Agency workers to be included in zero-hour contracts ban

A ban on zero-hour contracts will apply to agency workers, and umbrella companies will be regulated, under Government plans to strengthen workers’ rights.

The Government is tabling amendments to its Employment Rights Bill after consultations with business groups and trade unions.

Business Secretary Jonathan Reynolds also set out moves to “align” trade unions with modern work practices and extend statutory sick pay.

Agency workers will be included in a crackdown on zero-hour contracts so that such work does not become a “loophole” in the plans, Mr Reynolds said.

“The Government believes that every worker should be able to access a contract which reflects the hours they regularly work.

“We believe this should extend to agency workers, not only to offer them greater certainty of hours and security of income, but to also ensure that agency work does not become a loophole in the plans to end exploitative zero-hours contracts,” the Business Secretary said.

Collective redundancy rules will also change to increase the maximum period of protective award from 90 to 180 days.

This will mean employment tribunals can grant larger awards to employees when an employer fails to meet requirements during redundancy consultations.

And umbrella companies, which Mr Reynolds said leave many workers unaware of who is responsible for their rights or whether they are entitled to any, will be regulated over employment rights.

The Government also plans to update the framework for trade unions to “align it with modern work practices”, Reynolds said.

This aims to remove unnecessary restrictions on trade union activity and create a system that “balances the interests of workers, businesses and the wider public”.

The amendments aim to streamline the process for unions to gain recognition from employers, extend the expiry of mandate for industrial action from six to 12 months and ensure that trade unions provide a 10-day notice period for industrial action.

Statutory sick pay will also be strengthened to make it a legal right for all workers.

About 1.3 million people paid less than £123 per week in the UK will get guaranteed sick pay equivalent to 80% of their weekly salary as part of changes expected to come in next year.

They will get 80% of pay or the new rate of statutory sick pay, whichever is lowest.

The GMB union’s general secretary said the Bill was “far from perfect” but a “massive step forward”.

The Resolution Foundation said low-paid workers stood to gain the most from the changes.

Nye Cominetti, principal economist at the think tank, said: “The Government’s employment rights reform agenda will, if successfully implemented, amount to the biggest shake-up of UK workplaces in a generation.

“While all workers are covered by new rights and expanded sick pay, in reality, low-paid workers stand to gain most as their job security is far lower than that enjoyed by middle and higher earners.

“The provisions being proposed today will improve the quality of many people’s lives. But the scale of change they’d bring about in low-paying sectors like retail and hospitality means they should be implemented carefully.

“Workplace reform shouldn’t end with this Bill either. Today’s provisions should be reinforced by greater clarity over workers’ employment status, and better enforcement of workplace rights.”