Government to focus on employment status in labour market inquiry

Business, Energy and Industrial Strategy (BEIS) Committee to investigate employment status and workers’ rights in latest inquiry 

The government has launched an inquiry into the UK labour market as the economy battles post-pandemic worker and skills shortages.

It marks the latest strand of the BEIS Committee’s ongoing review of the labour market, with MPs to examine the challenges faced by workers and employers – notably, there is to be a focus on employment status and workers’ rights, amongst other things.

The findings are expected to inform the government’s strategy, as Westminster looks to support the labour market. Committee Chair, Darren Jones, commented:

“To give us the best possible chance we must make sure we have the right workers, with the right skills, in the right places. 

“That’s why we’ve launched an inquiry into what employers need to accelerate the recovery, what workers need for their own stability and growth, and how new technology can be harnessed in a fair and productive economy”, explained Jones. 

This inquiry comes at a time when record job vacancies (1.3m) and the employment rate (currently 75.6% versus 76.5% in February 2020) are hampering the post-pandemic recovery.

The review will be wide-ranging. Along with workers’ rights and employment status, it will examine the role of Artificial Intelligence (AI) in the workplace and the impact of an ageing population on the labour market.

 

Employment status: a shifting landscape

Many businesses engaging freelancers, contractors and self-employed workers will watch keenly for developments around employment status in the inquiry, which follows the Taylor Review into modern working practices. 

Specifically, the Committee will look to answer if  “current legal definitions of employment status, in light of recent judicial rulings, [are] still fit for purpose”, with the aim of offering further guidance on addressing the issues raised in the Taylor Review.

A focus on workers’ rights

Alongside employment status, the inquiry will investigate the landscape of workers’ rights and protections, and the opportunity to improve rights in the aftermath of Brexit and the pandemic. The government is hoping to understand how to strike the right balance between keeping a flexible labour market, but one that also protects workers.

This is in reference to the rapid rise of the gig economy and the high-profile employment status tribunals involving Uber drivers and Deliveroo riders – cases where confusion regarding employment status has resulted in financial and reputational damage for the businesses engaging these workers.

Additionally, the review will look at how to deter so-called “fire and rehire” tactics.
 

Other areas of focus 

Beyond the immediate knock-on effects of Brexit and the pandemic on the labour market, the inquiry will also focus on some longer-term areas of concern.

One such topic is artificial intelligence (AI). The review will seek to understand how AI is currently deployed in the workplace and whether its use improves productivity. 

It will also propose how the government can protect workers whose jobs may be threatened by automation, and if any new employment law is needed.

Alongside this, the government also wants to gain insight into how the labour market and economy – in particular the employment rate – will be impacted by the UK’s ageing population, as well as how the government can support workers near or at pension age.

The inquiry invites impacted stakeholders to share their perspective by the 8th July on the Committee website.