HM Insights

Is your business respecting the employment rights of its workers?

A recent report from the independent think-tank, the Resolution Foundation, has highlighted that many workers – particularly young workers – are not receiving their fundamental entitlements in the workplace and are not taking steps to enforce their rights.

The last decade has seen a significant increase in new platforms, short-term and unpredictable work arrangements, commonly referred to as the "gig economy", together with the demise of cornerstone sectors such as high street retail.

The Resolution Foundation has published a three-year research project on labour market enforcement, focusing on highlighting the types of group, job and firm based characteristics that are at a greater risk within today's workplaces.

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The Resolution Foundation Key findings

The report focused on three key findings:

  • 23% of those aged 25 or over, who are covered by the National Living Wage and National Minimum Wage, were underpaid in 2018;
  • one in 20 workers did not receive any holiday pay, despite being legally entitled to at least 5.6 weeks a year; and
  • almost one in 10 workers do not get a payslip, a legal requirement under the Employment Rights Act 1996.

The analysis also found that the same groups of people appear to be at risk of each type of violation; young people, older workers, those who work in smaller firms and those who were on zero-hour or temporary contracts.

To address this, the report focuses on how their findings could help with a strategic approach to enforcement and whether the state relies too heavily on the individual at risk being the enforcer.

What do these findings tell us?

In finding where the risk lies, it allows the relevant state bodies to consider a more tailored approach in tackling non-compliant behaviour. For bodies such as HMRC and the Employment Agencies Standards Inspectorate, who have been struggling due to a lack of resource, strategic targeting is very important.

Although there have been measures and funding put in place to support such organisations the current system is still reliant on individuals stepping forward and raising their concerns, whether it is formally or informally. The Report also looks at the type of workers who are likely to make an application to the employment tribunal. The results have found that while younger and atypical workers are at a higher risk, they are the least likely to step forward and raise a claim.

Education and enforcement

The report has therefore highlighted the importance of education and enforcement. It concludes that employers need further clarification on what their obligations are, and employees need to understand their rights. However, it also notes that this alone will not solve the problem.

Those who are most at risk are those who are least likely to take formal action, predominantly out of fear that they will lose their job. This is perhaps symptomatic of the more fluid concept of employment and the rise of the gig economy.

Interestingly it is, though, workers in hotels and restaurants (rather than some of the newer sectors) who are more still more likely not to receive their legal entitlements.

Get in touch

In many circumstances, it is lack of knowledge of legal rights and obligations that lead to the failure to comply with employment law.

In light of the potential legal risks, if you are an employer, of any size, who wishes to discuss obligations and compliance, please contact one of our employment team.

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