Labour to use ‘fair pay agreements’ to deliver new deal for working people

Angela Rayner is expected to open Labour conference with an announcement that the party will use ‘fair pay agreements’ to deliver its new deal for workers in the UK, which will be signed into law within the first 100 days in government.

Addressing delegates on Saturday afternoon, the deputy leader is set to say it will be the “driving mission” of the next Labour government to end “poverty wages and insecure work” as she launches the party’s green paper on employment rights.

“Labour will make Britain work for working people. Work should provide not just a proper wage that people can raise a family on, but dignity, flexibility and security,” the Shadow Future of Work Secretary will tell conference.

“Better pay and more secure work is good for workers, good for businesses and good for the economy. Labour will deliver a new deal for working people so they get a fair share of the wealth they create, and within the first 100 days of the next Labour government we will sign this new deal for working people into law.”

Under fair pay agreements, worker and employer representatives are brought together by the government to establish and agree minimum pay, terms and conditions that will be binding on all employers and workers in that sector.

The party has said fair pay agreements are central to its plans for the economy. It says they will empower workers to act collectively, with agreements negotiated through collective bargaining starting with the adult social care sector.

375,000 workers in the care sector in England are currently employed on zero-hours contracts. Three quarters of them, more than 600,000 people, are paid less than the minimum wage for the hours they work.

“Working people don’t want a hand out from a minister sat in Whitehall. Workers want the power to stand up for themselves and demand their fair share and a better deal. The best way to improve the lot of working people is collectively, achieving more by the strength of our common endeavour than we achieve alone,” Labour’s deputy leader will say.

“The next Labour government will bring together representatives of workers and employers to agree fair pay agreements that will apply to every worker in each sector, starting in social care. Fair pay agreements will drive up pay, improve conditions in the workplace and stop bad bosses from exploiting their workers and driving down pay and standards for everyone.

“When Labour is in government there won’t just be a former social care worker and shop steward in the office of Deputy Prime Minister, working people will have a seat at the cabinet table and their voices will be heard. The next Labour government will end poverty wages and insecure work for good.”

Fair pay agreements, seen in other economies across Europe, work to effectively provide a ‘floor’ or a minimum level of good practice within the sector preventing businesses from undercutting other employers with better standards.

The announcement from Rayner follows that of the Labour government in New Zealand, which revealed the design of a new fair pay agreements system in May this year.

Labour’s green paper on employment rights includes measures that the party has argued will improve wages, job security and rights at work and boost productivity and enhance economic opportunity, health and wellbeing. They are:

• Raise the minimum wage to £10 per hour;
• Create a single status of ‘worker’ for all but the “genuinely self-employed”;
• Establish a right to flexible working for all from day one in job, alongside a ‘right to switch off’ outside of working hours;
• Ban zero-hours contracts, ending “one-sided flexibility”;
• Increase statutory sick pay and extending it to all workers, including the self-employed and those on low wages;
• End the use of fire and rehire tactics;
• Extend statutory parental leave, introducing a right to bereavement leave, strengthening protections for pregnant women and reforming the parental leave system;
• Update trade union legislation “so it is fit for a modern economy and so working people have strengthened rights and are empowered to organise collectively”;
• Establish a single enforcement body to enforce rights, inspect workplaces and bring prosecutions and civil proceedings against bad employers; and
• Introduce mandatory ethnicity pay gap reporting and requiring employers to report and eliminate pay gaps through action plans.

Ahead of Rayner’s speech, Andy McDonald argued that “instead of an employment model that delivers for working people”, the Conservatives have “ushered in one that means a race to the bottom on the backs of working people”.

The Shadow Employment Rights Secretary added: “Outsourcing, zero-hours contracts and agency work drive down pay, standards and conditions across our whole economy for everyone. It is high time that the key workers who got us through this crisis – and all working people – are given the dignity and security at work that they deserve.”

The deputy Labour leader’s speech at conference follows the party’s summer “new deal for working people” campaign, in which Keir Starmer and Rayner pledged to “fundamentally change our economy” and “make Britain the best place to work”.

Starmer wrote exclusively for LabourList in July to explain why the party was launching its campaign for a new deal for workers, and to set out how the party’s new deal for working people is based on “five principles of good work”.

Labour has highlighted that one in nine workers in Britain are currently in insecure work, and that households are now facing the recently announced rise in National Insurance contributions and the £20-per-week cut in Universal Credit.

The Low Pay Commission estimated that over 420,000 workers received less than the minimum wage in April 2019, while TUC analysis revealed two million workers are not receiving their legal entitlement to holiday pay, missing out on £3.1bn per year.