The Employment Bill is a chance to improve jobs for low-paid workers

The Government must address poor-quality, insecure jobs so work is a reliable route out of poverty, starting by bringing forward the Employment Bill to deliver better quality work.

People who are able to work need a job that fits around our lives, health, or caring responsibilities. We need to know when and how often we’ll be working, so we can plan our lives and finances.

We know from our work in partnership with people with experience of in-work poverty, that too often low-paid jobs are unpredictable and insecure, or can fail to provide people with dignity and respect at work. Poor-quality work can trap people in financial insecurity, and limit people’s chances of finding a sustainable work-life balance. But we also know that it’s possible to deliver good-quality jobs across sectors, which balance security and flexibility, and treat people with dignity and respect. As we move into a recovery, we need a commitment to building back with an economy that works for all of us, which has good work at its heart.

For workers and their families who are locked in poverty, the Government’s commitment to tackling low pay by continuing to raise minimum wage rates will provide very welcome support. Minimum wage increases have successfully increased pay for people on the lowest wages, and it’s right to move towards a National Living Wage level of two-thirds of median pay by 2024.

But despite multiple rises, the proportion of workers in poverty has risen continuously over the last 20 years. That’s because increases to the minimum wage haven’t been enough to make up for inadequate social security, high housing costs, and sufficient working hours not being available. As well as a raise in hourly pay, more needs to be done to tackle insecure work and prioritise good-quality, fulfilling jobs in the recovery – so that work can offer a reliable route out of poverty for everyone.

The COVID-19 pandemic and its economic impact have exposed the quality of work as both a public policy and public health issue. Many of the key workers who have kept us all going earn less on average than the national median wage, while many have been at greater health risk because they are less likely to be able to work from home - and this raises questions about how we build more flexible work for everyone in a recovery.

At the same time, cases like the recent Uber ruling have highlighted the importance of making employment rights clear, fair, and accessible, and ensuring employers understand and deliver on their obligations from day one. Workers should not have to go through onerous processes – in this case, a more than four-year legal battle – to access their own employment rights.

Poor-quality work traps people in poverty and insecurity

Workers with less security built into their roles, such as people on temporary or zero-hour contracts or in agency work, had a higher risk of poverty than people in more standard forms of employment, even before the pandemic. This is because of a combination of a ‘pay penalty’ in many of these roles - in which workers in insecure roles are paid considerably less than people in permanent roles, even when they have the same characteristics and skills - and time spent out of employment between jobs.

Being in insecure work makes it harder to move out of poverty. The unpredictable nature of people’s hours and schedules restricts their ability to find additional work. For example, applying for a second job is more difficult without clear and predictable availability. This combination of uncertain working hours and low pay in many roles significantly reduces and restrains a worker’s chances of escaping from poverty’s grip.

During the pandemic, workers who were already more at risk of poverty have found themselves with a higher risk of losing work. Our recent briefing showed that workers with less security, fewer hours or low pay have been disproportionately at risk of losing their job or having reduced hours, even compared to workers in the same sector and with the same personal and other job characteristics. They were also less likely to be supported by the Government’s furlough scheme.

There is now a body of evidence suggesting that less secure work arrangements can have a negative impact on productivity, and the insecure nature of many low-paid jobs has been linked to the poor productivity of the UK economy in recent years.

We must listen to low-paid workers as we move into the recovery

These challenges of insecure and precarious work are reflected in what our partners with lived experience have been telling us in our co-design project on developing solutions to in-work poverty over the last 18 months. Together we’ve been scoping out both the challenges of in-work poverty and practical policy solutions to it, facilitated by our partner Involve. This work has already informed JRF’s own definition of a ‘good job’.

All of us who are able to work need a job that fits around our lives, health, or caring responsibilities – and we need to know when and how often we’ll be working so we can plan our lives and our finances.

Throughout the project, we’ve heard lots about the challenges caused by insecure work: of paying for transport and childcare, only to arrive at work and find your shift cancelled; or being unable to plan your weekly or monthly finances, because you don’t know how many shifts you’ll be working.

While our project has explored examples of bad work, we’ve also heard about employers who are getting the right balance between flexibility and security. These examples of good practice show what is possible and are what we want policy makers to build on. We must listen to low-paid workers to understand their experiences and priorities as we move into the recovery.

Bring forward the Employment Bill

The Government has a great opportunity to address some of these everyday challenges facing low-paid workers and low-income families in the form of the long-awaited Employment Bill, which is a crucial part of rebuilding an economy that works for everyone.

In the Queen’s Speech 2019 the new Government promised an Employment Bill that would:

  • protect and enhance workers’ rights,
  • strike the right balance between flexibility and security,
  • protect workers, including those in low-paid work and the gig economy, and
  • strengthen how rights are enforced through creating a single enforcement body.

Delivering on these objectives would help support a recovery with better jobs that strike the right balance between flexibility and security for low-paid workers.

Although the bill was proposed before COVID-19, many of the issues rightly identified by the Government then are just as important as the economy recovers. We would like to see the Government bring forward the Bill in 2021 as part of a broader plan of recovery built on good jobs, and as part of its Plan for Growth.

It’s time to deliver on job-quality commitments

Now is the right time to focus on boosting the quality of work for low-paid workers and to realise the ambitions in the promised Employment Bill. Failing to act on job quality could have significant risks. Following the 2008 recession, the UK’s recovery saw record employment – but was also characterised by poor productivity and wage growth, partly due to the use of less secure working arrangements.

This time around, the Government must also prioritise the quality of jobs so we build back with the stronger, more productive economy the UK needs, and we can pay for our significant emergency spending during the pandemic and deliver better living standards in the recovery.

Prioritising better-quality, more secure and more fulfilling jobs for low-paid workers should sit at the heart of the Government’s recovery plans – and it should take the opportunity to reaffirm its commitment to bringing forward an Employment Bill at the Queen’s Speech on 11 May.