Parliamentary Bill hopes to tackle so-called ‘bogus’ self-employment

A draft Bill put together by the Parliamentary Work and Pensions and Business Committees aims to tackle what MPs say are loopholes in employment law that allow firms to use ‘bogus’ self-employment status to hire cheap labour and avoid granting basic rights, such as holiday pay and the minimum wage, to workers.

The Bill says that all personnel should be considered workers ‘by default’, with the onus on the firms using their services to prove otherwise. According to the chair of the Work and Pensions Committee, Frank Field, this “would end the mass exploitation of ordinary, hard-working people in the gig economy” and would “put good business on a level playing field, not being undercut by bad business”.

In recent months, several gig economy firms have been embroiled in a series of legal battles over how they treat those who work for them. Towards the end of 2017, Uber lost its bid to ‘leapfrog’ an appeal to the Supreme Court against a landmark ruling ordering it to treat its drivers as employees.

However, around the same time, Deliveroo won a case at the Central Arbitration Committee (CAC), which ruled that the food delivery app’s couriers are self-employed, rather than workers. The CAC said it made the decision because Deliveroo’s riders have the right to put forward a substitute to do their work for them.

Reaction to the Bill has been mixed so far, with one commentator saying that making individuals ‘workers’ by default would be a significant change to the current law.

The new rules would provide protection to individuals who work flexibly and make it more difficult for businesses to exploit the system by relying on self-employed people to carry out work.

However, she added that it will mean an additional financial burden for many businesses that operate flexible workforces. Such firms will also face additional administrative and financial costs if they are obliged to provide written statements of terms, obligations and rights to workers in the future.

At The Fish Partnership, we can provide ongoing support and payroll advice where necessary. If you would like more information about our payroll services, please contact us.