Tightening up on “self employed” status – draft bill

The work and pensions committee and the business select committee has jointly published a report into working practice of so called gig economy workers which states that they face an “unacceptable burden” of having to prove they are workers – rather than self-employed – to access basic employment rights.

There is now in place a “draft bill” recommending that individuals in the gig economy be considered ‘workers by default’, entitling them to employment rights and benefits such as holiday and sick pay. Alternatively, companies will have to prove that their working practices genuinely mirror self-employment.

The bill suggests that 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.

The bill, which will now be put before the Prime Minister for consideration, is described as a proposal to “end the mass exploitation” of people in the gig economy.

Employment lawyers, however, warned that the bill’s proposal to place the onus of choosing the appropriate employment status on employers could lead to an unfair burden on businesses. If the onus is on the employer to prove self-employed status in any claim, there will need to be careful thought given to deterring vexatious claims.

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