off sick with the virus or self-isolating they did not qualify for statutory sick pay as this was only available to employees and instead they would have to fall back on an overburdened universal credit system.

As workplaces started to close down either through lack of work, because it was impossible for them to continue safely, or because the Government told them to, employees were assured that the Government would support them through the Coronavirus Job Retention Scheme and ensure minimum payments to them by reimbursing their employer up to £2,500 a month.

Those who had either chosen or been forced into the role of worker and not employee must have been terrified for their livelihoods and families and wondering whether it really was worth it or whether traditional employment would give them the security they needed.

However, in a move which might well be a defining moment in employment law for workers, on 4 April 2020 the Government revised its original guidance on the Coronavirus Job Retention Scheme to make it crystal clear that the ‘limb b’ worker is indeed included within the scheme provided that they were paid through payroll and on the books as at 28 February 2020 and that they can, if their employer chooses to, be ‘furloughed’ alongside their employee colleagues with 80% of their historical earnings.

Of course, there are some obvious flaws – employers are more likely to dispense with the services of workers who have no rights not to be unfairly dismissed, but equally if they retain the employees on furlough then at the end of the furlough period if there is still no work then employees must be paid redundancy if there is still no role for them.

As ‘normal’ working life starts to be restored after the coronavirus crisis, time will tell whether those who in recent years have preferred to operate in the gig economy with the risk of not having as many rights, will now seek roles with employee status, or whether they will recognise that the divide between the rights of workers and employees is slowly closing. We shall have to wait and see.

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