Fresh call for crackdown on gig economy

Jon Howard
November 22, 2017

It says personnel should be classed as a "worker by default" to ensure access to basic rights such as sick pay because hundreds of thousands are now being "burdened" by risks associated with flexible working.

Employers that wrongly classify their workers as self-employed should be fined, two House of Commons committees proposed this week in what would amount to a major clampdown on the concept of false self-employment.

"Uber, Deliveroo and others like to bang the drum for the benefits of flexibility for their workforce but now all the burden of this flexibility is picked up by taxpayers and workers", she said, referring to the fact that gig firms do not have to pay the same rates of tax as businesses which employ staff on full-time or part-time contracts.

Labour's Frank Field, chairman of the work and pensions committee chairman, said the Bill would prevent good businesses being undercut by "loopholes that allow irresponsible companies to underpay workers".

"Recent cases demonstrate a need for greater clarity in the law to protect workers".

Whilst the report is considered to be going in the right direction, unions fear there is still a long way to go.

The union also said that Deliveroo had managed to "game the system".

"Today's select committee proposals are just a start in tackling the scourge of insecure work in the UK", GMB general secretary Jim Roache said. "This must change", said Rachel Reeves, chair of the Business, Energy and Industrial Strategy.

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Employers' body, the CBI, though, said companies would be concerned.

The draft bill proposes to close existing loopholes and clamp down on organisations that now do not pay the national minimum wage and holiday pay by classing workers as independent contractors. "Based on a very limited review of the evidence, the committees have brought forward proposals that 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", said Neil Carberry, the CBI managing director for people and infrastructure.

The committees found that workers such as minicab drivers and delivery riders were facing an "unacceptable burden" of trying to prove they are workers rather than self-employed people.

Tougher enforcement and fines for repeat offenders: The committees recommend the introduction of stronger penalties "for repeat or serious breaches of employment legislation", and also the naming and shaming of "non-accidental breaches of employment rights".

The Work and Pensions, and Business, Energy and Industrial Strategy committees' report also calls for a loophole allowing agency workers to be paid less than permanent employees to be closed.

The law must change to end the "mass exploitation" of workers by companies who use bogus self-employment to avoid granting basic rights like holiday pay and the minimum wage, MPs have said.

A United Kingdom government spokeswoman said the government recognises that "the labour market is not working for everyone". But we recognise that the labour market is not working for everyone which is why we commissioned Matthew Taylor to review modern working practices to ensure our employment rules and rights keep up to date.

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