Millions of workers are to receive new employment rights from the first day in a job, including the enforcement of holiday and sick pay under “major” Government reforms.
Ministers said the UK will become one of the first countries to tackle the challenges of the changing world of work, pledging to help create better, higher-paying jobs.
In its response to a review headed by Matthew Taylor into issues such as the rights of workers in the so-called gig economy, the Government said its reforms included giving zero hour and agency workers the right to request a more stable contract.
The TUC said the Government had taken a “baby step, when it needed to take a giant leap”.
Ministers said they planned to go further than the review’s proposals by enforcing workers’ holiday and sick pay for the first time, making sure workers had day-one rights such as holiday and sick pay entitlements and a new right to a payslip.
Around 1.2 million agency workers will be entitled to a breakdown of who pays them and any costs deducted from their wages, while the Low Pay Commission will be asked to consider higher minimum wage rates for those on zero hour contracts.
Laws allowing agencies to employ workers on cheaper rates could also be repealed, while some employment tribunal fines against employers will be quadrupled to £20,000.
A consultation will be launched to see if new laws are needed to make it easier to understand if someone is an employee, worker or self-employed, an issue which has led to a series of employment tribunal cases in recent years.
Prime Minister Theresa May said: “We recognise the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK’s position as one of the best places in the world to do business.
“We are proud to have record levels of employment in this country but we must also ensure that workers’ rights are always upheld.
“Our response to this report will mean tangible progress towards that goal as we build an economy that works for everyone.”
Business Secretary Greg Clark said: “The Taylor Review said that the current approach to employment is successful but that we should build on that success, in preparing for future opportunities.
“We want to embrace new ways of working, and to do so we will be one of the first countries to prepare our employment rules to reflect the new challenges.”
TUC general secretary Frances O’Grady added: “The Government has taken a baby step – when it needed to take a giant leap.
“These plans won’t stop the hire and fire culture of zero-hours contracts or sham self-employment, and they will still leave 1.8 million workers excluded from key protections.
“Ministers need to up their game. At the very least they must end the undercutters’ charter that means agency workers can be paid less than permanent staff doing the same job.”
Torsten Bell, director of the Resolution Foundation think tank, said: “The government is right to be taking concrete measures to boost enforcement of our labour market rules and to increase the fines for employers who break them too often.”
Stephen Martin, director general of the Institute of Directors, said: “This could be the biggest shake-up of employment law in generations.
“It is right, therefore, that Government proceeds cautiously by consulting widely.
“However, while they have accepted almost every single recommendation from the Taylor Review, and in some cases even gone further, the lack of action on tax reform is a wasted opportunity.”
Shadow business secretary Rebecca Long Bailey said: “Launching four consultations and merely ‘considering’ proposals is just not good enough. Like so much from this Government, today’s response is just more words with no real action to improve the lives of the millions of people in insecure work.
“Theresa May’s failure to strengthen workers’ rights is having a real impact on people’s lives. Only recently we heard of the devastating case of a gig economy worker who died after being fined by DPD for attending urgent medical appointments.
“Labour warned that the review did not go far enough, and yet the Government has failed to adequately meet even the most basic of recommendations.”