Inquiry into self-employed, agency workers and 'gig economy'

The Business, Energy and Industrial Strategy Committee has launched an inquiry into the future world of work, focusing on the rapidly changing nature of work, and the status and rights of agency workers, the self-employed, and those working in the 'gig economy'.

The inquiry also looks at issues such as low-pay and poor working conditions for people working in these non-traditional employee roles. The inquiry follows the Committee's recent inquiry into working practices at Sports Direct and the Committee's inquiry on the Digital Economy, which looked at the employment status of workers in the sharing economy.

The inquiry also follows recent news stories about working practices and the use of agency staff at Asos, concerns about couriers at Hermes, growing questions around the status of those working in the 'on-demand' economy, and the latest twist with the employment tribunal ruling in favour of 'self-employed' drivers seeking employment rights at Uber.

Changing nature of work

Iain Wright, Chair of the Business, Energy and Industrial Strategy Committee said: "In our Sports Direct inquiry we exposed shocking examples of poor working practices, of agency workers paid less than the minimum wage and exploited through dubious voluntary schemes, such as pre-paid debit cards and deductions from pay for insurance services. In recent months we've seen growing evidence of agency workers and those working in the 'gig economy' being exposed to poor working conditions. This growing trend raises questions over employment status and lack of worker rights.

"The nature of work is undoubtedly changing. It will change further with growing use of technology and a spreading of automation across the economy. This might provide flexibility and choice for some people, but unleash insecurity and squeezed working conditions for others.

"With these economic and technological changes shaking up the world of work, it's vitally important that workers are protected. In this inquiry we want to hear from all interested parties so that we can help the Government foster a vibrant, dynamic, innovative economy with laws that deliver the benefits of flexibility but which prevent exploitation".

ARC - 'Gig workers'

Whilst welcoming the scope and subject matter of the inquiry, the Association of Recruitment Consultancies (ARC) expressed concerns that the terms of reference (see below) do not sufficiently distinguish between agency workers and those operating in the so-called 'gig economy'.

Adrian Marlowe, ARC's chairman, said: "It is wrong to lump agency workers into the same mould as 'gig workers', who should be perceived as a different category. 'Gig' is clearly open to abuse as the model relies on an individual having a self-employed status that somehow allows gross payment to the individual whilst not affording any rights or protections. We question whether that is legally correct.

"Agency workers have well defined rights under the Agency Worker Regulations and are protected by the compliance requirements of the Conduct of Employment Agencies and Employment Businesses Regulations 2003. Hirers generally use agency workers for shorter term work and it is wrong to say, as the terms of reference suggest, that they use them just to avoid employment rights, which in any event, largely accrue only after two years' service.

"Hirers who falsely claim that someone is self-employed for tax purposes should be open to investigation, so why has HMRC not already investigated? Following the Uber decision last week, is it now going to enforce breaches of the National Minimum Wage and address failures to pay statutory benefits?

"ARC does not call for regulation of 'gig workers'; we call for HMRC to stamp out what is clearly an abuse of the tax system and worker rights. This area does demand modernisation to avoid confusion in the future."

Terms of reference

The terms of reference for the inquiry are:

1. Is the term 'worker' defined sufficiently clearly in law at present? If not, how should it be defined?

What should be the status and rights of agency workers, casual workers, and the self-employed (including those working in the 'gig economy'), for the purposes of tax, benefits and employment law?

2. For those casual and agency workers working in the 'gig economy', is the balance of benefits between worker and employer appropriate?

3. What specific provision should there be for the protection and support of agency workers and those who are not employees? Who should be responsible for such provision – the Government, the beneficiary of the work, a mutual, the individual themselves?

4. What differences should there be between levels of Government support for the self-employed and for employees, for example over statutory sick pay, holiday pay, employee pensions, maternity pay?

How should those rights be changed, to ensure fair protection for workers at work?

What help should be offered in preparing those people who become self-employed (with, for example, financial, educational and legal advice), and who should be offering such help?

5. Is there evidence that businesses are treating agency workers unfairly, compared with employees?

6. Should there be steps taken to constrain the use by businesses of agency workers?

7. What are the issues surrounding terms and conditions of employees, including the use of zero-hour contracts, definitions of flexible contracts, the role of the Low Pay Commission, and minimum wage enforcement?

8. What is the role of trade unions in representing the self-employed and those not working in traditional employee roles?

The Committee asks for written submissions by Monday 19 December 2016 with evidence sessions in the new year.