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Single Status of Worker

I beg to move,

That this House has considered the potential merits of creating a single status of worker.

Good afternoon, Mr Efford; it is a pleasure to see you in the Chair. I am grateful for the opportunity to draw attention to an issue that has the potential to transform the world of work for millions of people up and down the country.

The Government’s plan to make work pay was one of our central policy commitments at the last general election. I was proud to play an important part in shaping the package and begin delivering on it in government. As a result of changes that this Government have made, the lives of working people are already improving. Minimum wage rates now take account of the cost of living, which is massively important to people on low incomes in this time of rising energy and fuel costs. Fathers are now entitled to paternity leave from day one; they no longer have to wait months to accrue that important right. Statutory sick pay is also now an entitlement from day one, and the lower earnings limit and the waiting period have been removed. This transformation of the world of work will continue as measures in the Employment Rights Act 2025 come into force over the coming months and years.

However, noticeably absent from that list is the promise that we made to the electorate to move towards a single status of worker, on which we committed at the election to launch a consultation in the first year of government. We are approaching the end of the second year with no further indication of when there will be a consultation or, indeed, whether there will be one at all. I understand that the focus of most of our time in office has been the mammoth process of passing and implementing the Employment Rights Act. I know only too well how significant an undertaking that has been and I commend the work of officials in the Department for Business and Trade to pass that transformative Act within less than 18 months of our entering office.

Although the Act has been implemented, we must not forget that a number of commitments in the plan to make work pay fall outside its scope. They include changes to the parental leave system and carer’s leave, reform of TUPE, the review of health and safety guidance, changes to allow collective grievances, and what we are debating today—the commitment to move towards a single status of worker. I know that steps have been taken to implement change in some of those areas, and I would welcome a substantive update from my hon. Friend the Minister on the progress being made to deliver on all the commitments in the plan to make work pay.

The need to deal with worker status has been an issue since long before we entered office. It is almost nine years since the publication of “Good Work: The Taylor Review of Modern Working Practices”, which made some proposals on status, and more than seven years since the then Conservative Government accepted that changes needed to be made. It is a matter of record that nothing has been done since then to implement those proposals. It has therefore long been recognised that employment status is overly complicated, outdated and no longer reflective of the complexities of the modern labour market. We will see whether we can reach consensus on the solution, but we should at least begin to try to address it.

It might be helpful if I set out the current legal framework. I hope that that will demonstrate the need for reform and why this is a complicated area that requires careful consideration. First, there are those who are classed as employees, who receive almost all working protections, depending on service length. Then there are workers, or limb (b) workers—under section 230(3)(b) of the Employment Rights Act 1996—who have access to some working protections, such as the Working Time Regulations 1998 and the minimum wage, but not others. And then there are the self-employed, who have no rights to working protections.

In practice, differentiating each status can be tricky, and reliance has been placed on court cases to establish the boundaries between them. It can therefore be a significant challenge for an individual to understand under which status their employment falls. If they do not readily know the answer, it can be difficult to enforce their rights without legal support. Matthew Taylor noted pithily in his report that

“without an encyclopaedic knowledge of case law, understanding how this might apply to your situation is almost impossible.”

People’s status and their rights under it should not be subject to their willingness to fight, sometimes for years, through an employment tribunal.

It might be said that people’s status and rights ought to be obvious from day one of their employment. For many that is true, but it does not recognise the explosion in what might be described as gig economy-type work in the past 15 years or so. By the end of the previous Administration, the number of people classed as being in insecure work stood at about 4 million, according to a TUC analysis. That represented a growth of about 1 million during the Tories’ time in office. Job growth in that period was driven largely by a rise in insecure work, which increased three times faster than secure forms of employment. Of the 4 million in insecure work, the TUC found that about half were low-paid self-employed, and many of them were unlikely to be genuinely self-employed at all.

During that period, the emergence of platform work saw the size of the gig economy explode. His Majesty’s Revenue and Customs estimates that there were 1.6 million people working in the gig economy by 2022. Advances in technology, combined with ageing status laws, have allowed employers to avoid their responsibilities by advertising for positions that are described as for a “worker” or for the “self-employed” but, in reality, have all the hallmarks of direct employment.