Technological platform-based companies in the gig economy are bulldozing low-paid workers into self-employment and evading employment case law, a prominent expert on professional contracting has warned the Taylor Review.
Dave Chaplin, founder and CEO of Contractor Calculator addressed the Government-appointed “Jobs Tsar” Matthew Taylor and a panel of inquiry members at the first forum of the Employment Status Review in London earlier this week.
He distinguished between low-skilled, low-paid workers in the gig economy, who are vulnerable to exploitation, and highly skilled, well-remunerated contracting professionals working via Umbrella Companies or limited companies, who have actively chosen freelancing over salaried employment.
Mr Chaplin explained that an inequality in bargaining power is being cleverly exploited by platform-based companies to advance gig-working arrangements. The problem is that unlike conventional employers, these companies do not pay their workers for any intervals between jobs, a practice that enables them to circumvent employment case law and mutuality of obligation.
The platforms through which gig workers find work, he explained, utilise sophisticated ranking and queuing algorithms, which ensure that workers who do not place themselves on standby or who respond too slowly to advertised jobs fail to secure work. This is all to the benefit of the companies, Mr Chaplin said, as they are specifically seeking to avoid paying for standby time.
In law, the requirement to stand by for new jobs is regarded as exercising control and leads to mutuality of obligation. But, Mr Chaplin asked, does delegating some kind of control by a tech system still mean “control” as enshrined in existing case law?
He acknowledged that the Taylor Review faces some crucial challenges, particularly regarding the rights that lower-paid workers should be entitled to when they work for gig companies on a self-employed basis. These workers, he said, are representing companies, working regular hours and are required to be on standby without being paid. If they’re undertaking full-time work for a company and are on standby to secure gigs, they should, Mr Chaplin stated, be entitled to rights.
He added: “But, whilst it is important to protect the vulnerable workers, there are thousands of self-employed freelancers who are very happy with the way they work. We know from research we conducted last year that 80% of self-employed high-end professionals do not want rights or benefits. We therefore do not want any more onerous legislation imposed that reduces the flexibility of the whole market just because one sub-section needs more protection.”
He concluded by urging the Employment Status Review to exercise great caution in any proposed statutory definition of self-employment, which may result in unintended and destructive consequences for the UK economy.