One size cannot fit all

Julia Kermode

I recently had the privilege of chairing a forum on modern employment.

I met a range of authoritative speakers who shared and aired their views about the changing nature of employment, the potential shape of Matthew Taylor’s new ‘dependent contractor’ and how an updated modern employment law framework is needed for today’s twenty-first century workplace.

It was an animated and insightful morning that saw lawyers, union reps, think tanks and trade bodies discuss and debate the challenges and opportunities that today’s United Kingdom faces. What became apparent is the chasm between traditional permanent employment and other types of atypical employment that exist, often all lumped together as the ‘gig economy’ and what rights and benefits all these workers do or do not have.

Self-employed people are not covered by employment law. They have very few rights at work.

Workers have some employment rights. These include the right to the National Living Wage or National Minimum Wage, protection against unlawful deduction from wages, minimum levels of paid holiday and rest breaks, protection against discrimination, and the right not to be treated less favourably if they work part time. They may be entitled to benefits such as Statutory Sick Pay and Statutory parental pay in some circumstances.

Employees have a full complement of employment rights. This includes everything that workers have, plus Statutory Sick Pay, parental pay, notice periods if their employment is ending, protection against unfair dismissal, the right to request flexible working, time off for emergencies and Statutory Redundancy Pay.

For HMRC purposes there are only two statuses: employed or self-employed. ‘Workers’ can fall into either tax category depending on the nature of their employment. This does not affect their employment rights. For example, someone who has the employment law status ‘worker’ but is self-employed for tax purposes would still be entitled to ‘worker’ rights. Conversely, someone who is designated ‘employed’ for tax purposes (e.g. under IR35 legislation) but does not have an employment contract would not automatically be entitled to employee or worker rights.

It was interesting to hear James Farrar from the Independent Workers Union of Great Britain. James is the Uber driver who successfully took Uber to court last year to win a landmark case when the High Court ruled in favour of his cause that drivers should be workers entitled to the national living wage, holiday and sick pay, as well as paid breaks and Uber should class its drivers as employees, rather than self-employed freelance operators. Hearing his experiences of their practices was at times chilling and it was his case that undoubtedly kick-started the government’s review of today’s modern workplace. Whether or not the ‘dependent contractor’ phrase sticks is one thing, the intention is not purely renaming the term of ‘worker’ but also to change the way this category is defined by upping the ‘control’ element and decreasing the ‘substitution’ element. Whatever the definition, contingent workers can be at risk of exploitation, so corporates should take responsibility for all their workers and treat them all fairly, however they are engaged. Some speakers argued that more protection should be given to the precarious worker over the privileged worker; the former might have no choice in how they work, while the latter might have chosen a career to become self-employed.

We were all agreed that flexibility is a huge advantage for the UK economy, and we saw a graph illustrating that the UK workforce is way ahead of its international cousins in this respect. However, the cases of poor practice and exploitation seem to be on the increase and there was also a strong feeling that we must not turn a blind eye and ignore it. The government must take some responsibility to regulate, reform and reach out so that it balances the rights and responsibilities in the labour market, which also means balancing the tax system so that it is fair for all. It was also pointed out that 500,000 workers in the UK are not earning enough to be entitled to any rights or benefits, which is an alarming fact.

Flexibility must work both ways and many supported Matthew Taylor’s view that the balance of power is often too heavily biased towards the businesses that engage such workers. Brexit was mentioned only briefly, but everyone is concerned that employment rights are preserved and that the UK remains a competitive location for businesses in the global marketplace. The session confirmed that we are indeed living and working in interesting times and whatever your view of the contingent workforce – precarious vs. secure, necessity vs. choice, modern vs. outdated, flexibility vs. constrained – doing nothing does not appear to be a realistic option.

Julia Kermode is chief executive of the Freelancer and Contractor Services Association (FCSA), the UK’s largest independent trade association, whose members provide professional support services to freelancers and contractors.