United Kingdom: Latest working life developments – Q1 2018

Brexit negotiations, the Government’s response to the Taylor Review on modern working practices, a legal case in the gig economy and the easing of the public sector pay cap in the National Health Service (NHS) are the main topics of this article. This country update reports on the latest developments in working life in the United Kingdom (UK) in the first quarter of 2018.

Brexit negotiations

On 19 March 2018, the UK and the European Union (EU) settled a ‘large part’ of an agreement to bring about the Member State’s ‘orderly withdrawal’ from the EU. An announcement by European Chief Negotiator Michel Barnier and UK Brexit Secretary David Davis confirmed a ‘decisive step’ forwards in several areas. First, they set dates for the post-Brexit transitional period (20 March 2019 – 31 December 2020). Secondly, they agreed to uphold all rights and guarantees enjoyed by citizens who relocate or travel between the UK and the EU during the transitional period. Third, the UK will be able to negotiate, sign and ratify its own trade deals throughout this time. Fourth, during transition, the UK will participate in EU trade deals with other countries. Finally, Northern Ireland will continue to participate in aspects of the single market and the customs union, in the absence of other solutions, ensuring there will be no hard border with the Republic of Ireland.

Government’s response to the Taylor Review

In October 2016, Prime Minister Theresa May, commissioned the Taylor Review into Modern Working Practices following revelations of poor working conditions in companies such as Sports Direct and Amazon, and amid concerns about employment rights for gig economy workers. The Government’s delayed response, published on 8 February 2018, included proposals to give workers the right to request ‘a more stable contract’ and a new naming scheme for employers who fail to pay employment tribunal awards. However, ministers faced criticism for failing to bring UK law into line with recent tribunal rulings on employment cases. In particular, proposals stopped short of granting gig economy workers full employment rights, including, for example, paid holiday, sick leave and the minimum wage. Citing the issue’s complexity, the Government has instead promised a new ‘consultation examining options, including new legislation, to make it easier for both the workforce and businesses to understand whether someone is an employee, worker or self-employed’.

Following the Taylor Review, the Government also launched consultations on three topics: increasing transparency in the UK labour market; improving pay and conditions for agency workers (repealing the Swedish Derogation); and enforcing employment rights. The Government’s response has been strongly criticised by the opposition Labour Party and by trade unions.

‘Gig economy’ developments

On 28 February 2018, the Independent Workers Union of Great Britain (IWGB) won a recognition case at the Central Arbitration Committee (CAC) against courier firm The Doctors’ Laboratory (TDL), becoming the first trade union to be recognised for collective bargaining in a gig economy company. IWGB had secured worker status for TDL couriers in June 2017 (TDL had unlawfully described workers as independent contractors). In February 2018, a settlement granted full employment rights to some TDL couriers. On 28 February, CAC recognised the union’s right to engage in collective bargaining without a ballot, as a majority of workers (55.6%) were union members. The CAC rejected the employer’s demand for a ballot in the interests of good industrial relations. IWGB also launched a £1 million holiday pay claim against TDL on behalf of 50 couriers.

Further easing of public sector pay cap

There was further easing of the Government’s cap on public sector pay when, on 14 March, leaders from twelve unions and NHS Employers agreed a pay deal for around 1.3 million NHS staff (all staff except doctors, dentists and senior leaders). The agreement offers increases of at least 6.5% over three years, and as much as 29% for the lowest paid workers. Both employers and unions have also agreed to reduce the high sickness absence rates in the NHS. Staff have up to 5 June to vote on the deal. The development signals further easing of a pay cap, first introduced in 2010 as part of the austerity agenda. Since 2013, rises have been capped at 1%, with this limit due to last until 2020. However, the pay deal for health workers follows a September announcement promising to lift the pay cap for police and prison officers. 

Commentary

Progress on Brexit negotiations mean the UK and EU have provisionally agreed on the most important ‘divorce’ issues, allowing talks to move on to future relations. 

The Government’s reaction to the Taylor Review undoubtedly disappointed those hoping for substantial reforms to employment rights. On the contrary, the response emphasised a need to preserve labour market flexibility, to avoid burdening employers, and to avoid restricting individual choice. Nevertheless, with employees and unions continuing to challenge gig economy firms in court, the matter looks far from settled.

Meanwhile, compromises on public sector pay reflect a Government keen to maintain domestic harmony during Brexit talks.

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