Labour’s new legislative agenda promises enhanced rights and flexibility for workers. However, a lack of engagement with self-employment experts, advisers and freelancers before decisions are made could lead to financial ruin for the millions of self-employed on zero-hours contracts. Commentators serving the self-employed offer their responses following King Charles’ speech to Parliament this week
In a significant address this week King Charles outlined Labour’s priorities and legislative agenda, emphasising plans to ban exploitative working practices and enhance employment rights. This speech, marking the State Opening of Parliament, comes on the heels of Labour’s victory in the recent general election.
Key among Labour’s commitments is the introduction of an employment rights bill within the first 100 days of the new government. This bill aims to implement the policies outlined in Labour’s New Deal for Working People, which include making flexible working the “default from day one for all workers” and establishing a “genuine” living wage that reflects the cost of living.
“Exploitive” zero-hours contracts: what do they look like?
The proposed employment rights bill will also address exploitative zero-hours contracts, the controversial ‘fire and rehire’ practices, and strengthen statutory sick pay by removing the lower earnings limit and waiting period. Labour’s commitment to a comprehensive reform of employment practices was first articulated in their general election manifesto and reiterated in the King’s speech.
Dave Chaplin, CEO of ContractorCalculator, offered a critical perspective on the proposed changes, particularly the plan to ban exploitative zero-hours contracts. “Whilst protecting vulnerable workers is important, what does getting rid of ‘exploitative’ zero-hours contracts mean as many people are engaged on a payment-for-work-done contract, which is a zero-hours contract in essence,” he said.
According to an IPSE survey the UK’s solo self-employed sector contributes an “impressive” £278 billion to the UK economy each year. Highly skilled freelancers are estimated to provide approximately £126 billion of the £278 billion that solo self-employed workers generate – accounting for 45% of the overall contribution.
Shackling the flexible workforce with more legislation impedes growth
Dave Chaplin, CEO ContractorCalculator
Chaplin said legislation might not be the best solution, suggesting instead an increase in the minimum wage for zero-hours-based work to drive more secure employment contracts.
Chaplin also warned against the potential negative impact of increased regulation on the self-employed and freelance workforce. “Shackling the flexible workforce with more legislation impedes growth,” he said, advocating for policies that support rather than hinder freelancers and contractors.
A broad-stroke approach to banning zero-hours workers needs a careful approach.
Crawford Temple, CEO of Professional Passport,
Crawford Temple, CEO of Professional Passport, echoed the need for a balanced approach. While supporting measures to protect workers from exploitation, he stressed the flexibility that zero-hours contracts can offer businesses and workers. “A broad-stroke approach to banning zero-hours workers needs a careful approach,” Temple advised, urging Labour to consult with industry experts before implementing such measures.
Temple also highlighted the absence of specific references to combating tax avoidance in the King’s speech, despite Labour’s campaign pledges. He called for Labour to prioritize efforts to address tax avoidance, particularly in the umbrella industry where workers are often misled into tax avoidance schemes.
Benefits v. challenges
For freelancers, fixed-term contractors, and solo self-employed business owners, these proposed legislative changes represent a mix of potential benefits and challenges. While enhanced protections and a genuine living wage could improve working conditions for many, there is concern about the impact of increased regulation on the flexibility and independence central to the freelance and contractor lifestyle.
Open dialogue: we need to talk
As Labour advances its ambitious legislative agenda, open dialogue between the government and flexible workforce stakeholders will be essential. This collaboration will help shape policies that effectively balance temporary worker protections with the need for a dynamic and adaptable freelance economy.
