Gig economy reforms should go further, experts say

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Plans to reform gig workers' rights need further detail to be fully effective, experts have said

According to a report from The Guardian last week, ministers are hoping to implement several recommendations from last year's Taylor Review.

The new proposals include providing clarity over what constitutes 'worker status', giving gig workers the right to request a fixed-hours contract after 12 months, offering notice periods and compensation for cancelled shifts, and naming and shaming employers who fail to pay out following employment tribunals.

In a separate review, ministers are said to also be planning to impose fines on companies who break the rules on agency worker regulations.

Frances O'Grady, general secretary of the TUC, said that these plans are inadequate to improve rights for gig workers. “If the reports are true the government has taken one step forward and two steps back. Scrapping the agency worker loophole is a big deal and something unions have long campaigned for. But these plans appear to do little to help zero-hours workers and those trapped in sham self-employment," she said.

But Benedict Dellot, head of the RSA’s Future Work Centre, countered that the plans mark a significant shift in the treatment of gig workers as the number of contract workers rises.

“While the government’s reforms may seem timid in isolation, taken together, they amount to a substantial package of new rights for workers in the new economy," he told HR magazine. "Around 900,000 zero-hours contract workers will benefit from the new right to request a fixed-hours contract.

"Millions more will aim to benefit from the new decision to name and shame those who fail to pay out after employment tribunals. These are the kind of pragmatic changes that will protect workers without diluting the flexibility that means we have the lowest unemployment rate in a generation."

However, the government’s proposed changes to IR35 legislation, which are intended to crack down on the ‘fake self-employed’, signal that more could be done to protect the self-employed, Dellot added.

"While the government may be making headway in regulatory reform, the same cannot be said for modernising the tax system," he said. "The reason so many people are falsely self-employed, and therefore forego important protections, is because their de facto employers do not have to shell out in employers' National Insurance contributions. The government needs to show courage in asking more from taxpayers where it is due, for protections to be made available across the board.”

Jonathan Rennie, partner at law firm TLT, said that plans to simplify the definition of a worker could prove difficult to implement. "The idea of simplifying the legislative definitions of worker, employee and self-employed contractor across employment and tax legislation is very ambitious given the complexity and nuances of the legislation and the interplay with the infinite varieties of working arrangements. The ways in which work and technology are evolving makes it very tricky to capture precise definitions and to provide clarity in ways that will serve all parties for years to come,” he said.

“At the moment there is a sliding scale between employee and worker," he explained. "This spectrum of rights and qualifications makes it difficult to precisely identify the 'pivot point' where rights expand. A legal definition of self-employed would also be helpful as that does not currently exist and seems an obvious omission."

Rennie added that the right to request a temporary contract would only be helpful if there is a suitable remedy in place. "The right to request temporary or fixed-term contracts after 12 months is really only of use where there is an effective remedy and this is something that the government will need to think about. At the moment, where an employer fails to provide an employment contract, the remedy is up to four weeks' pay but that is not a standalone claim,” he said.

“The employee must have another complaint to piggyback on. A more effective remedy could be a default position, for example, which would be more of a deterrent for employers and more favourable to the individual.”

While compensation is ‘admirable’, further clarity on contracts and the calculation of pay would be more effective, he said: "Compensation for cancelled shifts appears to be an admirable objective, but the more fundamental points are status clarification and contract precision since they are the foundation that enables the calculation of matters like average hours and pay."

The news follows the Labour party's proposals for a radical reform of workers' rights at its annual conference, including an increase in firms offering worker share schemes.

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