Gig economy proposals put further pressure on PM and Chancellor ahead of Budget

The publication by the Work and Pensions and the Business, Energy and Industrial Strategy Select Committees of draft legislation designed to provide employment protections for gig economy workers puts further pressure on the Prime Minister and the Chancellor ahead of the Budget.

Commenting on the joint publication by the Select Committees of the draft Bill, Carolyn Brown, employment law partner and head of RSM Legal said: 

‘In publishing their draft Bill, the DWP and BEIS select committees are piling pressure on the Government to respond positively to key recommendations of Matthew Taylor’s review.

‘The joint select committees are recommending new definitions for employment status which is the gateway to rights covering the National Minimum Wage, trade union recognition, holiday pay and discrimination rights. 

‘Proposed measures include expanding the definition of worker, introducing requirements to give new joiners a rights statement and a status category on day 1, a new legal definition of ‘independent contractor’ for those who are neither employees nor workers, and mechanisms to improve workforce engagement in the business.

‘To determine the correct status, the committees have set out a long list of factors for employers to consider. While these are a better framework than the existing definitions which are general and focus mainly on personal service leaving case law to fill in the gaps, businesses and individuals will still need to evaluate many factors without a road map as to which is decisive.

‘Importantly, the draft Bill proposes that the onus should be on the employer to demonstrate that an individual is self-employed whereas currently, it is down to the individual to prove their worker or employee status. 

‘However, the draft Bill doesn’t address one of the broader issues in the report, namely the mismatch between tax law and employment law and the need to work towards greater alignment of the two frameworks. It will be interesting to see if Chancellor Philip Hammond seeks to address this point when he delivers his Budget Statement on Wednesday.’