Workers rights: Don’t let ‘rogue’ firms undercut good employers, MPs urge
Changes to the government’s workers’ rights package should be made to ensure “rogue firms” don’t undercut Britain’s best employers, MPs have urged.
The Employment Rights Bill, which is currently making its way through Parliament, should have loopholes closed to avoid some companies exploiting work insecurity, the House of Commons Business and Trade Committee (BTC) has recommended.
MPs are warning that the bill’s lack of rules over forced labour in supply chains risks making the UK a “dumping ground” for bad practices.
Committee chairman Liam Byrne said: “[We’ve] heard loud and clear that getting the right workers for the right roles is the number one challenge for British business trying to grow.
“It’s obvious we can’t fix that problem by letting rogue firms sidestep new rules and mistreat their workforce.
“We know business is worried about the rising costs of employment but we also heard how Britain’s most outstanding employers are fantastic places to work.
“We want ministers to make strategic changes to the bill to help make sure Britain’s best firms can no longer be undercut by rogue companies cutting corners and exploiting workers.”
MPs’ report
In a report published today [Monday], the committee outlined how business groups are worried about the rising cost of doing business and firms cited a need for labour flexibility.
However, MPs also heard evidence of exploitation enabled by work insecurity, including issues with zero-hours contracts.
Girls and women aged 16-24 were most likely to be in zero-hours roles, especially part-time and in the accommodation and food sectors.
The report said on January 7, the day the committee heard evidence from McDonald’s, there were national news reports of fresh claims of harassment and sexual misconduct.
The BBC reported that more than 700 current and former junior employees are now taking legal action against the firm, accusing it of failing to protect them.
MPs said Evri put forward its ‘self-employed+’ status with some benefits as a solution to the problems, but highlighted “individual drivers accusing Evri of bad working practices that, like the McDonald’s allegations, are enabled by the lack of contract guarantees”.
The committee also said Amazon was unable to tell the MPs why its workforce went on strike, while Frasers Group’s Sports Direct confirmed over three quarters of staff at its Shirebrook warehouse are agency workers, despite promising in 2016 to increase contracts.
Shein concerns
The committee also cited concerns about the risk of companies side-stepping reforms to zero-hours contracts by using agency workers.
It also comes as Shein repeatedly failed to answer a question in Parliament about the source of its cotton in products shipped to the UK.
It was later confirmed that – unlike the US – the UK does not require legal assurances on the geographic origin of products.
While the Financial Conduct Authority (FCA) explained there is no requirement on investors interested in a listing on the London Stock Exchange to consider the risk of forced labour in a company’s supply chains – only make their own assessment of how material that risk is.
And the committee warned the UK was at risk of “becoming a dumping ground” if it did not align with tougher laws amongst UK allies, including blanket import bans from regions where forced labour prevails.
Key recommendations include for ministers to make the law explicit about reforms to end exploitative zero-hours contracts; accelerate reform of worker status and bogus self-employment; set out a clear plan to resource the Fair Work Agency; modernise how unions are allowed to organise; and review and update the Modern Slavery Act.
A Shein spokesperson directed City AM to the company’s latest letter to the business committee.
Yinan Zhu, general counsel for EMEA, wrote that there were “no legal restrictions on the geographical origin of cotton used in products sold in the UK” but insisted that all Shein products “benefit from our robust supply chain management policies and programmes”.
She also said “cotton is an extremely minor part of our business relative to other materials”, but nonetheless “we ensure that we have the necessary safeguards and protections”.
Zhu stressed that “any case of underaged labour is abhorrent” and Shein imposed “blanket prohibition on forced labour and child labour globally”, resulting in “immediate termination”.
She added: “We will continue to work tirelessly to ensure that these isolated cases are removed from our supply chain entirely in future.”
Firms’ response
A spokesperson for Evri said: “We’re committed to ensuring that Evri is a great business to work for. That is why we’ve been proud to lead the industry in offering self-employed workers greater protection and benefits since 2019, whilst maintaining a flexible working model.
“All our couriers earn above the national minimum wage with earnings, on average, 30% higher. Our Self-employed + courier model remains the UK’s only union GMB-backed courier initiative which provides pensions and, holiday and sick pay.
“We regularly audit our practices and couriers have numerous ways to raise any concerns which will always be fully investigated.”
A McDonald’s spokesperson said: “Ensuring the 168,000 people that work in McDonald’s restaurants are safe is the most important responsibility for both us and our franchisees, and we have undertaken extensive work over the last year to ensure we have industry leading practices in place to support this priority.
“Any incident of misconduct and harassment is unacceptable and subject to rapid and thorough investigation and action.
“Our relentless focus on eliminating all forms of harassment at McDonald’s is led by a newly created team and informed by the experience and guidance of external experts.
“We are confident that we are taking significant and important steps to tackle the unacceptable behaviours facing every organisation.”
Amazon and Sports Direct have been approached for comment.
Wider reaction
Meanwhile, Ben Willmott, head of public policy at the Chartered Institute of Personnel and
Development (CIPD), said the government needed to do more to “ensure that employment rights are being upheld [and] to support employers in complying with new laws”.
He called for more resources for the Fair Work Agency, and Acas, an industrial relations strategy to support partnership between employers, unions and lobby groups, including a new code of practice, and an implementation plan “to avoid more workplace disputes and a sharp increase in employment tribunal claims”.
And TUC general secretary Paul Nowak added that the union welcomed “the call for the government’s new Fair Work Agency to have the powers and resources it needs to stop good employers from being undercut by the bad”.
And he added: “We are pleased MPs recognise the importance of swiftly reforming worker status – to stop unscrupulous employers from exploiting loopholes.
“These common sense reforms will bring us closer to the European mainstream on workers’ rights.”
Byrne added: “What is good for Britain’s workforce is good for Britain and good for British business.
“If we want Britain to become the fastest growing economy in the G7, then we need to help every firm rise to the level of the best of British.
“The Employment Rights Bill could help if ministers take action on our recommendations.”