Last year my son was offered the opportunity to become a line manager for a well-known fast food chain at a busy late-night outlet in Glasgow city centre where he had worked part-time for the previous two years. The job would have involved handling a team of approximately eight to 10 people, and at least one “overnight” shift finishing at 4am every couple of weeks.
Though his long-term professional goals lie elsewhere, a successful stint in management is a definite bonus on the CV of an 18-year-old, as he was then. It also came with a decent pay bump to £9.50 per hour, £2 more than he had been earning on the statutory minimum for someone of his age at that time.
But there was an upshot: because of the variations in the UK minimum wage between those under the age of 18, those aged 18 to 20, and those who are older, my son would have been earning 68p to 92p per hour less than anyone aged 21 or older who was under his management.
READ MORE: Labour pledges a ban as Scots zero-hour contracts hit record levels
Though a relatively small sum on an hourly basis, it racks up over the course of a pay period, and it just didn’t feel right. He was annoyed by the principle, and after several days of deliberation he turned down the job and handed in his notice.
He’s now happily working part time at another city centre venue where he finishes by midnight at the latest and can therefore get home by public transport, avoiding the costly necessity of travelling by taxi after a 4am finish. My son’s new employer has been faultlessly flexible in working around his university schedule and on top of all of that, his hourly rate is more than it would have been as a line manager at his previous place of work.
I tell this story because it illustrates one of the many issues that the incoming Labour government has pledged to swiftly reform under its “new deal for working people”. Sir Keir Starmer’s party has promised to introduce legislation within the first 100 days in government, meaning we should expect to see a draft Employment Rights Bill as early as mid-October.
The raft of changes that have been put forward, collectively billed by Labour as “the biggest upgrade to rights at work in a generation”, include a commitment to remove the age bands within the adult rates that apply to the minimum wage.
Not all employers rely on these lower pay rates for young adults to keep a handle on wage bills that have surged in recent years in an attempt to keep up with inflation, but there are significant numbers that do. This is particularly true in sectors such as retail and hospitality which have struggled to regain their footing in the wake of Covid lockdown restrictions.
How they will cope remains to be seen, and it’s a similar story when it comes to the impact of a major impending shift on the use of zero-hour contracts that have been blamed for undermining workers’ security and undercutting wages.
READ MORE: Minimum wage to rise to £11.44 in April next year
There are now approximately 100,000 people in Scotland working on zero-hours contracts, under which employers are not obliged to provide any minimum number of working hours to staff. That number has surged by 42% since 2019, the year immediately prior to the pandemic.
Trade unions have said nothing will suffice other than a total ban on such working arrangements but in the wake of consultations with business leaders Labour has slightly watered down its position by acknowledging that opportunities to work flexibly do benefit some workers, and it seems they may be allowed to retain zero-hours status.
The plan is to outlaw what are referred to as “exploitative” zero-hours arrangements by granting the right to have a contract that reflects the number of hours regularly worked, based on a 12-week reference period. However, it remains unclear how this might pan out in the case of industries with natural seasonal peaks such as tourism during the summers and retailers in the run-up to Christmas.
To offer some comfort to organisations in sectors such as these, Labour’s “Make Work Pay” proposals specifically mention that employers would not be prevented from offering fixed-term contracts, including seasonal work. This is a reasonable stance and should address most if not all concerns among reputable organisations on this point.
The detestable practice of “fire and rehire” is also set for the chopping block, and while its use is not as widespread noisy headlines might suggest, there is no place for this method of business management in an equitable modern economy.
READ MORE: Labour must commit to the devolution of employment law
One of the biggest proposals with arguably the widest-ranging impact is the introduction of “day one rights”, which will grant employees protection from unfair dismissal, parental leave, and sick pay entitlement from their first day on the job. Coupled with this is the proposal to remove the confusing legal distinction between an “employee”, someone hired for a specific job, and a “worker” who has a less structured relationship with their employer.
Employees typically have more rights than workers such as freelance contractors, so merging these two into a single category while also extending day one rights would have a seismic impact on the employment landscape. Here again, however, there is a lack of clarity. It could very well be that day one rights are quickly introduced for those currently classed as employees, while the conflation of “employees” and “workers” is subject to a lengthier consultation process.
But even if the removal of qualifying periods is limited initially to employees, this would still be a big change. As things currently stand, most staff must have two years of service before they can claim unfair dismissal, a right that is oddly bestowed far beyond the usual probationary period.
Although it won’t directly affect him, my son is unsurprisingly upbeat about the idea of removing discriminatory minimum wage bands and other labour law reforms. There is no doubt that the scales between employers and staff need rebalancing, but there is a real danger of unintended consequences when undertaking such a massive overhaul in a short space of time.
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