Labour announces plan to create single ‘worker’ status with rights from day one

Labour has announced plans to give people security in employment with the creation of a single ‘worker’ status, encompassing all but the genuinely self-employed, affording employees rights and protections from the first day of work.

The policy proposal unveiled by the party today would see many more workers receive rights such as access to statutory sick pay, the national minimum wage, holiday pay and paid parental leave, as well as protection against unfair dismissal.

Commenting on the plan this evening, Labour’s Andy McDonald said: “Millions of workers are in insecure employment with low pay and few rights and protections, particularly key workers whose efforts got the country through the pandemic.

“A lack of basic rights and protections forces working people into poverty and insecurity. This is terrible for working people, damaging for the economy, and as we have seen throughout the pandemic, devastating for public health.”

The Shadow Employment Rights and Protections Secretary added: “We need a new deal for working people. Labour would ensure that all work balances the flexibility workers want with the security they deserve.”

There are three separate employment statuses under the current legislation: ’employee’; ‘limb (b) worker’, (also known as simply a ‘worker’); and ‘self-employed’. Each category has differing levels of rights and protections.

Labour is proposing a single legal status that would encompass employees, limb (b) workers and those in ‘bogus’ self-employment. The party has said that genuinely self-employed people would retain their separate status.

Reacting to the policy, Momentum co-chair Gaya Sriskanthan said the policy “would change the lives of millions for the better overnight and it is exactly the kind of bold vision that can unite working people from Hackney to Hartlepool”.

The announcement today follows several cases involving companies claiming their staff are self-employed. The Supreme Court found against Uber in February, ruling that its drivers were not self-employed and were entitled to certain rights.

High-profile cases such as that one have fuelled widespread concern over employers exploiting the current differentiation between workers, with bosses putting their staff in categories where they are entitled to fewer rights.

There are 4.2 million self-employed people in the UK, including those wrongly classified as self-employed. They do not qualify for sick pay. An additional 1.9 million people, who are in work, are also not able to claim sick pay when they fall ill.

Low-paid workers are not entitled to statutory sick pay as the ‘lower-earnings limit’ requires an income of £120 a week for people to qualify. Labour has said it would remove the requirement and extend the statutory provision to everyone.

Recent TUC research found that one in 12 key workers do not currently qualify for sick pay, including more than a quarter of cleaners (27%) and retail workers (26%), nearly one in ten teaching assistants (9%) and over one in 20 care workers (6%).

The report from the trade union federation also found that extending statutory sick pay to all workers by removing the lower-earnings limit would cost the same as 1% of the budget that the government has provided for NHS test and trace.

Fabian Society analysis last month showed that the cost of raising sick pay to the equivalent of the real living wage for employers without an occupational sick pay scheme would be around £110 per employee per year, or just over £2 a week.

Around one in nine workers in employment in the UK, 3.7 million people, are in insecure work (without a guaranteed salary). These include those often referred to as ‘gig’ workers, people employed on zero-hour contracts or through agencies.

Disabled, BAME and female workers are more likely to be in insecure work and a high proportion are key workers, including 15.6% of caring, leisure and service staff, 18.5% of those in skilled trades and 6% in ‘professional’ roles.

The announcement also comes after the launch of Labour’s campaign for a “new deal for working people” on Monday, with Angela Rayner and Keir Starmer pledging to “fundamentally change our economy” and “make Britain the best place to work”.

The Labour leader wrote exclusively for LabourList on Monday to explain why the party has launched the new campaign, which is based on five principles – “security at work”, “quality jobs”, “a fairer economy”, “opportunity for all”, “work that pays”.