Photograph: Vuk Valcic/ZUMA Press Wire/Shutterstock
If you have a job, are you a worker or an employee? In everyday conversation, it is a distinction without meaning, and the two are usually taken to be synonymous and used interchangeably. In British law, though, workers and employees form discrete categories.
Legally, only an employee, who has a contract of employment, regular hours or shifts, and a guaranteed wage, enjoys full employment rights such as sick pay and maternity and paternity leave. A “worker”, often in casual, irregular or temporary work, possesses some of these rights, being entitled, for instance, to the national minimum wage and protection from discrimination, but is denied others, such as sick leave, protection against unfair dismissal, and statutory redundancy pay. The self-employed have no workers’ rights.
The distinction between “employees” and “workers” was codified by John Major’s government in the 1996 Employment Rights Act. It was a deliberate attempt to blur the line between an “employee” and someone “self-employed”, and to create a workforce more suited to a “flexible” labour market, establishing in essence a formal category of “insecure” workers.
Over the past quarter of a century, employers have taken full advantage of the flexibility afforded them, increasingly hiring workers on temporary, part-time or zero-hours contracts, and often as ostensibly “self-employed”, even if they are expected to work as normal employees. The most visible expression of this is the “gig economy”. However, the casualisation of labour extends, far beyond Amazon workers or Uber drivers. A recent report by the Living Wage Foundation estimated that 6.1 million workers were in insecure work – one in five of British workers. These included 1 million in temporary jobs and another million on zero-hours contracts.
A study last year by the thinktanks Autonomy and the Centre for Labour and Social Studies on the “Uberisation” of the British economy observed how “insecurity” had “become an endemic part of British working life”. The kind of precarity once associated solely with the gig economy now spreads through many employment sectors: health and care, hospitality, cleaning, hair and beauty, and even “previously protected middle-class jobs in academia”.
It was against this background that the Labour party pledged two years ago to erase the distinction between employee, worker and the bogus self-employed “by creating a single status of ‘worker’ for all but the genuinely self-employed”. All workers, “regardless of sector, wage, or contract type”, would be “afforded the same basic rights and protections”. This, as Labour’s green paper, A New Deal for Working People, observed, would ensure that employers would “no longer be able to treat their staff like regular employees while falsely claiming they are not, denying staff rights they are owed as employees”.
Now, Labour appears to have backtracked, reducing the pledge to a “consultation”. It is part of the attempt by the party to make itself “business-friendly” in the run-up to the election. Criticism of Labour’s original plans has focused on the supposed difficulties in formalising a distinction between “bogus” and “genuine” self-employed and on the harm that single status might do to businesses. Many countries – including France, Spain, Ireland and Australia – recognise only one category of worker and have no problem in distinguishing between an employee and someone self-employed.
When conservatives and business leaders talk of the “harm” of single status, what they mean is harm to the ability of employers to enforce low pay, poor conditions and a lack of rights, and to evade their responsibilities by categorising employees as being “self-employed”.
Labour’s deputy leader, Angela Rayner, says of the new deal paper that “far from watering it down, we will now set out in detail how we will implement it”, and that “we’ll tackle insecure work by banning zero-hours contracts, ending fire and rehire and ending qualifying periods for basic rights”. Given Labour’s track record of U-turns on a host of important policy pledges, one might be sceptical of Rayner’s breezy optimism.
To backtrack on single status is to diminish much of the power of policies such as the abolition of zero-hours contracts or the banning of fire and rehire. As Keith Ewing, professor of public law at King’s College London, and John Hendy, chair of the Institute of Employment Rights, have asked, if workers, as opposed to employees, have no protection against unfair dismissal, how will it be possible to ban the practice of firing and rehiring except for employees? Maintaining two sets of workers’ rights will, they point out, only “create an even greater incentive for employers to hire workers on precarious contracts”.
Introducing single status would neither end the exploitation of workers nor halt the gig economy. Nevertheless, it is important to enforce the rights of workers who are now denied them and to insist that all workers should possess the same rights. Abandoning the commitment to single status is to abandon workers who are in the most precarious and vulnerable jobs.
The pushback against single status has echoes of the objections in the 1990s to proposals for a minimum wage. In 1997, the Economist wrote of Labour’s plans that “there is much that is half-baked, or plain wrong. The minimum wage will cost jobs.” The CBI insisted that “even a low minimum wage would reduce job opportunities”. Michael Portillo called it “immoral” while Philip Hammond, later to be chancellor under Theresa May, told parliament that “the result of minimum wage legislation … will be to drive some small businesses into the black economy”. All eventually changed their mind.
The torrent of criticism aimed at the minimum wage proposal did have an impact. The level at which the minimum wage was set in 1999 by the Low Pay Commission was much lower than many campaigners had hoped for. So “modest” was it, in fact, in the words of Portillo, by now the shadow chancellor, that he felt able to reverse Tory opposition to the measure.
The meagreness of the minimum wage led to campaigns for a “living wage” (now statutory for those over 23) and a “real living wage”, based on the cost of living. Nevertheless, for all its defects, the principle of the minimum wage was important to maintain.
The principle behind single status – that workers’ rights should be universal, and not discriminate between types of employees – is even more important. It is a principle on which we cannot afford to backtrack.
• Kenan Malik is an Observer columnist
