Post-pandemic economic growth: UK labour markets

Ministerial responsibility for labour market policy is fragmented across Whitehall departments. We therefore call on the Government to consider the following: a) establish a Ministry of Labour b) appoint a new Minister of State for Labour in the Cabinet Office with the authority to convene and coordinate labour market policy across Whitehall c) establish a Cabinet Committee on Labour, chaired by a Business and Trade Minister, which convenes each relevant Minister from each relevant Department on labour market policy.

We note that dedicated support is needed to help business owners and leaders understand what technologies are available, how they might be best used within their businesses and how to integrate those technologies and train workers to use them.

Artificial intelligence and automation are already established in many workplaces, and they have many benefits in improving productivity and consistency of output. They are here to stay. We therefore welcome the general recognition that they should not be resisted or perceived solely as a threat to jobs. But we do conclude that implementation of new technologies in the workplace should be done in partnership with workers and, where relevant, their trade unions.

We call on the Government to introduce, whether by statute in the Data Protection and Digital Information (No. 2) Bill, or by other means, a requirement a) on businesses to conduct impact assessments to understand the scope and consequences of the use of new technologies in the work place; and b) for workers to have the right to consultation and notification where the application of technology in the workplace will result in the surveillance of a worker, or result in a significant change to their work. That notification should explain in plain English what the technology is, when it is being implemented, how it will be operated, and what the impact will be on the worker. We encourage employers to involve workers in the design and implementation of new workplace technologies from the start of that process.

It has yet to be seen what effect the Science and Technology Framework recently announced by the Government will have on digital skills development. We call on the Government to bring forward a new data poverty and digital skills strategy that will, amongst other things, set out how workers will be supported in the development of their digital skills.

We note with concern that there is a lack of investment in workplace training and reskilling. We therefore ask the Department to consult with business on the reasons for such lack of investment and consider what incentives would increase investment in workplace training.

We agree that the proposed Lifelong Loan Entitlement has the potential to be “transformative” in encouraging retraining and upskilling and ask the Government to conduct a review of the scheme one year after its commencement and to report its findings to this Committee.

We ask the Government for an update on its thinking in relation to the use of computer evidence in criminal and/or civil proceedings and to prioritise this area of work at the Law Commission if it has not already done so.

Policy responsibility within Government for the governance of artificial technology has passed to the Department for Science, Innovation and Technology. We note that the Science and Technology Committee is in the midst of an inquiry into the governance of artificial intelligence. We therefore draw to the attention of that Committee the evidence which we have described in this Report.

We question, however, whether existing regulators have the expertise to perform the functions proposed in the recent White Paper on regulation of AI. If regulators will need to recruit additional staff with such expertise, the Government should consider carefully whether they can do so from existing budgets without compromising other important regulatory functions.

We ask each of the regulators referred to by the Government in its recent White Paper to write to this Committee setting out what capacity, expertise and established policy it has in respect of the application of AI in the workplace and to set out what additional resources are required to deliver this new area of responsibility. We ask those regulators to write to this Committee no later than three months following publication of this report.

The use of technology and automation in the workplace has enormous potential for improving economic productivity, increasing wages and creating new goods and services for domestic use and export. As we live and work for longer, the use of AI and automation can support how individuals and society adjust to new ways of working. Re-training and upskilling the workforce of the future, in order to make the best use of the potential which AI and automation offer, is essential to economic growth and addressing skills shortages.

However, there is a significant risk from the lack of attention on the unwelcome or unintended consequences of the use of technology and automation in the workplace, whether that is in the warehouse or in a worker’s home. Surveillance in the workplace may have value if it prevents malpractice and helps to improve productivity in a way which is agreed through consultation with the workforce and is applied within agreed parameters. But it is likely to be destructive of worker morale if it is imposed in a heavy-handed way. We ask the Government to consult on an enforceable code of practice on the use of surveillance technology in the workplace.

We recommend that a taskforce of relevant enforcement bodies be established, alongside the Centre for Data Ethics and Innovation and the Trades Union Congress, to assess the implications of technology in the workplace, to consider whether enforcement of labour laws is effective, and to make recommendations on whether further legislation is required. We recommend that the taskforce be asked to produce an initial report by autumn 2024.

