The UK government needs to take action to stop bogus self-employment if it wants its flagship initiative to reform workers' rights to succeed, the official tasked with tackling labor exploitation has warned.
Margaret Bales, independent director of Labor Market Enforcement, told the Financial Times that if ministers continued to delay legislation clarifying workers' status, employers could simply avoid new obligations on their workers.
"I would like to see more urgency. . . . You can consult until the cows come home, but sometimes the government just has to make a decision," Bales said, echoing concerns from unions and business groups that a series of key points were missing from the employment rights bill. measures concerns.
The bill was introduced to Parliament last year and includes a series of sweeping reforms aimed at providing greater protections for British workers. But it does not address an issue Labor has previously promised to address: the potential for employers to take advantage of ambiguities in UK law about workers’ status.
Instead, the government said detailed consultation was needed on how to create a simpler framework with a single worker status and a clear distinction between the employed and the self-employed.
Bales said if the issue is left until later, employers could avoid new responsibilities by hiring gig workers.
The UK is unusual in that it has three types of employment status: employee, self-employed and "limb(b)" workers in between, and it is often difficult to determine how people should be treated.
Category 3 workers enjoy greater protections than the self-employed but lack some of the key employee rights that the Labor government plans to strengthen through the ERB, such as statutory sick pay, redundancy rights and protection against unfair dismissal.
Crucially, they are treated as self-employed for tax purposes, creating a huge incentive for businesses to use contractors in place of employees, especially after employers' national insurance budgets increased by £25 billion.
But the rise in false self-employment is just one of the risks Bales sees as imminent, as the government sets out new rights in law but has not yet specified how much funding it will provide to enforce them.
She said UK recruitment practices were complex and workers could be recruited by one agency, hired by another and then told what to do by others, making it difficult for individuals to exercise their rights.
But Britain's resource-strapped law enforcement agencies struggle to enforce existing labor market rules. Three main agencies - HMRC's Minimum Wage Enforcement Team, the Gang and Labor Abuse Authority and the Employment Agency Standards Inspectorate - will be merged into a new Fair Work agency with a wider remit.
Bales' position was created by the previous Conservative government to improve coordination between agencies, develop strategy and prepare for the merger.
She admitted it had proved a frustrating task as ministers repeatedly failed to deliver on their promises to create a single agency.
"I describe myself as a John the Baptist figure, saying prepare the way, this great thing is coming... but it never came," said Beels, a former GLAA chairman and former director of Scottish Gas.
The Fair Work Agency is currently taking shape under Labour, and Bales is committed to making it a success. His own office will be dissolved once the agency is established.
Improving its image is crucial. "Transparency is really important . . . staff know what the agency is doing and how efficient it is," she said.
She maintained that even without new funding, creating a single law enforcement agency would allocate resources more efficiently.
Funding totals just over £40m across all three agencies in 2023-24, with £31.2m going to HMRC's minimum wage team. The resourcing of the FWA will be determined in a rigorous spending review this summer.
She said existing restrictions meant GLAA and EAS did not have the ability to "lift rocks" and investigate the extent of extraction in the construction industry labeled high-risk, and suggested resources would come under new pressures as the agency's remit expanded. .
Bales made that message clear to a cross-party committee of MPs earlier this month, saying: "If anyone thinks we can raise standards just by putting three budgets together... that's not the case."
“Significant changes are needed in addressing the resources available to Fair Work agencies,” she added.