The Work and Pensions and Business, Energy and Industrial
Strategy (BEIS) Committees are today publishing a joint report
and draft Bill to close the loopholes that allow companies
to use bogus “self-employment” status as a route to cheap labour
and tax avoidance, saying the law must not allow willingness to
exploit workers to be a competitive advantage.
Rt Hon MP, Chair of the Work and
Pensions Committee, 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.
The Bill would put good business on a level playing field, not
being undercut by bad business.
“It is time to close the loopholes that allow irresponsible
companies to underpay workers, avoid taxes and free ride on our
welfare system.”
MP, Chair of the Business,
Energy and Industrial Strategy Committee,
said: “Uber, Deliveroo and others like to bang
the drum for the benefits of flexibility for their workforce but
currently all the burden of this flexibility is picked up by
taxpayers and workers. This must change. We say that companies
should pay higher wages when they are asking people to work extra
hours or on zero-hours contracts.
"Recent cases demonstrate a need for greater clarity in the
law to protect workers. Responsible businesses deserve a
level-playing field to compete, not a system which rewards
unscrupulous businesses. We need new laws but also much tougher
enforcement, to weed out those businesses seeking to exploit
complex labour laws, and workers, for their competitive
advantage.”
Employment Status
- The current situation puts an unacceptable burden on workers to
address poor practice through an expensive and risky court case
while the companies themselves operate with relative
impunity.
- Clarified legislation to protect the legitimately self-employed
and a new presumption of “worker by default” 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.
- An obligation on employment tribunals to consider the
increased use of higher, punitive fines and costs orders if an
employer has already lost a similar case, and enabling use of
class actions in disputes over wages, status and working time,
would reduce the chance and opportunity for employers to simply
"wait and see" whether individuals are willing to risk pursuing
their rights.
Minimum wage
- A flexible labour force can benefit workers, consumers and
businesses – but it is not acceptable that the gig economy burden
workers and taxpayers with the risks of this flexibility.
- Workers should not be faced with a choice between not
working, or working for below minimum wage.
- The Government should rule out introducing any
legislation that would undermine the National Minimum
Wage/National Living Wage.
- The loophole that enables agency workers to be paid less than
permanent employees doing the same job must be closed.
- Companies should either guarantee hours that reflect the
periods worked each week, or compensate workers for uncertainty.
Enforcement
- Currently, employers need only fear an inspection of
their labour practices “once every 500 years”—and receive only
paltry fines if they are found to be breaking the law.
- The enforcement bodies and the Director of Labour Market
Enforcement urgently need more resources - paid for by a
significant increase in fines for offending employers - to root
out bad practice.
- Companies that flout the law, and those that tolerate
exploitation in their supply chains, should be “named and
shamed”. In the longer term, embargoing of goods from
non-compliant businesses has potential as a "very strong
incentive" for retailers to promote compliance in their supply
chains
- Enabling enforcement bodies to issue punitive fines for
noncompliance would also help ensure that the risks of being
caught outweigh the gains companies stand from illegal pay and
practices.
- Concentrated "deep dives" in industry sectors and
geographic areas, where there is evidence of abuse, by all the
enforcing bodies should become a regular part of the armour to
protect vulnerable low paid workers.
