The UK should toughen enforcement of workers’ rights to curb widespread rule breaches in the labour market, an influential think-tank has urged, as concerns grow over the risk of abuses from tighter immigration rules and changing employment practices.
In a report published on Tuesday, the Resolution Foundation said 900,000 British workers reported having no paid holiday, and 1.8mn said they had not received a payslip, while almost one-third of people earning the minimum wage had been underpaid.
The think-tank said workers on insecure contracts, which are rising in number, were both more likely to suffer abuses and less likely to seek redress through the tribunal system, where cases are often held up for months.
It warned that the risks of exploitation were increasing because of a higher minimum wage and the potential for unscrupulous employers to evade post-Brexit immigration rules. Meanwhile, a long-term rise in self-employment had left many workers outside most employment protections.
Its call for a radical overhaul of the enforcement regime echoed separate calls made last week by a cross-party group of MPs, who described poor enforcement and a failure to ensure “good work” for all as an economic risk.
The Resolution Foundation said the enforcement system had failed to respond to the greater risk of exploitation, noting that total spending for each employed person in the UK had flatlined since 2014. This was despite the fact that the number of labour market inspectors lagged behind international standards by two-thirds.
The think-tank also said that when employers had been found to have broken rules, financial penalties were too low to serve as a deterrent.
“Britain’s fragmented and weak system of enforcing labour market rights is costing workers billions a year and doing too little to prevent good firms being undercut,” said Lindsay Judge, research director at the Resolution Foundation.
The think-tank called on ministers to revive plans to replace the current patchwork of regulators with one enforcement body and give it a broader remit than envisaged. The watchdog’s extra powers could include a route for workers, unions and business groups to present “super complaints” if they identified systemic problems, it said.
The report follows a warning from the Employment Lawyers’ Association that enforcement of workers’ rights is at “breaking point”, with one-third of tribunal awards unpaid even when cases were decided in the claimant’s favour.
Meanwhile, the House of Commons business committee said “wholly inadequate” enforcement, combined with ministers’ failure to make the labour market more inclusive, posed a “growing economic risk” because of the post-Covid contraction in the UK workforce.
It cited the lack of repercussions for P&O Ferries after the company last year fired almost all its UK-based crew, as evidence of the government “send[ing] the wrong message to employers”.
Separately, Worker Info Exchange, a non-profit organisation, on Monday claimed that growing numbers of gig workers were falling victim to so-called robo-firing because of the use of “opaque black box technologies” that wrongly flagged them for fraudulent behaviour.
Its report set out the cases of 11 couriers whose contracts with Just Eat Takeaway were terminated because the food delivery company suspected them of over-claiming fees for delays at restaurants. WIE said Just Eat had not adequately substantiated these claims.
Just Eat disputes the report’s findings. The group said it took any concerns raised by couriers in its network seriously and would investigate if a courier felt they had been wrongly deactivated.
But it said it was also “important to ensure fairness for all couriers delivering on our behalf”, adding: “This is why we have measures and systems in place to identify and stop fraudulent activity on our platform and when couriers have breached the terms of their courier service agreement.”
A government spokesperson said that as well as working to ensure that existing bodies set up to protect workers’ rights were operating effectively, the government had also backed a number of reforms, including guaranteeing one week’s unpaid leave a year for carers, giving employees a right to request flexible working, extra redundancy protections for women, and a guarantee that hospitality staff get their tips in full.
These were brought forward in the form of private members’ bills because the government has decided it does not have parliamentary time for the employment bill it had initially planned.