30th October 2014

Review launched to improve clarity and status of British workforce

Business Secretary Vince Cable has this month launched a wide-ranging employment review to help clarify and potentially strengthen the employment status of British workers.

This follows the recent review and upcoming legislation of zero hours contracts, which revealed that up to one million people may be on ‘worker’ employment contracts which have fewer basic rights (such as unfair dismissal or maternity pay) than the vast majority of people who are on ‘employee’ contracts.

It has been claimed that in many instances workers are not aware of their employment status and therefore what employment rights they are entitled to.  It is also believed that many employers are also unsure what rights their workforce is entitled to, running the risk of legal challenge if they get something wrong.

It is understood that officials at the Department for Business, Innovation and Skills will start the process of determining how clear the current employment framework is, what the options are to extend some employment rights to more people and whether there is scope to streamline this very complex area of employment law, thus simplifying and clarifying rights for both employers and employees.

In response to the review, Business Secretary Vince Cable said:

“One of the most striking features of our recession has been the high levels of employment that our workforce has maintained during some very trying times. Employers were resourceful in the jobs they continued to offer and employees remained flexible in the work patterns and pay they agreed to. That was the right thing to do at the time to keep Britain working.

“However now the economy is firmly on the road to recovery, it is important that the fruits of the recovery are shared by all. Some types of contracts which offer fewer employment rights, and which were never designed to be widely used, have become much more commonplace. As the economy recovers, it is right to explore giving a silent minority of workers the security and rights enjoyed by the majority of employees. Confident, secure employees spend money, which is ultimately good for UK plc.

“Workers should not be finding out that they are not protected by law once they get to employment tribunal. We need a system that is fair, simple and transparent – an environment where businesses feel more confident knowing what type of contracts to hire staff on and where individuals know their rights and have the security they deserve.”

The government has stated that many individuals cannot be certain what their employment status is until they are at an employment tribunal.  Therefore, it is believed that it wants to prevent this from happening where possible, so both the individual and employer are clear at the time of recruitment what rights are available. It is also hoped that this will encourage workers and employers to discuss problems instead of heading to the tribunals.

Officials are expected to present their interim findings by the end of the year, and hope to submit recommendations for next steps to ministers by March 2015.