Experts debate what could be done to clarify complex legal issue

Employment experts and politicians should come together to get worker categorisations right and create uniformity for employers, speakers at a House of Commons panel event have advised.

With a range of cases working their way through the courts, the issue of whether individuals should be classified as employees, workers or self-employed has been exercising politicians and legislators as well as HR professionals getting to grips with the growing gig economy.

Crawford Temple, chief executive of the trade body for umbrella companies, PRISM, emphasised that there needed to be government “enforcement” on worker statuses. “If there is no incentive for employers to read the ‘rule book’, there is little point writing it,” he said. “The employment industry needs to stop with the ‘sticking plaster’ approach to worker status on an individual basis.” 

Meanwhile, Nick Denys, policy adviser for social justice at the Law Society, said the government should introduce a workplace benefits package, and speculated that there would be a “good work Act or bill published over the next few years” to clarify the requirements of businesses that take on staff of different employment statuses, such as workplace benefits and rights.

Denys added that all workers should be given a contract outlining their employment status. Nigel Keohane, director of research at the Social Market Foundation, suggested that the employer’s national insurance contribution rate for taking on contractors should match that for employees, to de-incentivise bosses from falsely labelling workers.

Temple also branded the changes to the IR35 tax rules, which have meant public sector freelancers have had their employment status determined by the organisation hiring them since April, as “toxic”. “I feel we should throw it in the bin and start the [public sector contractors’ tax status] conversation again,” he said. “Brexit is an opportunity to clearly signpost any future changes made – legislation needs to be stripped back.”

The panel will be pulling together proposals to be reviewed by Rachel Reeves, chair of the business, energy and industrial strategy select committee.

The debate came just months after the publication of the Taylor review, which contained several suggestions for changes to how employment status is determined, such as a means by which workers could have their status determined without going to tribunal.

Addison Lee became the latest company to lose a legal battle over employment status last month, after a tribunal ruled that one of its cycle couriers was a ‘worker’ rather than an ‘independent contractor’ and should have been entitled to rights such as the national minimum wage and holiday pay.

In January, a tribunal decided that a cycle courier for CitySprint was a ‘worker’ rather than a self-employed freelancer. The case is likely to go before the Employment Appeal Tribunal before the end of 2017.

And in October 2016a tribunal ruled that two Uber drivers had been incorrectly classified as self-employed and should be treated as though they were workers, entitling them to a range of rights. Uber’s appeal against the decision is scheduled to be heard at the end of the month.

The Independent Workers Union of Great Britain also took food delivery company Deliveroo to the Central Arbitration Committee earlier this year to determine its cyclists’ employment status for collective bargaining purposes, and is currently awaiting the judgment.

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