New rights to protect gig economy workers: here's what they mean for you

17 December 2018

The government is setting out what it claims is the biggest package of workplace reforms for over 20 years to meet the challenges of the changing world of work and the growing gig economy.

Under the new legislation being introduced today, there will be fines for firms that victimise employees, while the loophole which enables firms to pay agency workers less than permanent staff is also being closed.

All workers – including those in the gig economy - will also receive a statement of rights setting out annual leave and pay entitlements.

The government plans to introduce 51 of the 53 recommendations laid out by Matthew Taylor, chief executive of the Royal Society of Arts, in his review of modern working practices.

However, there will no ban on zero hours contracts as this could hurt more people than it helps according to the report. 

Business secretary Greg Clark says: “The UK has a labour market of which we can be proud. We have the highest employment rate on record, increased participation amongst historically under-represent groups and wages growing at their fastest pace in almost a decade.

“This success has been underpinned by policies and employment law which strikes an effective balance between flexibility and worker protections but the world of work is changing, bringing new opportunities for innovative businesses and new business models to flourish, creating jobs across the country and boosting our economy.”

Here’s what the new rights mean for you

Under the new rules, tribunal fines will increase from £5,000 to £20,000 for employers who are demonstrated to have shown malice, spite or gross oversight.

The government has also scrapped the 'Swedish derogation' –  the loophole which currently allows agency workers to be employed on cheaper rates than their permanent counterparts.

The new legislation will extend the right to a day-one written statement of rights to workers, going further to include detail on rights such as eligibility for sick leave and pay as well as details of maternity and paternity leave.

The holiday pay reference period has been increased from 12 to 52 weeks, ensuring those in seasonal roles get paid time off they are entitled to.

'Undercutters’ charter'

Trade Union Congress general secretary Frances O’Grady says: “Scrapping the agency worker loophole is a victory for union campaigning. It was an undercutters’ charter.

However she adds that the reforms "won’t shift the balance of power in the gig economy".

“Unless unions get the right to organise and bargain for workers in places like Uber and Amazon, too many working people will continue to be treated like disposable labour.”

Labour’s shadow business secretary, Rebecca Long Bailey, adds: “This Conservative government has failed to support workers. Instead it has increased tribunal fees, attacked the health and safety of workers, introduced the draconian Trade Union Act and presided over the lowest wage growth in a decade.

“These proposals do nothing to tackle the growing number of people on precarious zero hours contracts.”

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