Two commons committees have called for moves to ‘crack down’ on the gig economy and prevent employers from exploiting ‘loopholes’ in employing people. Julia Kermode, chief executive of The Freelancer & Contractor Services Association (FCSA) responded to this call saying: “Large numbers of highly skilled professionals choose self-employment because it gives them the freedom and flexibility to operate as a business in their own right. However there are incidences where self-employment is forced upon people inappropriately but only a small number are in “precarious” roles and being exploited. There is a suggestion that 1.6 million people are working in the gig economy – the likes of Uber and Deliveroo drivers – but this seems a vast over-estimation as gig economy platforms did not exist a few years ago and ONS figures for self-employment do not show a corresponding increase of 1.6 million in recent years.”
Despite this, Kermode asserts employers should treat their workforces properly so that exploitation cannot happen. “It is unacceptable that some workers are unaware of their rights so we agree with MPs that there should be greater clarity around employment status and clear statement of rights from day one so that people can make an informed choice about whether they accept a gig,” she says.
“As the gig economy is on the rise we need to act to protect the vulnerable and precarious whilst not unfairly penalising genuinely self-employed people," says Kermode. "Introducing fines for falsely classifying workers as self-employed could be an effective deterrent and go some way towards preventing exploitation of those in precarious roles, but care is needed because employment status is complex and experts don’t always agree, so fines could unfairly penalise companies that have simply made a mistake rather than deliberately set out to exploit their workforce.”
Dave Chaplin, CEO and founder of ContractorCalculator, also welcomes the intentions of the MPs: “I welcome these ideas to protect the low paid vulnerable workers. It’s wrong for firms to falsely classify workers as self-employed when they clearly aren’t and a penalty for doing so could make an excellent deterrent,” he says. “I would suggest that corporate firms found to have falsely classified workers as self-employed should pay the employers NI they have avoided paying on top of the penalties.”