The government has vowed to modernise zero-hour and agency workers’ rights, in response to last year’s Taylor Review into working practices.
Changes will include enforcing holiday and sick pay for the first time, as well as the right to a payslip for all workers.
It will also bring in the right for all workers to request a more stable contract for greater financial security. Fines for employers breaching contracts or mistreating staff will be quadrupled to £20,000.
Prime minister Theresa May said: “We recognise the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK’s position as one of the best places in the world to do business.
“We are proud to have record levels of employment in this country but we must also ensure that workers’ rights are always upheld.
“Our response to this report will mean tangible progress towards that goal as we build an economy that works for everyone.”
The government is also asking the Low Pay Commission to consider higher minimum wage rates for workers on zero-hour contracts.
Around 1.2 million agency workers will be entitled to a breakdown of who pays them and any costs deducted from their wages.
The government will monitor and report on quality as well as quantity of jobs in the economy and take steps to make sure flexible workers are aware of their rights.
Business secretary Greg Clark said: “The Taylor Review said that the current approach to employment is successful but that we should build on that success, in preparing for future opportunities.
“We want to embrace new ways of working, and to do so we will be one of the first countries to prepare our employment rules to reflect the new challenges.”
The news that the government is “putting quality of work alongside quantity of work” was welcomed by Tom Ironside, director of business regulation at the British Retail Consortium (BRC).
However, Ironside stressed that the flexible nature of non-contracted roles should not be undermined by any changes: “Retail colleagues repeatedly report that flexibility is a key driver for working in the industry so it is important that the labour market flexibility currently offered is not undermined. In particular, we are concerned that a higher rate of pay for non-contracted hours could lead to a reduction in flexibility.”
Meanwhile Helga Breen, partner and London head of employment at law firm DWF, highlighted concerns that the government’s proposals could burden businesses with added cost pressure.
She said: “With a reliance on zero hour contracts and agency workers to supply a truly agile workforce, businesses – who are already suffering a gig economy induced headache – are bracing themselves for further hardship now the government intends to implement almost all of the suggestions made in the Taylor Review.
“The UK workforce is evolving and flexibility is now key for workers and businesses alike. But the exploitation of workers is wrong and hinders business’ ability to attract top talent at a time when the labour supply is facing a drought. With this in mind, the codification of tests for employment status and the reform of the regulations on zero hours contracts and agency workers proposed by the government are particularly controversial, since they may involve increased costs to businesses across a wide variety of sectors.”