In an analysis of the government’s proposed reforms following the Taylor Review, the Association of Independent Professionals and the Self Employed (IPSE) has warned that plans to shift the boundary demarcating workers from self-employed people may have “dire” consequences.
IPSE’s Policy Development Manager, Jordan Marshall, concedes that the government’s response to the Taylor Review (available here) is comprehensive and proposes significant reforms. The changes could have “far reaching” effects on the country’s 4.8 million self-employed people, which includes independent contracting professionals and other freelancers, but one is positively dangerous.
IPSE shares government concerns that the existing ambiguity surrounding employment status can be exploited by rogue employers to justify falsely categorising their staff as self-employed for their own financial interests. This is why the organisation has campaigned for a legal classification of self-employment that would prevent the dramatic, near-overnight upsurge in spurious self-employment among low-paid sectors such as cleaning. As Marshall puts it, “this cannot be right.”
Yet the government has eschewed the legal definition option, proposing instead to legislate on the current tests for employment status based on the terms ‘worker’ and ‘employee’, a move IPSE warns will create tension and lead to “fractious debates” during the consultation, which closes in June. Positively, the government plans to legislate on defining whether someone is “in business on their own account” as part of the test for ‘worker’ status, a development which would include whether the individual has the right to substitute another worker to carry out work and to negotiate a fee for their work.
But both Taylor and the government appear intent on lowering the number of self-employed in favour of ‘workers’ so that they will be entitled to benefits such as holiday and sick pay. They propose de-emphasising two conventional indicators of self-employment: the right to reject work and the ability to send a replacement or substitute. Rather, they plan to elevate the ill-defined concept of ‘control’ to become the sole criterion.
“This is a dangerous path to go down, with the intention of shepherding people away from self-employment into the ‘worker’ category.
“The unintended consequences of this approach could be dire. The government should be extremely careful about pushing people away from self-employment against their will.”
He cites a recent study from the Department for Business, Energy and Industrial Strategy which showed that most of those engaged in the gig economy were content with this way of working, especially with the flexibility and independence it offered.
Marshall urges the government ‘not to do anything that pushes people out of self-employment against their will, hitting our flexible labour market which underpins the UK economy.’