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Supply chains missing from Bill mean UK risks becoming dumping ground.

• Read the report
• Inquiry: Make Work Pay: Employment Rights Bill
• Business and Trade Committee

In a report today the BTC calls for the Employment Rights Bill, currently heading to report stage in its passage through Parliament, to close once and for all the loopholes that have allowed some companies to exploit work insecurity and undercut Britain’s outstanding employers.  

Scope

The Committee heard from business groups worried about the rising cost of doing business and  firms citing a need for labour flexibility. But the Committee found evidence, across business sectors and types, of exploitation enabled by work insecurity.

Workers on zero-hours contracts are most likely to be 16-24yr old females working part-time and in the accommodation and food sectors. On January 7th, the day the Committee heard evidence from McDonald’s, there were national news reports of fresh claims of harrassment and sexual misconduct. The BBC reported that more than 700 current and former junior employees are now taking legal action against the firm, accusing it of failing to protect them.

Evri put forward its “self-employed+” status with some benefits as a solution to the problems but the Committee’s evidence session brought scores of direct contacts from individual drivers accusing Evri of bad working practices that, like the McDonald’s allegations, are enabled by the lack of contract guarantees.  Evri refused to recognise the significant and consistent allegations in evidence in Parliament.

Amazon was unable to tell the Committee why its workforce went on strike, while Frasers Group’s Sports Direct confirmed over three quarters of the staff at its Shirebrook warehouse are agency workers, despite promising in 2016 to increase the proportion of staff on contracts.

The Committee is also concerned about the risk that unscrupulous companies might side-step reforms to zero-hours contracts by using agency workers. Evidence from companies like Uniqlo, Lush and Gymshark raised questions about firms using the multi-tiered system to drop down through the work benefits ranking, to engaging self-employed workers with even fewer benefits and protections than agency work offers.

There is also concern about what’s missing from the Bill. In a widely reported exchange in Parliament Shein repeatedly failed to answer a question about the source of cotton in products shipped to the UK. In subsequent correspondence it was confirmed that – unlike the US - the UK does not require legal assurances on the geographic origin of products. Likewise the FCA explained there is no requirement on investors interested in a listing on the London Stock Exchange to consider the risk of forced labour in a company’s supply chains - only make their own assessment of how material that risk is.

The checks are so weak the Committee says the UK is at “serious risk of becoming a dumping ground” if it does not align with tougher laws amongst UK allies, including blanket import bans from regions where forced labour prevails.

Recommendation

The Committee makes a series of five key recommendations to tighten up the Employment Rights Bill at Report Stage including the need to for ministers to:

1. Be explicit in law about precise reforms to end exploitative zero-hours contracts.
2. Accelerate, not slow down, reform of worker status and bogus self-employment.
3. Set out a clear plans to adequately resource the Fair Work Agency. New rights must also be explained to employers. The Committee calls on Acas to lead an information campaign to do this.
4. Modernise the ways unions are allowed to organise in the digital age to ensure appropriate rights of access for unions and equal time to present their case to workers.
5. Review and update the Modern Slavery Act to make modern slavery statements mandatory, to introduce penalties and to “name and shame” for companies not disclosing action plans.

Chair comment

BTC Chair Rt Hon Liam Byrne said “As we’ve travelled the country, our Committee has heard loud and clear that getting the right workers for the right roles is the number one challenge for British business trying to grow. It’s obvious we can’t fix that problem by letting rogue firms sidestep new rules and mistreat their workforce.

“We know that business is worried about the rising costs of employment but we also heard how Britain’s most outstanding employers are fantastic places to work with tried and tested ways to partner with their workforce. But we’ve also taken evidence about abuse of workers that has frankly horrified us.

“So we want ministers to make some strategic changes to the Employment Rights Bill to help make sure Britain’s best firms can no longer be undercut by rogue companies cutting corners and exploiting their workers.

“What is good for Britain’s workforce is good for Britain and good for British business. If we want Britain to become the fastest growing economy in the G7, then we need to help every firm rise to the level of the best of British. The Employment Rights Bill could help if ministers take action on our recommendations.”

Further information

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