Minister defends changes to UK workers’ rights against costs backlash | Employment law

Labour’s radical workers’ rights reforms have simply put the UK on a “level playing field” with other big economies, the employment minister, Kate Dearden, has said.

The government’s Employment Rights Act became law last year, with specific provisions being implemented this year and next.

Business groups have repeatedly warned that the changes, which include enhanced sick pay and dismissal rights, and union access to workplaces, will impose significant additional costs and could deter companies from hiring.

But Dearden said they had merely brought the UK into line with other countries in the Organisation for Economic Cooperation and Development (OECD), the club for industrialised economies.

“We basically have a level playing field now with most OECD countries. After lagging behind, we’re now in a place where we’re matching rights in other countries and providing those opportunities for our own workforce. So that’s just how much we had to do and how necessary it was to update and upgrade our legislation,” Dearden said.

She was speaking from the International Labour Organization (ILO) ministerial conference in Geneva, where she had been comparing notes with counterparts from other countries.

Andy Burnham is expected to continue with the government’s approach on workers’ rights if he wins next week’s Makerfield byelection and supplants Keir Starmer as Labour leader.

Ministers are consulting on the next aspect of the legislation to be implemented – regulations to oblige workers to be given regular hours, in place of “exploitative” zero-hours contracts.

Industry groups have urged Labour to implement the change cautiously, with the British Retail Consortium chief executive, Helen Dickinson, warning ministers not to “regulate flexible jobs out of existence”.

Dearden acknowledged that some workers prefer flexible hours but said the move could be life-changing for low-paid workers if the government gets it right.

She said: “When I hear from my constituents and from workers across the country that if they’re on a zero-hours contract that is exploitative, where they don’t know how many hours they’ll work that week or that month, therefore can’t budget around it, can’t plan their lives – that’s not the secure work that we want to see.

“We hear from retail and hospitality employers that they do value that flexibility, and their workforce too, but where perhaps that certainty and security isn’t in place for lots of employees who want it, how do we actually get that balance right?”

She added: “If we do get it right, it will be transformational for people: it will absolutely change their lives. We’re absolutely committed to growing our economy and we don’t think you can do that with people in insecure work.”

Dearden, who previously worked for the Community union, has been the MP for Halifax since 2024. She indicated areas where the government is considering going further on employment rights, including those for unpaid carers, on which she has just launched a consultation, and the impact of artificial intelligence on the labour market.

On AI, she said she had commissioned a fact-finding exercise about how people’s working lives were being affected. “We really want to follow the evidence of what’s happening in workplaces,” she said.

“How can we ensure that technology absolutely can make workplaces better, healthier, more productive, so it enhances the experience of working people and doesn’t replace them?”

Dearden also restated Labour’s manifesto commitment to equalising the youth rates of the minimum wage, paid to 18- to 20-year-olds and 16- to 17-year-olds, with the adult rate – though she insisted the timeline would be up to the independent Low Pay Commission (LPC).

The government has already increased the youth rates significantly, by 8.5% for 18- to 20-year-olds this year, for example, compared with 4.1% for the statutory “national living wage” for adults 21 and older.

Thinktanks including the influential Resolution Foundation have urged Labour not to equalise the rates, at a time when youth unemployment is rising.

But Dearden said the LPC had not yet found evidence that young people’s prospects had been damaged by the rising wage floor. “When we’ve heard from the LPC around the impacts to the national minimum and living wage, particularly around young people, they’ve said quite clearly that they haven’t seen that evidence base,” she said.

“Our ambition that we’re absolutely committed to in our manifesto is clear, and when I hear from young people about the difference that it’s made to them, in my constituency and beyond, they want to be paid, and rightly so, for the work they do,” she said. “Young people still face the cost of living crisis as other people do too.”