U.K. To Create A Watchdog And 'One-Stop Shop' To Protect Workers' Rights
The U.K. Government confirmed today that it is to create “a powerful new workers’ watchdog” to protect the rights of U.K. workers and bring the responsibility for tackling modern slavery, enforcing the minimum wage and protecting agency workers under one roof. In forming the new enforcement body, it will be following through on the Good Work Plan in its 2019 consultation and implementing proposals suggested by Matthew Taylor in his independent review in 2016. This new body is to be established through primary legislation. But the government has not yet given any indication of a timeline, or of the level of funding.
“This new workers’ watchdog will help us crack down on any abuses of workers’ rights and take action against companies that turn a blind eye to abuses in their supply chains, while providing a one-stop shop for employees and businesses wanting to understand their rights and obligations” said Business Minister Paul Scully. The Government’s plans will bring together the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and HMRC’s National Minimum Wage Enforcement into a singe enforcement body.
Better co-ordination and the pooling of intelligence is intended, as the Taylor Review proposed, to help improve enforcement. This watchdog will also be conferred with an ability to ensure vulnerable workers get the holiday pay and statutory sick pay they are entitled to without having to go through a lengthy employment tribunal process, said the Department for Business, Energy and Industrial Strategy (BEIS).
The watchdog for workers aims to enhance workers’ rights by providing a single, recognisable port of call for workers so they can know and understand their rights, and blow the whistle on their employers while feeling supported. As such, it echoes initiatives being taken forward by the regulator, the Financial Conduct Authority, around whistle-blowing.
Enforcement activities via existing practices around the naming and shaming of businesses who fail to pay workers what they are due are to continue, and the government also undertakes to provide support for business via guidance issued by the new watchdog.
Given the rising tide of concern on environmental, social and governance (ESG) issues among large institutional investors, the U.K. government has the supply chain for listed businesses clearly in its sights. The statement from BEIS states that it “will explore further measures to target abuses in the garment sector specifically, following reports of serious problems in the industry.“
Options being examined include creating a Garment Trade Adjudicator to investigate companies’ supply chains, or extending the licensing scheme that currently covers employers in the agricultural sector. Under the scheme, businesses who provide workers for agriculture and the fresh produce supply chain must apply for a license to operate in these sectors.
The legislative and regulatory scrutiny of business is increasing - where behaviour does not improve on pay and working conditions in supply chains, the government warned that it could introduce harsher measures, “including bans on goods made in factories where workers have been underpaid.”
“We will take action against big brands that turn a blind eye to abuses” said the U.K.’s Business Minister.
In reaction to the government’s announcement, Frances O’ Grady, TUC General Secretary, said: “Today’s announcement is heavy on spin, but light on action. Rather than clamping down on bad bosses now, the government is today making an announcement with no plan to legislate to make it happen - and no new funding either. Last month they failed to announce the long-promised employment bill in the Queen’s Speech. And they have failed to appoint a new director of labour enforcement.”
When Matthew Taylor stood down as Director of Labour Market Enforcement at the end of January 2021, his exit left a vacancy that is still unfilled. Mr Taylor has been quoted in the media as having said ministers appeared “indifferent” and “complacent” about employment protections. He warned in a final strategy statement that the pandemic would mean that workers would be at a growing risk of exploitation with rising unemployment, compounded by changes after Brexit.
This is what he said on Twitter at end -January as the last Director of Labour Market Enforcement:
Further details on today’s government announcement are now awaited by a great many people. In the five years since the Taylor Review , there has been growing concern expressed by stakeholders in U.K. businesses and across civil society, the political spectrum and global leadership, around issues of ethics, fairness and inequality when it comes to workers’ rights and their representation.
By 2020, the questions raised by the rise of the ‘gig economy’ and the lack of worker protections in the business models offered in the name of “flexible working” had grown a lot louder against the backdrop of the Covid-19 pandemic and the plight of front-line workers. Britain’s gig economy accounted for 4.7m workers in 2019 according to a report by the TUC, and the numbers are only likely to have grown, given economic circumstances.
There have also been interesting challenges recently to our thinking in the U.K. around practical corporate governance and what is acceptable in a changing world,.These have repeatedly come via the U.K’s legal system, which appears increasingly to be an arbiter of last resort on issues of societal concern.
In February 2021 there was an important ruling by the U.K. Supreme Court on Uber, a gig economy poster child, and this is what Board Talk had to say about it. At the time the court said that Uber drivers should be classified as ‘workers’ and were entitled to workplace benefits including a pension.
The thinking around pensions as a fundamental corporate governance issue has certainly progressed - only last month, in May 2021, the U.K. pensions regulator called on gig economy companies to start offering pensions for workers “and not (to) wait until forced to do so “ reported the FT.
Today, the U.K. government’ s announcement makes no reference to the existence of a gig economy amid multiple references to workers’ rights. But perhaps there is more to come.
In March 2021 Spain became the first European Union country to give couriers for apps including Uber Eats and Deliveroo collective bargaining rights. The words of Charles Counsell, CEO at the U.K. pensions regulator last month (May 2021) resonate and could play their part in swaying considered opinion on workers’ rights as we emerge from this pandemic.
“I am going to call on other organisations in the gig economy to start to recognise that the people who vote for them are workers and should be eligible for a pension. This is all about helping people working in the economy to have a decent standard of living in retirement” said Mr Counsell.
A decent standard of living during a working life must be - by implication - essential. The human element in ‘human capital’ has never been more critical, alongside the pressing need for better engagement between bosses and workers.
Main image credit : Safer at Work by BP Miller @Unsplash
