Proposed legislation drafted by two influential select committees would crack down on ‘flexible’ employers such as Uber and Deliveroo
Two influential parliamentary committees have published draft legislation that would crack down on the so-called “gig economy” employment practices used by the likes of Uber and Deliveroo, putting pressure on the government to take action.
The report by the work and pensions select committee and the business, energy and industrial strategy (BEIS) committee aims to close loopholes that that have allowed “irresponsible” employment practices to proliferate since the 2008 financial crisis.
“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, the Labour MP who chairs the work and pensions committee.
He said the the prime minister could fulfil a promise to reduce inequality in Britain by backing a bill “that would end the mass exploitation of ordinary, hard-working people in the gig economy”.
‘Cross-party support’ for reforms
Rachel Reeves, the Labour MP who chairs the business committee, said taxpayers and workers were picking up the burden of the “flexibility” offered by Uber, Deliveroo and others like them.
“We say that companies should pay higher wages when they are asking people to work extra hours or on zero-hours contracts,” she said.
The report follows a government report carried out by Matthew Taylor on the modern labour market, published in July.
Taylor said support from the select committees showed there was cross-party support for legislation to increase the pay of those without guaranteed hours.
The draft would seek to remove a loophole called the “Swedish derogation” that allows temporary staff from agencies to be paid less than employees for the same job, something recommended in Taylor’s report.
‘Worker by default’
It would also introduce a presumption of “worker by default”, requiring companies to prove workers are genuinely self employed in the case of a dispute, and would oblige employment tribunals to consider higher fines on employers who repeatedly break the law.
The Independent Workers Union of Great Britain (IWGB) argued more needed to be done, saying the report did not “call for extending more basic employment rights – such as statutory sick pay or right to claim unfair dismissal – to workers”.
The GMB union also said it was disappointed.
“The fact remains that without real investment in HMRC and a political will to get tough on rogue employers who are cheating the British taxpayer out of millions and reaping profits out of worker exploitation, then there will be no significant change,” said the GMB’s general secretary, Tim Roache, while allowing the proposals “may make a small difference”.
But the CBI, which represents employers, said the plans would take away the flexibility companies need to “grow and create jobs”.
‘Targeted changes’ needed
“The issues that have been raised can be addressed by more effective enforcement action and more targeted changes to the law,” said CBI managing director for people and infrastructure Neil Carberry.
The Business Department said the government would “respond in due course”, while pointing out there are “record numbers of people in work thanks to our flexible labour market, benefitting both workers and business”.
Of the UK’s 5 million self-employed – about 15 percent of the workforce – around 1.6 million are thought to work for firms such as Uber and Deliveroo, who class themselves as agencies and their workers as independent contractors.
Other insecure forms of work include another 900,000 on zero-hours contracts and 1.6 million are on temporary or agency contracts.
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