There is evidence to suggest that we cannot be complacent about the effectiveness of existing law in protecting women who are pregnant from redundancy, or who are on maternity leave, or who return to work after pregnancy. We welcome the Protection from Redundancy (Pregnancy and Family Leave) Bill as a small step, but the Government may need to return with stronger protective measures if evidence of discrimination persists. To collect this evidence we recommend that the Government commissions research similar to that conducted by the Equality and Human Rights Commission for BEIS in 2016.

We invite the Government to confirm whether any evaluation of the Shared Parental Leave scheme is still active, and to set out what plans it has to increase take-up.

We note that many parents are disincentivised at work from having children, at a time when the country needs more young people to work and pay taxes to cover the costs of our ageing population. We therefore ask the Government to consult on what more can be done to create the conditions to incentivise parents to have children whilst offering suitable protections at work so that time out of work does not impact their career and pay opportunities in the future.

We conclude that the outdated legal construction of work—namely full or part-time work—is preventing many people who wish to be economically active from being so. For many workers who do work more flexibly, or on a freelance basis, they are not afforded the rights and protections that full or part-time workers receive. We call on the Government to reconsider the need for an Employment Bill in the upcoming King’s Speech so that legislation can be brought forward to, among other things, create new, more flexible constructions of work that include appropriate rights and protections for workers.

We also agree with the Joseph Rowntree Foundation that policy solutions are required to ensure more, good-quality flexible job opportunities are available for workers on low pay. We note the Government’s support for the Workers (Predictable Terms and Conditions) Bill, but we recommend that the Government extend the provisions of that private Members’ bill so that there is a: i) default right to a secure contract after 26 weeks of work; ii) right to four weeks’ notice of working schedules; and iii) right to compensation for cancelled shifts

The actions of unscrupulous umbrella companies are depriving workers of rights and in some cases remuneration, and they are damaging the reputation of umbrella companies as a whole. There is widespread agreement that the Government should act to provide statutory protection from such practices. In response to this Report, the Government should set out its plans for doing so, or should explain what obstacles are preventing it from doing so.

We believe that the Government should take more of a lead in providing protection for workers from any damaging effects from night-time working. As a first step, we recommend that the Government should commission an investigation into the health and safety implications of night-time working.

We are not wholly persuaded that there is currently a need for immediate action to establish a statutory “right to disconnect”. But the Government should ensure that mechanisms and processes are in place to detect any significant threat to home workers from unreasonable expectations by employers of availability for work. The Government should also track “right to disconnect” initiatives in Canada and Ireland and elsewhere, to assess their value and effectiveness.

We ask the Government to update the Committee on the status of each of the commitments made by the then Secretary for Transport, Rt Hon. Grant Shapps MP: • HMRC to dedicate significant resource to check that all UK ferry operators are compliant with the national minimum wage; • Maritime and Coastguard Agency to review its enforcement policies; and • Action to prevent employers who have not made reasonable efforts to reach agreement through consultation, from using fire and rehire tactics.

We conclude that enforcement of labour market rules is wholly inadequate—not because enforcers or regulators are not performing, but because they are under- resourced and not given the priority they deserve for legislative reform.

We believe that the Government should proceed with the establishment of a single enforcement body, bringing together the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority and the National Minimum Wage Team. We believe that a single organisation would provide clarity for those most in need and would offer benefits in sharing of information.

We call on the Government to commit to a long-term financial plan with the new single enforcement body (or existing bodies if it declines the opportunity to create a single enforcement body) to ensure that it is resourced to at least the minimum level of what is deemed appropriate by the International Labour Organisation.

We ask the Government to confirm to the Committee the current number of inspectors employed in the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority and the National Minimum Wage Team within His Majesty’s Revenue and Customs.

While employment tribunals are backlogged, and awards are not being paid, workers are being prevented from exercising their rights effectively. We commend the Government for providing resources specifically to help clear the backlog. In the meantime, we ask the Ministry of Justice to set out an action plan on clearing the backlog and on its plans for resourcing enforcement, to be published within the next six months. The Government should also justify why it has not so far taken action to extend the time limit for submitting certain types of employment tribunal claims from three months to six months.

If the Retained EU Law (Revocation and Reform) Bill receives Royal Assent, a substantial body of regulations contained within EU retained law and covering employment standards and rights will cease to apply in the UK unless specifically preserved in some form. Great care will need to be taken in reviewing these regulations and determining how they should each be treated, to ensure that there is clarity and consistency in UK labour law.

