Possible reforms to the gig economy delayed
A report commissioned by Matthew Taylor, Downing Street’s advisor on modern work, published in July, called for changes to employment practices to reflect current business models. The main focus of the report was the gig economy, a growing area of the labour market which has long been criticised for exploitation.
According to an April 2017 parliamentary report, 15.6% of the total full time and part time workforce are self-employed. 1.3 million of those are considered part of the gig economy, people hired as independent contractors and freelancers who are paid per job (or “gig”) as opposed to hourly or weekly. This gives the worker flexibility but no job security or employee rights such as sick leave, maternity leave or holiday pay. Gig workers are also not guaranteed minimum pay, a loophole which can give companies access to cheap labour.
Many gig workers are taxi drivers (working for companies such as Uber), delivery couriers (Deliveroo, Hermes etc), as well as various skilled and unskilled workers in building, cleaning, removals and DIY.
The reforms recommended in Taylors report were expected to improve pay and conditions for the many gig workers in the UK, by redefining who are considered a worker, an employee and self-employed. The reforms are also expected to bring a higher minimum wage for non-guaranteed hours and overtime. This would undoubtedly mean costs for the companies involved, but should reduce the number of court cases fought by contractors and businesses, due to disagreements over pay and conditions. Parts of the reform have now been passed over to chancellor Phillip Hammond because they might affect National Insurance contributions.
But the government has recently delayed the reforms which would have given greater rights to those working in the gig economy. This is thought to be because of the Treasury’s fear that any increase to labour costs could drive the UK’s employment rates down, which could be catastrophic in the wake of Brexit.
The reforms have been delayed for a year, so gig workers will need to wait longer for legislation which would give them more protection. “I would rather it was later and stronger rather than earlier and weaker.” Matthew Taylor commented.