The Work and Pensions and Business, Energy and Industrial Strategy Committees has published a joint report and draft bill that aims to close some of the loopholes in the gig economy, following the publication earlier this year of the Taylor report and highly publicised cases against Uber, Deliveroo and others.
The Bill has proposes that ‘worker’ status would be the default legal position for those employed in the gig economy together with fines for firms that falsely classify workers as self-employed.
MP’s said that firms in the “gig economy” are exploiting loopholes in employment law leaving workers worse off, leaving cab drivers and delivery riders facing an ‘unacceptable burden’ of having to prove they are workers.
Rt Hon Frank Field MP, Chair of the Work and Pensions Committee, said:
“The Bill would put good business on a level playing field, not being undercut by bad business. It is time to close the loopholes that allow irresponsible companies to underpay workers, avoid taxes and free ride on our welfare system.”
The government has commissioned Matthew Taylor, chief executive of the Royal Society of the Arts, to review employment practices.
Mr Taylor’s report, published in July, called for reform of the law so that gig workers are reclassified as dependent contractors who could then maintain flexibility whilst receiving statutory benefits.
“We are considering his report carefully and will respond in due course,” a government spokeswoman said.
Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee said:
“Recent cases demonstrate a greater need for clarity in the law to protect workers. Responsible businesses deserve a level playing field to compete, not a system which rewards unscrupulous businesses. 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.”
The committees found that the current situation puts an unacceptable burden on workers to address poor practice through an expensive and risky court case while the companies themselves operate with relative impunity. Clarified legislation would protect those who are legitimately self-employed and creating a new presumption of ‘worker by default’ would mean that companies are required to provide their workers with a basic safety net of rights and benefits – or prove that their working practices genuinely do reflect self-employment.
Enrique Garcia is an employment law consultant for the ELAS Group. He says:
“It appears as if the aim of this Bill is to switch the burden of proof, meaning that it will be for companies to prove that the people they engage are not workers rather than the onus being on the staff member to prove that they are workers. This shouldn’t have much impact on employer-employee relationships but it will greatly impact on the gig economy and will make it easier for workers to gain their rights where they are indeed workers. Under the terms proposed in this bill the company gets the harder ride as the Government looks to crack down on unscrupulous practice and make it easier to enforce such statutory rights as National Minimum Wage/National Living Wage, breaks and holiday pay.
“The Bill does not spell the end for companies engaging self-employed contractors. It just means that it is now more important than ever that the relationship between the company and a worker needs to be accurately described as inaccuracies will be easier to challenge if the Bill passes.”