As the labour market continues to struggle with skills shortages and in the continuing gap left by a single Employment Bill, the trade body said in a statement: “Reform is needed urgently in three core areas if the UK’s labour market is to be strengthened in what is increasingly becoming a difficult year.”

The three areas are: regulatory support for self-employed and independent contractors; more rigorous regulation of the umbrella market; and “constant reviews” of current Off-Payroll legislation.

“However, while we believe these should be the priority areas of focus, we remain concerned that without one holistic Employment Bill there may be areas of employment law that require reform which are missed,” said Tania Bowers, global public policy director at APSCo. 

“A more joined-up approach is needed to ensure legislation continues to work well for, and protects, employees, businesses and recruiters – ensuring the UK labour market is as strong, dynamic and fair as possible.”

Elaborating on the three core areas, Bowers said:
1) “In terms of regulatory support for self-employed and independent contractors, self-employed status must be defined by regulation to help resolve the complexity of status determinations for tax and rights. Agency Workers Regulations 2010 should also be updated for professional self-employed contractors, to reduce complexity at the professional end of the contracting market.

2) “While umbrella companies have many advantages, there are nuances in how these businesses are defined and operate which is exacerbating the complexities of the labour market and providing opportunities for unscrupulous firms to operate. Government must be ambitious and futureproof the legislation, considering licensing of the umbrella market, the mandatory use of client accounts, as well as the introduction of statutory compliance codes. Tackling rogue umbrellas also needs to be a higher priority with a bigger budget to ensure the recruitment landscape is fair and works for all.

3) “As a founding member of HMRC’s IR35 Forum (now the Employment Status and Intermediaries Forum) APSCo is aware of the limitations of Off-Payroll. [We] have called for a commitment to constant reviews of the legislation to enable a flexible, agile and independent professional workforce which includes tackling the issue of fairly determining whether someone is an employee or self-employed. Government should continue to work with the professional recruitment sector to help overcome these challenges and remove the current burdens of Off-Payroll.”

Bowers concluded: “The way we live and work has evolved significantly since the pandemic, and employment legislation needs to both catch up with the modern, more flexible environment that we now operate in and be able to adapt to constant change as and when it happens.”

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