The Government must ensure more rights for the self-employed
Did you know that 4.5 million people in the UK are now self-employed? Or that self-employment accounted for more than half the country’s employment growth since 2008?
It’s all true. In fact, self-employment is growing so quickly that — on current trends — there’ll be more self-employed workers in the UK by 2018 than people working in the public sector.
This is a profound change in the way people work, and it’s going to take years before policy-makers catch up with the consequences.
If you think about it, the Government rules that interact with the labour market — like the PAYE tax system — were created in an era when people worked in more traditional ways. As a recent McKinsey report pointed out: “A full-time job with one employer has been considered the norm for decades but, increasingly, this fails to capture how a large share of the workforce makes a living.”
There are obviously many reasons why self-employment is on the rise, such as the explosion of technology companies like Uber that connect people with opportunities to make money in a flexible way.
But however varied the causes, the truly important question is whether the self-employed are being exploited — and whether government should step in.
This was the subject of a court case in London last week, in which the judge ruled that two Uber drivers should be classed as employees, not independent contractors, meaning they ought to receive the minimum wage and other benefits.
As you might expect, Uber has criticised the judgment. According to them, 75 per cent of their drivers prefer to be self-employed than having traditional employment rights, because they get to choose their own hours and generate an income when they want to.
To be fair, this does tally with other surveys, which found that a majority of self-employed workers like the ability to work flexibly and be their own boss. For example, one poll suggested that for every self-employed worker who’d prefer a traditional job, more than two traditional workers hope to move in the opposite direction.
So how should policymakers respond? Well, the most important thing is that they do react in some way. The courts are intervening because there’s deep uncertainty about whether people working via digital platforms are employees or not. It’s vital that politicians clear up that ambiguity.
“We need to fight to ensure that self-employed people can have access to paid parental leave, social insurance in case they get sick and other fundamental rights.”
But I think we should go further. In my view, we need to fight to ensure that self-employed people can have access to paid parental leave, social insurance in case they get sick and other fundamental rights. The Royal Society of Arts (RSA) has done great work in this area, setting out detailed proposals that would uphold the flexibility that workers increasingly want, while also giving them important new safeguards.
As it happens, the chief executive of the RSA was recently appointed by the Prime Minister to lead a review into employment law in the age of Uber.
This was a really positive and pro-active move by the Government, and absolutely the right thing to do. If we can strike a fair balance between flexibility and protection, it’ll mean new opportunities for people to earn money and work in ways that suit them. It’s not going to be easy but it’s undoubtedly a prize worth fighting for.
by Rohan Silva
Originally published at www.standard.co.uk on October 31, 2016.