‘The UK government’s workers’ rights agenda must include self-employed people too’
The Employment Rights Bill will be one of this government’s most significant achievements, improving the rights of millions of employees. Trade unions fought hard for it, and thankfully it is now back in its final stages, after the Lords held it up.
Now though, the government must improve protections for those whose working conditions this Bill doesn’t include – the self-employed.
The self-employed make up more than four million people in the UK, 13 per cent of those in work. They dominate important sectors, from the creative industries to construction. Their full-time average net income is 12 per cent lower than for full-time employees.
The government is taking forward important reforms that will benefit self-employed people. Theseinclude the right to a written contract; tackling late payments; extending health and safety and blacklisting protections; reforms to employment status; and creating a ‘Freelance Champion’. But this important part of the workforce needs more, and there is a risk of a widening ‘rights gap’ between employees and the rest of the workforce.
Income protection is particularly important for self-employed people. They get sick, have children and retire just like employees. But when they do, their income drops off a cliff. Inadequate sick pay means the average full-time self-employed worker loses 81 per cent of their income if they don’t work. This thenincreases the likelihood they will come to work sick –working less productively, while spreading viruses to others.
Self-employed parents get a particularly raw deal. The maximum maternity allowance is just £187 per week for 39 weeks. And with just 10 ‘keeping in touch days’, many self-employed people struggle to maintain crucial client relationships. Paternity leave is non-existent – meaning only 31 per cent of self-employed fathers took time off following their child’s birth, according to TUC research. The upheaval in their working lives is stark. Just 24 per cent of mothers who were self-employed before their child’s birth remained so three years later (compared with , 56 per cent of fathers). and 26 per cent were out of work. Pensions are another area where self-employed people need support. The vast majority of self-employed people are not on track to meet the income they need in retirement. This is storing up a huge problem for the state pension – which will come under pressure to prevent looming pensioner poverty among the previously self-employed.The NHS too will face increased pressures due to poverty related conditions being exacerbated for this group.
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Income protection is clearly important, but the self-employed need a different kind of support. They work very differently – usually with greater freedoms over how and when they work, and they pay lower national insurance. But that doesn’t mean the government should wash their hands of responsibility for them. They are still workers and many are in precarious circumstances and on low incomes.
In our new Fabian Society report, we set out some options the government should consider. For sick pay, the government could learn from Canada, and back an opt-out sickness insurance scheme – funded both by the self-employed and the organisations they work for. For parental leave, the government can learn from European countries and provide an income related maternity allowance for longer; create a new paternity allowance; and increase the number and flexibility of vital ‘keeping in touch’ days. And to increase pension contributions, the government could look at the auto-enrolment policies of countries like Lithuania or Chile, and create new savings products to replace Lifetime ISAs and promote pensions and savings uptake too.
Thankfully, most of these measures don’t cost other taxpayers much at all. These options are mostly funded by self-employed people themselves. Parental leave would cost a relatively small amount, but it is such an important benefit for the welfare of children and new parents that it is surely justified.
When the Employment Rights Bill is finally passed, the government will need to follow through and deliver the rights it promises for employees. This will demand the time and continued hard work of trade unions and politicians. Alongside this, the government must also start improving income protections for self-employed people too. If they want to make progress by the next election, that work must start now.
By Meg De Meo
Labour’s Employment Rights Bill promised to enhance much-needed workers’ rights in the UK, but the legislation has become a shadow of itself. Now unions must lead the fight to get it back on track.
A member of the bar staff pours a pint of beer at the Westminster Arms, London.
Working in the hospitality industry this summer was an interesting experience. Like bartenders the world over, I readied myself for the seasonal rush, made jokes about this with my colleagues, and looked forward to the inevitable increase in pay that would come with more hours of work. But the high season never came. A heady mixture of a cost-of living-crisis and a general decline in ‘out out’ culture made sure of this. Instead, I spent this summer experiencing (once again) the struggle of collectivising staff in a sector that is structurally designed to prevent organising.
Along with about twenty other workers, I was brought in on a short-term contract to pull pints and shake cocktails on Brighton Beach. We were met with the usual conditions: poor pay, insecure hours, and absent safety standards. The deepest felt issue, however, was ongoing bullying and discrimination, which twice tipped over to physical assault. The biggest barrier to collectivising workers, as it often is, was the fear of losing our jobs.
Increasingly, workers spend their lives in industries marked by precarity. To rebuild the union movement and empower our class, we must organise in such conditions — this precarity will not stop with any one industry, but will infect more and more if it is left to fester. A ‘day one’ unfair dismissal policy would have been a powerful tool in this fight, which is why big bosses and right-wing politicians have opposed it.
Those MPs who stood on our picket lines when it was politically convenient now conflate ‘day one rights’ with the abolition of probation periods. However, probation periods are entirely possible under the bill. Some have suggested the policy would result in the use of fixed-term contracts in place of probation periods, but this is a misunderstanding of the rules. These rights are not for permanent workers; they are for all workers. Unfair dismissal claims are possible at the end of fixed-term contracts — unless there is a case of genuine redundancy, expiry by agreement, or other fair reason. Put simply, under a system of ‘day one rights’, using fixed-term contracts in place of probationary periods could put employers in breach of employment law.
It is clear what this manifesto breaking U-turn means for workers: a continuation of the status quo. If you face abuse at work, your first thought will not be your well-being, but whether your boss will sack you for causing a fuss. For the first five months and twenty-nine days of your employment, your likelihood of paying rent is based on the whims of your superior. This is not hyperbole or exaggeration. It is the everyday reality for tens of thousands of workers up and down the UK.
Labour argues that the U-turn is justified because, as a result, other provisions of the employment rights bill will end up as law sooner. The government claims that workers will quickly be able to find improved dignity in the workplace through the few protections available in the Employment Rights Bill. But this is not the first pushback on workers’ rights from Labour, and very few union reps believe it will be the last. When in opposition, the party negotiated and consulted with unions on its proposals for workers’ rights. The motion was not perfect — and did not go as far as most of us wanted — but unions got around the table and agreed. Since then, however, the hallmarks of policies aimed at a generational improvement for workers have been slowly eroded, and now, the Employment Rights Bill lives in the shadow of its ambition. Though bosses will be mandated to tell their workers they have a right to join a union, zero-hour contracts and ‘fire and rehire’ are still legal.
This aversion to workers’ rights has been sold to us on the basis of economic good sense. How can businesses operate in such an environment?! Surely, economic growth would be stifled, and the tax base to pay for public services would continue to shrink?! We’ve heard it all before. Relying on the logic of the same business lobby that failed to bring growth to our economy in any meaningful way for the last fourteen years only reinforces establishments across the country.
If the concern is growth, there is a solution: improve workers’ rights and strengthen and expand collective bargaining. When protections are implemented, and there is scope for negotiation, more money goes into the pockets of workers. Those workers do not sit on it, nor siphon it overseas. Those workers spend it in our local economies; they keep the bars where I pour pints open, they buy the produce our agricultural sector grows, and they keep our economy moving while shareholders let it stagnate. More than anything, Labour’s ongoing debacle shows that when workers’ voices are silenced, society as a whole suffers. Thankfully, Unite (my union) has criticised the U-turn, describing it as ‘a betrayal of working people’. Now, members and reps need to demand their unions also join the call — or else we will all lose out.
Contributor
Meg De Meo is a hospitality worker, organising with Unite the Union, and an Executive Council member representing Unite members in the South East.
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