Prime Minister Theresa May is pressing ahead with plans to boost the rights of workers in the gig economy on areas including flexibility and pay as part of a package of measures to overhaul employment laws, according to The Guardian.

May plans to end a legal loophole that allows companies to pay agency workers less than full-time staff for doing the same job. Ministers are proposing repealing the Swedish derogation rule even though the Treasury would be cautious about upsetting businesses, which reacted with alarm when the idea was first proposed.

The proposed changes are also response to the Taylor Review published last year.

Business secretary Greg Clark has told cabinet colleagues that he hopes to implement several key recommendations from a review by Matthew Taylor.

The government’s proposals include:

• New legislation to give workers in the gig economy the right to request a temporary or fixed-hours contract after 12 months and to tackle the challenges in building up continuous service.
• Following the advice of the low-pay commission, which has already been consulted, on how to address what Taylor described as “one-sided flexibility”. The body is understood to be looking at notice periods and compensation for cancelled shifts.
• Legislating to clarify the criteria that determines whether people are workers or self-employed by bringing tax and employment laws into alignment. This could mean that more people currently defined as self-employed by human cloud firms such as Uber or Deliveroo would be entitled to worker protection.
• Naming and shaming employers that fail to pay out after employment tribunals as a deterrent to those that are considering flouting the law. The Guardian states that more than a third of successful claimants never receive any of their compensation, and less than half are paid in full, according to government data.
• Changing the law so that the state can force companies to give paid holiday to ‘vulnerable workers’. If they fail to do so, they would face tough financial penalties along the lines of those which already exists for underpayment of the minimum wage.

Ministers are also planning to explore new powers, proposed by a separate review, to impose fines on companies that break the rules on agency worker regulations by failing to give staff holiday or sick pay, and demanding a payslip for all workers.

The Ministers are also considering setting up a single labour market enforcement agency, which would bring together the relevant parts of HMRC, the Gangmasters and Labour Abuse Authority and the Employment Agency Standards Inspectorate.