[IER] 5m workers have no means to enforce rights with ‘parent company’, research shows

Fri Apr 6 18:03:17 BST 2018

IER News Brief 06/04/18Follow us on Twitter 
news brief
Friday 06th April 2018
Five million workers cannot enforce their rights to the National Minimum Wage or holiday pay with 'parent' companies because they are outsourced or working for a franchise.

This is according to research by the TUC, which found 3.3 million are employed through an outsourced company; 615,000 work for franchised businesses (such as McDonalds outlets); and at least 1 million are hired through recruitment agencies, umbrella companies and personal services firms.

In practice, this means that a McDonalds worker cannot take McDonalds to court for non-payment of the minimum wage because they are employed by the franchise owner, rather than the parent company. Similarly, the NHS is not liable for the workers' rights of hospital cleaners that are outsourced to another company.

The TUC has called on the government to change the law in order to be more like Australia's Fair Work legislation, which makes franchising companies liable for the staff working in outsourced outlets.

Frances O'Grady, General Secretary of the TUC, explained that joint liability between immediate employers and umbrella companies will force businesses to take responsiblity for the rights of those people who work hard to that make their profits.

"Employers have a duty of care to workers in their supply chains. They shouldn't be allowed to wash their hands of their responsibilities. Joint liability must be extended to parent employers. Without it they can shrug their shoulders over minimum wage and holiday pay abuses," she said.

The Institute of Employment Rights agrees that employment law must adapt to an increasingly fragmented workplace, and that people employed by agencies should not be provided with lesser protections than those hired directly.

As well as recommending, in our Manifesto for Labour Law, that a new universal status of 'worker' is introduced to give all people in employment access to the same rights; we have argued that health and safety laws should be updated to make sure that liability is extended to supply chain heads where appropriate.

In 2017, Phil James and David Walters authored IER report Health and Safety at Work: Time for Change, which argued that the fragmentation of the workforce has meant current health and safety legislation no longer protects millions of workers. The authors set out proposals for reform.

Read more about our Manifesto for Labour Law

Read more about Health and Safety at Work: Time for Change 
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> click here to read full story5 million workers have no right to enforce rights with ‘parent company’, research shows 
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The world of work is changing. Fast. But the framework of law tasked with protecting the health, safety and well being of workers is now 50 years old and – according to the authors of this report – no longer fit for purpose. As a result, work continues to generate large and unacceptable levels of harm, despite the massive reductions of employment in high-risk areas of work like manufacturing, docks, steel and mining. The authors conclude that the time has come to repeal the 1974 Health and Safety at Work Act and to fundamentally reform the current framework of law governing workplace health and safety. To support this conclusion, the authors measure the appropriateness of the Act against four central issues: the Act’s application to today’s employment patterns and structures; the oversight and enforcement of employer compliance with their legal duties; worker access to representation on health and safety issues; and the overall governance and resourcing of our regulatory bodies. Looking to the future, the authors offer a number of informed policy recommendations based on good international practices.

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> click here to read more and book your placeLondon: The Future of Labour Law: Progressive rights under a progressive government
10 May 2018 - 09:30 - 15:00
Unite the Union, London
At this conference, key authors from our Manifesto for Labour Law team will guide delegates through our proposed reforms, the evidence behind them, and the benefits for workers, employers and the economy of reform.
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