The UK labor market is looking for a push towards self-employment

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The UK government needs to act to stop voluntary work if it wants its workers’ rights reform to succeed, the official charged with tackling worker abuse has warned.

Margaret Beels, independent director of labor market operations, told the Financial Times in an interview that employers it could ignore new commitments to its staff if ministers continue to delay legislation to clarify the status of staff.

“I would like to see more speed. . . You can negotiate until the cows come home, but sometimes the government just needs to make decisions,” said Beels. roared with concern presented by trade unions and business groups regarding the omission of a critical set of measures from the employment rights law.

The bill, introduced in parliament last year, includes a comprehensive series of changes to give UK workers more protection. But it does not deal with the issue Labor had promised to tackle first: the possibility of employers using differences in UK law on working conditions.

Instead, the government said it would need to hold a long-term discussion on how to create a simple, single-employer system with a clear distinction between employed and self-employed. .

Beels says there is a risk that leaving this issue until later will allow employers to avoid their new responsibilities by hiring gig workers.

The UK does not normally have three types of employment status: employees, self-employed and the intermediate category of “two-legged (b)” workers, and it is often difficult to determine whether people should be caught. how.

Third-tier workers have more protection than the self-employed but lack important workers’ rights that the Labor government plans to strengthen with the ERB, such as statutory sick pay, redundancy rights employment and protection against unfair dismissal.

More importantly, they are treated as self-employed for tax purposes, creating a huge incentive for businesses to use contractors instead of staff, especially after the £25bn Budget increase in employers’ national insurance.

But the rise of self-employment is one of the risks Beels sees as imminent, as the government legislates new rights without saying how much money will be given to enforce them.

The complexity of the UK employment system, where workers could be hired by one agency, hired by another and told what to do by someone else, makes it difficult for people to assert their rights, he said so.

But UK organizations with limited resources struggle to enforce existing labor market laws. Three major bodies – HM Revenue & Customs’ low wages enforcement team, the Gangmasters and Labor Abuse Authority, and the Employment Agency Standards Inspectorate – are set to be merged into A new Fair Work agencywhich has a broad charge.

The role of Beels was created by the previous Conservative government to improve cooperation between the organisations, to develop their strategy and to prepare for this meeting.

He admitted that it has been a frustrating task, as ministers have repeatedly failed to fulfill their commitment to form a single team.

“I explained that I am a person of the type of John the Baptist, let’s prepare the way, this big thing is coming. . . and it never came,” said Beels, former chairman of the GLAA and former director of Scottish Gas.

The Fair Work Agency now operates under Labour, and Beels, whose office will be disbanded when the agency is created, is determined to make it a success.

Improving its profile will be important. “Appearance is really important . . . the staff knows what the agency is doing and how well it is doing,” he said.

Even if there is no new money, creating a single operational organization will make it possible to distribute resources more efficiently, he insisted.

Funding for all three agencies was more than £40mn in 2023-24 – of which £31.2mn was for HMRC’s low income group. Grants for FWA will be determined in the summer intensive use review.

The obstacles meant that the GLAA and EAS did not have the power to “lift the rocks” and investigate the extent of abuses in the construction sector, which had been identified as a high risk, he said. suggest that resources will come under new pressure as the agency’s income grows. .

Beels made this message clear earlier this month to a cross-party parliamentary committee, saying: “If anyone thinks we’re going to raise rates by combining the three funds together . . . it is not so.”

“There needs to be a change of measures to deal with the resources available at the center of unfair labor,” he added.