MPs draft bill to close loopholes used by 'sharing economy' employers

Nov 22, 2017, 00:42
MPs draft bill to close loopholes used by 'sharing economy' employers

It wants clarified legislation to protect the legitimately self-employed and a new presumption of "worker by default" that would require companies to provide basic safety-net standards of rights and benefits to their workers, or prove that their working practices are genuinely reflecting of self-employment.

Employers that wrongly classify their workers as self-employed should be fined, two House of Commons committees proposed this week in what would amount to a major clampdown on the concept of false self-employment.

The Work and Pensions Committee and the Business Select Committee have drawn up a draft bill which would assume "worker by default", to make firms pay holiday and sick pay.

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Just earlier this month it said it would fight on after losing its appeal against an employment tribunal ruling on the rights of Uber drivers.

The bill said the law around the gig economy should be tightened to stop companies using false self-employment status for "cheap labour and tax avoidance", to prevent the law being used to facilitate workers' exploitation for competitive advantage. "It is time to close the loopholes that allow irresponsible companies to underpay workers, avoid taxes and free ride on our welfare system", he said.

"The two Committees are today presenting the Prime Minister with an opportunity to fulfil the promise she made on the steps of Downing Street on her first day in office, with a draft Bill that would end the mass exploitation of ordinary, hard-working people in the gig economy", said Frank Field, chair of the Work and Pensions Committee.

"The Bill would put good business on a level playing field, not being undercut by bad business".

MPs have put forward plans to close numerous loopholes in the law that have allowed the gig economy to flourish. It also suggests "punitive fines" for those who have previously been found to have broken employment law and "naming and shaming" for non-accidental breaches by businesses and supply chains.

The Independent Workers Union of Great Britain, which brought the case against the food delivery company, said the judgement shows that riders "are not satisfied with their current terms and conditions and want worker rights", including holiday pay and minimum wage. They also call for more resources to be allocated to the Director of Labour Market Enforcement.

The bill also called for loopholes that enables agency workers to be paid less than permanent employees doing the same job to be closed.

A United Kingdom government spokeswoman said the government recognises that "the labour market is not working for everyone".

Rachel Reeves, the Labour MP who chairs the business committee, said taxpayers and workers were picking up the burden of the "flexibility" offered by Uber, Deliveroo and others like them. But we recognise that the labour market is not working for everyone which is why we commissioned Matthew Taylor to review modern working practices to ensure our employment rules and rights keep up to date.