Government employment reforms are “Beecroft by the back door”, says the TUC

TUC General Secretary Frances O’Grady

Scrapping vital protections for agency workers and limiting the amount of compensation employees can receive for unfair dismissal will punish the victims of ill-treatment at work and let bad employers off the hook, says the TUC.

New measures announced today (Friday) by the Department for Business, Innovation and Skills (BIS), will see the government cut back on the enforcement of basic rights for agency workers, including the right to be paid in full and not to be charged upfront fees.

Commenting on the changes, TUC General Secretary Frances O’Grady said:

“These changes will remove vital safeguards for hundreds of thousands of agency workers, many of whom are employed on zero hours contracts. 

“Rogue employers will be delighted at the prospect of fewer inspectors coming around to check they are paying agency staff in full and not charging upfront fees.

“This government’s definition of a successful economy seems to be one that employs people on the minimum wage with no certainty of work or income. The trouble is that this great wage squeeze is bad for Britain’s businesses who will respond by reducing the hours and pay of their staff.

“The government’s approach adds up to a vicious circle of economic decline, when what we need are policies for growth. Beecroft by the back door is not the way to turn our economy around. ” 

The measures announced today by employment minister Jo Swinson will see resources cut for the  Employment Agency Standards Inspectorate which checks that agency workers are paid in full and on time. In addition, there will be fewer inspections to make sure that agency workers are not charged upfront fees by agencies for finding them work, and that they are not charged unreasonable fees for other services provided by agencies.

- In the future the compensation limit for unfair dismissal will be linked to an individual’s annual salary, subject to an overall cap of £72,400.  The TUC fears the new cap will disproportionately affect older workers who are likely to have difficulties in finding new work and who will not be properly compensated for loss of pension entitlements.