Employment Law Update – April 2017

Report from Work and Pensions Committee condemns bogus self-employment practices in the Gig Economy

The Work and Pensions Committee has published a report suggesting that the Government must stop ‘bogus’ self-employment practices, which are potentially creating an extra burden on the welfare state whilst also reducing tax contributions to HMRC.

As part of the investigation the Committee heard from representatives from some of the major players in the Gig Economy such as Uber, Amazon and Deliveroo, and also from some of the individuals working for them.

The Chair of the Committee Frank Field said “This inquiry has convinced me of the need to offer ‘worker’ status to the drivers who work with those companies as the default option…….This status would be a much fairer reflection of the work they undertake which seems to fall between what most of us would think of as ‘self-employed’ or ‘employed’.”

Some of the main findings of the Committee are: –

  1. Designating workers as self-employed because their contract offers none of the benefits of employment puts ‘cart before horse’. Companies propagate the myth of self-employment, one which frequently fails to stand up in Court.

 

  1. Where there are tax advantages to both workers and businesses in opting for a self-employed contractor arrangement, there is little to stand in the way.

 

  1. An assumption of the employment status of ‘worker’ by default rather than ‘self-employed’ by default, would protect both those workers and the public purse.

 

  1. The self-employed and employees receive almost equal access to services funded by national insurance, yet the self-employed contribute far less. The incoming Government should develop a roadmap to equalise employee and self-employed national insurance contributions.

 

  1. The Department of Work and Pensions needs to ensure that its resources reflect the positive contribution that self-employment can make to society and the economy. This may require an expansion of specialist support in job centres.

 

The Committee also acknowledged that self-employment can be genuinely flexible and rewarding for many although employees and workers can and do work flexibly and that the main motive for classing designated workers as self-employed by these businesses is profit. Essentially these businesses get all of the benefits whilst workers take on all of the risk and the state expected to pick up the tab.

The Committee has strongly suggested that ‘It is up to the Government to close the loopholes that are currently being exploited by these companies, as part of a necessary and wide ranging reform to the regulation of corporate behaviour.

The Government has already signalled its intention to tighten up the law in this area and we can expect new legislation in the event that a new conservative government is re-elected next month. This might also form part of some of the other political party’s election manifestos which are scheduled to be published imminently.

In the meantime, Uber has been granted leave to appeal last October’s employment tribunal first instance decision.

 

Employment Tribunal awards £2 to Claimant who was denied a companion at a disciplinary appeal hearing

In Gnahoua -v- Abellio London Limited, the employment tribunal held that the employer breached the Claimant’s right to be accompanied when it refused to allow his chosen companions to accompany him at a disciplinary appeal hearing.

The Claimant who was a bus driver was originally dismissed from his employment when he was caught looking at his iPad whilst driving.

As part of the appeal process the Claimant informed his former employer that he wished to be accompanied by 2 brothers who had formed the PTSC Trade Union of which the Claimant had become a member.

The employer however refused to allow the Claimant to be accompanied by these two brothers on the basis that it had previously banned both brothers from representing staff at its internal hearings. The employer’s reasons were that one of the brothers used threatening behaviour towards members of staff and that both brothers were dishonest.

Ultimately the Claimant attended the appeal hearing unaccompanied and without representation. The employer upheld its decision to dismiss the Claimant.

The employment tribunal accepted that the employer had technically breached the Claimant’s right to be accompanied at the appeal hearing.

However, the employment tribunal went on to award a nominal sum of £2 on the basis that the employer had strong grounds for being unhappy with the choice of companion.

This case serves as a useful reminder that employers should always allow employees the right to be accompanied at internal disciplinary and appeal hearings by either a work colleague or a trade union representative, and that they ought not to unreasonably refuse the choice of companion selected by an employee.

Please call Steven Eckett, our employment solicitor, on 020 7998 7777 for more information or email him at steven.eckett@bloomsbury-law.com.

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Employment Law Update – April 2017

Leading Solicitors in London