Single Status of Worker

Tahir Ali Excerpts

Wednesday 15th April 2026 Westminster Hall

[Ian Lavery (Blyth and Ashington) (Lab)]

It is a pleasure to serve under your chairmanship, as ever, Mr Efford. I refer to my declaration of interests on my trade union membership and trade union support in the general election.

The Conservative ethos of unhindered market determination meant that historical antagonism to the trade unions, which are seen as an unholy impediment to the favoured goal of a flexible labour market, intensified as the Tories continued to try to curtail their power. It became the common theme of Governments here and elsewhere—up until, of course, the election of the Labour Government in 2024. The market had to be what determined the wages and conditions of ordinary working individuals, not collective bargaining or negotiations with unions. Management would be totally free to pay what the individual worker is worth. That is worth recognising at the outset.

They reckon that Thatcher’s greatest achievement was not Tony Blair, as she once declared; her most profound legacy was the gig economy. The widespread acceptance of insecure, casual employment is one of the cornerstones of the UK economy. What an absolute disaster. The gig economy was given legal underpinning by the Trade Union and Labour Relations (Consolidation) Act 1992 and the Employment Rights Act 1996, which defined the two levels of employment status: the employee, with full legal and contractual rights, and the worker, who enjoyed only minimal legal protections. The exploitative use of casual labour was basically given legal legitimacy. That was a crime against ordinary working people.

Under those Acts, a worker is said to have a more casual, less structured work pattern—for example, zero-hours contracts. They are usually required to do the work themselves, and cannot ask somebody else to cover for them. They technically do not have to make themselves available to work, but in reality the fear of no further hours being offered if they turn down a request that they work has made this a legal fiction in many cases.

Look at the economic effects of the widespread employment of those legally characterised as workers. It is blatantly obvious that good, long-term jobs have been replaced by low-paid, minimum wage jobs. Many of those who have been forced to work in the large casual work sector require benefits to survive. Employers’ profits are being subsidised by everybody in this room—by the taxpayer. Cheap labour has been a major cause of a lack of investment in capital and in research and development, resulting in poor productivity growth. It is hard for workers to achieve union recognition as they are without unfair dismissal protection, leading to even weaker union density in key industries—again, a key goal of the Conservatives throughout their history.

I would like to share some of the difficulties suffered by individuals employed as workers. Many have been on zero-hours contracts and do not know what money they will earn each month. We understand the problems that brings: they have no job security and can be dismissed without notice, they are not entitled to redundancy pay, and some employers employ a pool of workers who work besides those with employee status, so that there can be mass redundancies and avoid statutory consultations and legal obligations to discuss alternative employment with those affected—they can freely choose those with worker status.

Workers can be wrongly classified as being self-employed—the well-known bogus self-employed—a tactic used to avoid national insurance contributions, stakeholder pension contributions and so on. It is sometimes hard to spot because of legal complexities. If, on paper, somebody hired to work can choose somebody else to do that work for them, the so-called substitution clause means that that individual will legally be given self-employed status and have no employment rights whatsoever. It is often hard to prove the false nature of the written clause, but in reality, it is well known that no one in the firm would dare to rely on these clauses for, say, an extra day off.

[Tahir Ali (Birmingham Hall Green and Moseley) (Lab)]

My hon. Friend is making an important point about the exploitation of workers with very little legal protection. Does he agree that it must be incumbent on all employees to have union recognition, whereby the voices of employees, no matter how small the organisation, are heard and can be part of any action that can be taken against rogue employers? There are some very good employers that recognise unions and work with them to achieve the best, but many do not recognise unions and would rather have working conditions that take us back more than 100 years, before the work of trade unions had even started.

[Ian Lavery]

I fully agree with the sentiments outlined by my hon. Friend.

I will move on to a summary of the legal rights denied to people classified as workers under the Trade Union and Labour Relations (Consolidation) Act 1992 and the Employment Rights Act 1996: protection against unfair dismissal after six months; the right to guaranteed hours; the right to maternity pay; the right to paternity leave; protection against unfair redundancy selection; the right to redundancy pay; access to statutory union recognition procedures; and the ability to request family-friendly flexible hours. Those are the rights that are being denied to workers at this moment in time.

What are we really asking for? There must be a renewed push for the full implementation of Labour’s manifesto commitment to merge the employed and worker tiers into one single legal category of employee with full legal employment rights. We need an end to the bogus self-employment tactics that unscrupulous employers deploy. The law should not recognise the legitimacy of any substitution clause.

The best means of achieving a clear distinction between a new employee with single status and those who are actually self-employed is to use the formula proposed in Lord Hendy’s single status Bill of 2023-24, which was introduced in the Lords. That would not only merge employees and workers into a single status of employee; legal employment rights would also end the bogus self-employment tactics that employers use to deny people the higher employee status. Under Lord Hendy’s Bill, a person would be deemed to be self-employed only if there was clear evidence that he or she was genuinely operating a business on his or her own account. Evidence such as business accounts, advertising and the number of clients or customers would be needed to prove true engagement for services by a self-employed person.

I thank my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders) for bringing this timely debate to the House. I also thank the Minister for her sterling work on the employment Bill. It was an excellent Bill. It could be a lot better; it could be a lot stronger—to be honest, we need an employment Bill 2.