Employers avoiding obligations
In this report, the Committee highlights how the growth of new employment practices and business models has blurred definitions of employment status, which has resulted in some employers avoiding the obligations they have to their employees.
The report backs work carried out by the Work and Pensions and Business, Energy and Industrial Strategy Committees, and the findings of the Taylor Review published last year, and supports a number of recommendations to improve employment rights and provide robust mechanisms for protecting workers.
In the past decade, employment practices have changed drastically with the growth of flexible working and increased use of business models which rely on self-employed workers. While these arrangements can be beneficial to both workers and employers they can also be used to avoid some of the responsibilities that employers owe their workers. For example, at present individuals can work the same weekly hours for the same employer on a long-term basis but if they are on a zero hours contract will have no guarantee of work on a week-to-week basis. The Committee concludes that, in this situation, workers must have the right to request a contract which more accurately reflects the reality of employment.
To strengthen the rights available to workers and employees, and enforcement of those rights, the Committee has recommended that the Government:
- extend the right to a written statement of terms and conditions to all workers
- clarify employment status in primary legislation
- create a right for workers who have been on zero hours contracts for 12 months to be able to request a contract which reflects actual hours worked
- commission the Low Pay Commission to consider a higher minimum wage for hours which are not guaranteed
- commission a study to assess the extent of unfair or illegal employment practices in Scotland
- bring forward stronger and more deterrent penalties, including punitive fines, for repeat or serious breaches of employment legislation, and expand “naming and shaming” to all non-accidental breaches of employment rights
- work with trade unions to establish the current extent of blacklisting, and take action to eradicate it if is found still to exist
The Committee notes the joint responsibility the UK and Scottish Governments have in creating an economy and labour market that supports meaningful employment.
The Committee urges the UK Government to set out which aspects of its recently announced industrial strategy will apply to Scotland, and explain how the proposed Ministerial Forums on Industrial Strategy - which are intended to bring together UK ministers with ministers of the devolved administrations - will work in practice.
The Committee also notes concerns about the funding which has been transferred to Scotland to support the devolution of employment support programmes, and has called for the UK Government to consider the case for providing extra support to enhance these programmes.
Launching the report, Committee Chair, Pete Wishart MP commented:
"The workplace in Scotland is changing fast with the advent of the gig economy and the increase in flexible working. It is therefore important that our employment legislation keeps pace with this evolving environment. It is also important that employers continue to respect the rights of their workers. While most employers do, it is clear there are instances where some employers either do not recognise the proper employment status of their staff, or fail to accord them their legal employment rights. We also remain concerned about the way in which flexible contracts – such as zero hour contracts - can be used exploitatively.
It is clear that one of the major challenges for the current employment framework is that it is based on legal definitions of employees and workers which were drafted decades ago, and it is clear that they do not provide the level of clarity which is needed in light of new business models and working practices that have only emerged in the past five years.
We are calling on the Government to improve the statutory definitions for employment status, and to take forward a number of recommendations - many of which reflect recommendations which were also made by the Work and Pensions and Business, Energy and Industrial Strategy Committees, and the Taylor review - which would improve the rights of workers and employees, and ensure that they are enforced. The Government should be prepared to revisit legislation to make sure it reflects modern work and allows people to access the rights their employment patterns merit.
While we welcome the Government’s response to the Taylor review, the Government needs to move quickly to implement its recommendations, and also needs to look at its own duties to enforce employment rights."