We recommend that the Bill should be amended to ensure that within a given timeframe a committee also examines any regulations which are part of retained EU law and which govern UK law relating to work, including workplace standards and employment rights, which the Government (a) intends should expire at the ‘sunset’ date set in the legislation or (b) proposes to incorporate into domestic law under the affirmative procedure.

To facilitate this scrutiny the Bill should ensure that the Government must present to the committee a notice of any provision which it intends should expire, together with a memorandum of its reasons and an impact assessment in time to allow consideration before sunset. Where the Government intends to incorporate a provision into UK domestic law under the affirmative procedure it should present a draft of the proposed instrument to the committee, together with a memorandum of its reasons for any decision to adapt or amend the regulations and/or for any decision by the Government not to preserve any element of them. In each case that committee should: • provide the Government with an opportunity to give such further explanations of its proposal as the committee may require, except where the committee does not consider it reasonably practicable to do so within the statutory timeframe; • report on the notice or draft instrument and accompanying papers, drawing to the attention of the House any observations or concerns arising from its consideration of such documents; and • have the power to recommend any notice or draft instrument for debate on the floor of the House: if rejecting this recommendation, the Government should be required to make a statement explaining its reasons. The Government must ensure that the flow of notices and proposed instruments to any relevant committee is controlled and consistent, so that the committee has a reasonable opportunity for effective examination of each proposal within the statutory timeframe.

We endorse and support the recommendation by the Women and Equalities Committee that the Government should develop and pilot a specific ‘menopause leave’ policy with a large public sector employer.

We welcome the Government’s support for the Employment Relations (Flexible Working) Bill, we reiterate what we have said earlier in this report that a right to request flexible working is a right to decline. We urge more employers to specify, when advertising job vacancies, that a role may be suitable for flexible working: by doing so, they stand to benefit from a huge untapped pool of older workers.

We observe that jobcentres are not currently mandated or resourced to provide the most appropriate employment help and support services to many workers, not least to the over-50s seeking to return to the workforce.

We recommend that the Government conducts a review into the future reform of jobcentres and to assess whether a public employment service offers better solutions in alternative settings (as well as online) that will improve the accessibility and quality of employment advice for people over 50.

It is clear that to succeed in retaining or re-integrating people aged over 50 in the workforce, there needs to be a better understanding of what that age cohort wants from work. We recommend that the Government considers a dedicated resource, similar to the silver human resource centres in Japan, as part of a national jobs service to support older people to find relevant opportunities. This could, for example, be administered out of jobcentres.

We note that pensions reform may be a requirement and draw this, and our broader observations and recommendations, to the attention of the Work and Pensions Committee, which has responsibility for scrutiny of the Department for Work and Pensions.

We welcome the expansion of the mid-life MOT. We agree that it is important that people in their 40s and 50s should get a reality check on their finances and health to help them make better-informed decisions about their next steps in work and prepare for retirement. We ask the Government to consider a similar scheme for people starting work, not least to highlight the importance of pension auto-enrolment.

If returnerships are to attract older workers and to be effective in bringing them back into the workforce, they will need to offer a decent package of training. They will need to value and recognise the skills that older workers already bring to their new workplace, while seeking to provide practical reskilling. To be effective: a) There should be transparency on whether there will be a job at the end, and what that job will be; b) Organisations should be incentivised in some way, or they may question what is in it for them. Paying less National Insurance, for example on a worker they hire through such a scheme could be one such incentive; Post-pandemic economic growth: UK labour markets 71 c) They should offer flexible working options: people in their 50s value part-time and flexible working patterns and are more likely to take up a returnership and a job at the end of it if flexible working is available in the role; d) The training needs to be sector-based, rather than jobs-based, featuring opportunities to shadow and learn about different roles. This would give people on the scheme the chance to learn about different roles within a sector and not narrow their choice to a specific job at the outset; e) It should include regular careers support and counselling; f) Schemes should be cohort-based, enabling people to train with their own peer group; and g) The scheme, once it is up and running, should showcase examples of people who have joined the programme and successfully re-trained and entered a new role.

We recommend that Government departments, and the wider public sector, lead from the front on the returnership initiative. Offering returnerships in the Civil Service, in the NHS and in education, for example, will give the private sector confidence that it is a successful model worth the financial investment.

We consider that such a process could be valuable for workers of all ages and that a review is conducted one year following implementation of returnships to evaluate their benefit more widely.