The TUC has called for supply chain workers to be given more rights to challenge the outsourcing company on pay abuses.
The trade union body wants new laws to be introduced that gives workers the ability to bring claims of unpaid wages and holiday pay against any contractor above them in the supply chain.
It has said unless companies are jointly liable for how suppliers treat their employees, workers will remain at risk of being denied pay rights.
Frances O’Grady, TUC general secretary, said: “This is an issue that affects millions, from fast food workers to people working on building sites. Joint liability must be extended to parent employers.
“Without it they can shrug their shoulders over minimum wage and holiday pay abuses.”
She added she would be raising the issue with the government’s labour market tsar, Sir David Metcalf, who is working on his first strategy report.
The TUC estimates there are 5m UK workers employed by outsourced companies, franchised businesses or through recruitment agencies, who cannot challenge their ultimate employer over pay issues.
Government watchdog The Low Pay Commission, estimated as many as 580,000 workers in the UK are not being paid the minimum wage. Similarly, an earlier TUC report claims 2m workers missed out on around £1.6bn worth of holiday entitlement last year.
But under current laws many workers employed by a services supplier, such as a cleaning company, are unable to bring claims against the contracting organisation.
The TUC has called for similar laws to the Australian Fair Work laws, which puts responsibility for the right of workers on the company contracting labour.
Metcalf is the first to fill the government position of director of market labour enforcement and was appointed in January 2017. The role oversee the government’s work tackling employee exploitation and sets the priorities for the Gangmasters and Labour Abuse Authority, the Employment Agency Standards inspectorate and HMRC National Minimum Wage.
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