Government urged to close gig-economy loopholes
The Government is being urged to close loopholes around the treatment of self-employed workers following intense scrutiny of gig-economy companies such as Deliveroo and Uber.
A joint draft bill from the Work and Pensions and Business Committees has argued that there should be a new “worker by default” status, which requires companies to provide basic standards and benefits.
The change would mean that the onus would fall on companies to prove self-employed status, rather than forcing workers to via the courts. The committees recommend that new legislation should “emphasise the importance of control and supervision of workers by a company”.
Earlier this month Uber lost its appeal against a landmark ruling ordering it to treat drivers as workers, paying them minimum wage and providing other rights such as sickness and holiday pay.
The booming “gig economy”, which has an estimated 1.3m workers, came under scrutiny in the Taylor Review, which found that all work in the UK’s economy should be “fair and decent”
The committees, which have based their draft bill on recommendations from the Taylor Review, said that companies that rely on a flexible workforce ”must ensure that flexibility is not one-sided.”
As a result, their bill proposes setting a wage premium for workers without contracted hours above the national minimum and living wage - currently £7.50 an hour. The committee argues this could prompt employers to offer more stable work and ensures agency workers are not paid less than permanent employees doing the same job.
“It is time to close the loopholes that allow irresponsible companies to underpay workers, avoid taxes and free ride on our welfare system”, said Frank Field MP, chairman of the Work and Pensions Committee.
The bill also recommends greater enforcement of employment law and companies who flout the law, and those that tolerate exploitation in their supply chains, should be “named and shamed”.
The Sunday Telegraph recently uncovered one of Amazon’s delivery firms, SEP Logistics, regularly fined its drivers resulting in workers regularly earning below the minimum wage.
“Responsible businesses deserve a level-playing field to compete, not a system which rewards unscrupulous businesses”, said Rachel Reeves, chairman of the BEIS committee. “We need new laws but also much tougher enforcement, to weed out those businesses seeking to exploit complex labour laws, and workers, for their competitive advantage.”
However, the CBI has warned that the draft bill threatens to “close off flexibility for firms to grow and create jobs, when the issues that have been raised can be addressed by more effective enforcement action and more targeted changes to the law.”
The judge in the Uber case ruled that drivers accepting assignments were working for the company. However, five days later Deliveroo won a legal battle that confirmed the self-employment status of its workers, meaning it does not have to give its drivers minimum wage or holiday pay.
The legal win came after Deliveroo introduced a new contract that allowed drivers to swap routes with a friend that the company said would ensure more flexibility.
