Published: Wed, November 22, 2017
Markets | By Erika Turner

MPs demand law shake-up to protect gig economy workers

MPs demand law shake-up to protect gig economy workers

She added: "We say that companies should pay higher wages when they are asking people to work extra hours or on zero-hours contracts".

"Rachel Reeves, chair of the business, energy and industrial strategy select committee, said workers' rights should not be sacrificed for flexibility: "[Gig economy employers] like to bang the drum for the benefits of flexibility for their workforce, but now all the burden of this flexibility is picked up by taxpayers and workers.

In a draft bill published on Monday the Work and Pensions select committee and the Business, Energy and Industrial Strategy (BEIS) committee said personnel should be considered workers by default, with the onus on the companies using their services to prove otherwise.

A draft United Kingdom law bill meant to close loopholes in so-called "gig economy" employment practices has been published today by Parliament's Work and Pensions and Business, Energy and Industrial Strategy (BEIS) Committees.

The recommendations, which will be put forward to Prime Minister Theresa May, follow a major independent report she commissioned, the Taylor Review.

Deliveroo is a key employer in the gig economy.

"Recent cases demonstrate a need for greater clarity in the law to protect workers. It is time to close the loopholes that allow irresponsible companies to underpay workers, avoid taxes and free ride on our welfare system", Field said. "Responsible businesses deserve a level-playing field to compete, not a system which rewards unscrupulous businesses".

Matthew Taylor commented on the report, "This excellent report shows that whatever concerns the government has about my recommendations, parliamentary support is no longer a reason not to pursue them".

It says personnel should be classed as a "worker by default" to ensure access to basic rights such as sick pay because hundreds of thousands are now being "burdened" by risks associated with flexible working.

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They suggest that companies should be fined if they falsely classify workers and deny them benefits.

But the GMB Union said it was "disappointed at the limited ambition" of the new bill.

Helen Murphie, employment team partner at law firm Royds Withy King, said: "Making individuals "workers" by default would be a significant change to the current law".

The Work and Pensions, and Business, Energy and Industrial Strategy committees' report also calls for a loophole allowing agency workers to be paid less than permanent employees to be closed.

Employers' body, the CBI, though, said companies would be concerned.

"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.

A Business Department spokesman responded: "We have record numbers of people in work thanks to our flexible labour market, benefiting both workers and business".

Previous year two Uber drivers won a tribunal case demanding to be classified as "workers" rather than self-employed contractors, and while Uber has been appealing that decision it has yet to succeed.

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