MPs accuse 'gig economy' giants of exploitation

A business lobbyist has been forced to stick up for self-employment after a committee of MPs laid into companies they believe are exploiting it for their own ends.

The Institute of Directors said that while it was right for the Work and Pensions Committee to be concerned at work exploitation and misclassification of status, it stressed that it is also the case that self-employment is “legitimate”.

Issues raised by the committee, such as losses to the public purse and workers being wrongly told that being without rights as self-employed is the only way to work flexibly, must therefore be addressed “in a targeted way after careful consideration,” the IoD says.

But in reflecting on the committee’s findings, Frank Field MP already announced a set of recommendations, having interviewed ‘gig economy’ giants like Uber, and the people who work for them.

“This inquiry has convinced me of the need to offer ‘worker’ status to the drivers who work with those companies as the default option,” he said.

“This status would be a much fairer reflection of the work they undertake which seems to fall between what most of us would think of as ‘self-employed’ or ‘employed’.”

Genuinely self-employed freelancers will be reassured that the Labour MP differentiated between what they do, and what couriers and drivers for the gig economy giants do. As well as Uber, Amazon, Hermes and Deliveroo were also quizzed.

“Self-employment can be genuinely flexible and rewarding for many,” added Mr Field, in another acknowledgement that legitimate freelancers will welcome.

“[The Department for Work and Pensions] is seeking to support entrepreneurship without subsidising unprofitable self-employment.”

Despite the supportive comments about bonafide self-employment, the committee sounded critical about a lack of barriers between aspiring gig workers and their potential engagers.

It said: “Where there are tax advantages to both workers and businesses in opting for a self-employed contractor arrangement, there is little to stand in the way.”

Elsewhere in their report, the MPs strongly suggest that Philip Hammond, the chancellor, was correct when he tried to bridge the gap between self-employed NI and employed NI.

Their report summary recommends: “The incoming government should set out a roadmap for equalising employee and self-employed National Insurance Contributions.”

Again though, the IoD cautioned: “MPs are right to investigate whether current employment law is clear enough for companies and individuals in the gig economy, but any new rules must not stifle job creation or the ability of people to work however they choose.”

The committee concluded by saying the next government must “close the loopholes” that let gig economy giants “g et all the benefits,” while its workers take “all the risks” -- all at the expense of the state, “with little [tax] contribution from the companies involved.” It condemned the work practices of some gig economy giants as “appalling.”

Front-page image credit: Berliners on Bicycles by Akuppa John Wlgham

 

3rd May 2017

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