Low-paid workers are most likely to gain from new provisions in the Employment Rights Bill, says Resolution Foundation

Low-paid workers are the least likely to receive sick pay, most affected by a lack unfair dismissal protection, and are more than ten times as likely to be on a zero-hours contract than high earners – so are most likely to benefit from the new provisions laid out in the Government Employment Rights Reform Bill, the Resolution Foundation said today (Tuesday).

The Foundation notes that while all workers are covered by expanded statutory sick pay, a far shorter qualifying period for unfair dismissal protection and a new right to a contract that reflects regular hours, low-paid workers are most likely to be affected, because:

1. The poorest fifth of workers were twice as likely to have lost their jobs involuntarily during the past two downturns as high-paid workers;
2. 1.1 million low-paid workers are currently ineligible for statutory sick pay; and,
3. One-in-twelve of the poorest fifth of workers are currently employed on a zero-hours contract, making them more than ten times as likely to be on one as high earners.

The Foundation adds that there are up to 1.8 million workers on either a zero-hours contract, or working via an agency, who could potentially gain compensation for short-term notice shifts and a new right to a regular contract. The number of beneficiaries will depend on the qualifying period and hours threshold for these new rights, which the Government will need to decide on soon.

Finally, the Foundation notes than given our low-regulation starting point – there are fewer restrictions on firing workers in the UK than in all but five other OECD countries – even with these reforms the UK's labour market is likely to be less heavily regulated than most other rich countries.

Nye Cominetti, Principal Economist at the Resolution Foundation, said:

“The Government's employment rights reform agenda will, if successfully implemented, amount to the biggest shake-up of UK workplaces in a generation.

“While all workers are covered by new rights and expanded sick pay, in reality low-paid workers stand to gain most as their job security is far lower than that enjoyed by middle and higher earners.

“The provisions being proposed today will improve the quality of many people's lives. But the scale of change they'd bring about in low-paying sectors like retail and hospitality means they should be implemented carefully.

“Workplace reform shouldn't end with this Bill either. Today's provisions should be reinforced by greater clarity over workers' employment status, and better enforcement of workplace rights.”