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22 January 2001updated 09 Sep 2021 8:17am

Enforce workers’ rights

NS/Fabian Society Second-Term Agenda - Enforce workers' rights. By Nick Burkitt

By Nick Burkitt and Richard Dunstan

Every year, the government makes us check that our cars are not breaking the law, with the MOT test. If our car fails, we don’t get fined or sent to prison – we just get told what to do to put it right. We need the same approach for the new rights at work, including the minimum wage, parental leave and paid holiday. There should be an “MOT” (or, rather, a DOE, or Department of Employment test) for employers, overseen by a new, proactive enforcement agency.

The government wants a flexible labour market, but one that is underpinned by an “infrastructure of decency and fairness”. It believes that fairness and efficiency can go together at work. But while many employers provide much better terms and conditions than they are required to by law, hundreds of thousands of people do not get even their minimum, basic rights.

Typically, these workers are low-paid and low-skilled. They are often non-unionised, thus vulnerable to exploitation. Typically, they are care and nursing-home staff; hairdressers; bar, hotel and restaurant workers; shop assistants and cleaners. Despite the rhetoric about the knowledge-driven economy, they are growing occupations that will remain significant in the labour market – you cannot get your furniture moved by ISDN, or your hair cut by e-mail. Last year, Citizens Advice Bureaux dealt with 700,000 employment-related cases, and the conciliation service Acas received more than half a million inquiries about employment rights. Many more people go to other organisations, such as the Low Pay Unit.

Workers who are denied one employment right, because they are in a weak bargaining position, tend to miss out on others, too. Many of those who complain about not getting the minimum wage, for example, are also losing out on rights such as holiday and sick pay, itemised payslips and proper breaks.

Some are not aware of their legal entitlements; others have no idea how to enforce them, or fear losing their jobs if they try to do so. Even if a claim for unfair dismissal leads to compensation, the amount is likely to be small, and the worker will still be out of a job. In any case, many workers are daunted by the idea of going to a tribunal. It takes months, it can be very stressful, and it can be as damaging for the worker’s future reputation as for the employer’s.

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Many employers, especially small firms without a personnel specialist, do not know about or fully understand their obligations to their workforce. Some regulations, such as those on working time, are highly complex, while others relate to situations that arise only rarely. In a company with ten employees, a pregnancy will happen, on average, only once a decade. For small employers, especially in low-profitability sectors, it is not worth the time to learn the detail of such employment law.

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The solution is not to deprive large numbers of workers of their rights in the name of “cutting red tape”. Such employers need help, backed by state resources, to meet their responsibilities. They need information, but also practical assistance.

To ensure that all working people in Britain enjoy the minimum rights guaranteed them by law, and to avoid the growth of destructive and divisive legal disputes, an employment rights enforcement agency should be established.

The Inland Revenue already has a successful enforcement agency for the national minimum wage. Using this model, the new body would act as a neutral auditor to check that employers are meeting their legal obligations to their workforce. Acting on tip-offs and anonymous individual complaints, as well as random “spot checks”, the agency would enter a workplace as an advocate of neither employer nor worker.

Where an employer is not meeting its legal obligations – workers not being given paid holiday, part-timers not getting equivalent benefits to full-timers in the same job, or parents being denied parental leave – the enforcement agency would inform the employer and provide guidance on how to rectify the situation.

To minimise the burden on small and low-profitability employers, the agency could put them in touch with support services, including (state-funded) “locum personnel officers”, who could help them adopt current best practice and devise effective work-life balance policies. Thus the productivity benefits of more enlightened and sophisticated management practice would be spread to those parts of the economy that tend to miss out on them.

However, if an employer continues to deny workers their rights, the agency would have clear and effective powers to impose financial penalties and, where necessary, to take a worker’s case to an employment tribunal or to the courts – just as the minimum wage enforcement agency does now.

The MOT test keeps rickety and dangerous cars off the roads; a new Department of Employment test could do the same for employers.

Nick Burkitt is a research fellow at the Institute for Public Policy Research; Richard Dunstan is employment policy officer at the National Association of Citizens Advice Bureaux. This is the seventh in a series of articles, prepared by the NS and the Fabian Society, on ideas for a second Labour term