Employees to get new protections as government announces ‘largest upgrade in workers’ rights for over 20 years’

Ministers tighten laws to help workers in insecure employment, but unions say changes will not ‘shift balance of power’ enough

Workers are to be given new protections as part of a major overhaul of workplace rights announced by the government.

Dozens of changes will be made to employment rules in a move ministers heralded as the “largest upgrade to workers’ rights in a generation”.

As part of the changes, agency workers will have to be paid the same as permanent staff, while all employees will be able to request a statement outlining their rights from their first day of work.

New laws will be introduced to ensure workers in seasonal employment get the holiday pay they are entitled to, and companies that breach rules on employee rights will face tougher new penalties.

The maximum fines for bosses who are found to have shown malice, spite or gross oversight will quadruple, from £5,000 to £20,000.​

The changes were announced by Greg Clark, the business secretary, as part of the government’s response to a review carried out by Matthew Taylor, chief executive of the Royal Society of the Arts, into modern working practices.

Ministers said they will accept 51 of the 53 recommendations made by Mr Taylor, marking what they claimed was the biggest shake-up of workplace rules in 20 years.

But they will also follow Mr Taylor’s recommendation not to ban controversial zero hours contracts, which Labour has said it would outlaw.

Trade unions said the changes were not enough to “shift the balance of power” in favour of workers in the so-called gig economy.

Launching the government’s “good work plan”, Mr Clark said: “The UK has a labour market of which we can be proud. We have the highest employment rate on record, increased participation amongst historically under-represent groups and wages growing at their fastest pace in almost a decade.

“This success has been underpinned by policies and employment law which strikes an effective balance between flexibility and worker protections but the world of work is changing, bringing new opportunities for innovative businesses and new business models to flourish, creating jobs across the country and boosting our economy.”

He added: “With new opportunity also comes new challenges and that is why the government asked Matthew Taylor to carry out this first of a kind review, to ensure the UK continues to lead the world, through our modern industrial strategy, in supporting innovative businesses whilst ensuring workers have the rights they deserve.

“Today’s largest upgrade in workers’ rights in over a generation is a key part of building a labour market that continues to reward people for hard work, that celebrates good employers and is boosting productivity and earning potential across the UK.”

He said the government would close a loophole that allows some companies to pay agency workers less than permanent staff.

It will also beef up the Employment Agency Standard Inspectorate and give it new powers to impose penalties on employers who breach employment laws, for example by refusing to pay wages.

And it will push ahead with plans to create a single organisation responsible for protecting vulnerable workers.

Responding to the announcement, Frances O’Grady, general secretary of the Trades Union Congress (TUC), said: “Scrapping the agency worker loophole is a victory for union campaigning. It was an ‘undercutters’ charter’.

“But these reforms as a whole won’t shift the balance of power in the gig economy.

“Unless unions get the right to organise and bargain for workers in places like Uber and Amazon, too many working people will continue to be treated like disposable labour.

And Labour said the reforms would “do nothing” to help people on zero hours contracts.

The party’s shadow business secretary, Rebecca Long-Bailey, said: “This Conservative government has failed to support workers. Instead it has increased tribunal fees, attacked the health and safety of workers, introduced the draconian Trade Union Act and presided over the lowest wage growth in a decade.

“These proposals do nothing to tackle the growing number of people on precarious zero hours contracts and with their botched Brexit deal threatening jobs and rights they’ll have to do a lot more than this to reassure workers.”