Frank Field MP
Your MP for Birkenhead
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Gig economy: now is the time to ease the burden for workers

09 July 2017
Observer When Matthew Taylor, chief executive of the Royal Society of Arts, was appointed last year by Theresa May to lead a review of modern employment practices, he said it would be “really important to get out and listen to people”, as opposed to merely crunching data and numbers.

Let us hope he has listened to some of the same people as Frank Field, the former chair of the work and pensions committee. Field’s latest report from the frontline of the gig economy told some depressing, if by now familiar, stories. Workers can be forced into forms of self-employment against their will. Contracts can offer effective wages of less than £2.50 an hour and be enforced with threats of fines or loss of work.

Field’s latest report drew on accounts from workers at Parcelforce, DPD and British Car Auctions but it echoed the findings of his earlier work, including the original review that prompted May to appoint Taylor. In the coming days the Taylor report will be published and it will present the first test of the Conservatives’ manifesto promise to “make sure that people working in the ‘gig’ economy are properly protected”. What should it say?

The first task is to end the absurdity of bogus self-employment. This employment category is plainly being abused by some companies whose workers continue to be told how to behave like regular employees for all practical purposes – their work can be directed down to exact details, including time, hours, place and uniform. The only real difference is that the employer is able to avoid paying employers’ national insurance and pension contributions, and offering protections such as maternity and sick pay. It’s a scam. Massive benefits accrue to the employers and very few to the workers.

The best solution is backed by the TUC and Field: reverse the burden of legal proof so that companies must demonstrate that someone is not an employee. To expect workers to go to an employment tribunal, or even a court, to establish normal employment rights is unfair and impractical. Taylor could propose a fast, simple and transparent system for assessing self-employed status. The current system is either a muddle, or an invitation to unscrupulous companies to see what they can get away with.

A second area is more contentious. It seems unlikely that Taylor will propose abolishing zero-hour contracts because, in some cases, their flexibility benefits both sides. That will not be universally popular, but it would be a realistic position. But Taylor could – and should – establish the principle that companies should pay a premium for flexibility. In regular work that is paid by the hour, companies expect to pay overtime. The same approach would also operate with zero-hour and short-hours contracts: contracted hours would be paid at a standard rate and anything on top would attract a higher hourly rate. As the TUC has argued, such a system would also “create a financial incentive for employers to reduce their reliance on insecure forms of work”.

Third, Taylor must ensure that proposals to promote the “workers’ voice” within companies mean something substantial. The prime minister has an appalling record of obfuscation in this area. She promised to put workers in boardrooms but then watered down the idea to say an existing non-executive director could represent them.

If Taylor wants to establish German-style “workplace citizenship” in the UK, he must set out the practical steps. In the gig economy, a blast of old-fashioned collective bargaining could do more to improve the lot of workers than technical tweaks to current employment laws. Andrew Haldane, chief economist at the Bank or England, was right when he argued last month that a period of “divide and conquer” has left workers in the UK less able to bargain for higher wages. Taylor must avoid May’s wishy-washy approach and acknowledge that the best people to represent workers’ interests are workers themselves.


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