The Fabian Society and Joseph Rowntree Foundation are calling on Andy Burnham to prosecute gig economy companies for alleged "bogus" self-employment practices. They argue millions of workers are denied statutory rights like parental leave and redundancy pay, urging a shift in the burden of proof to employers.
This situation highlights a significant gap in worker protections for millions in the gig economy, potentially impacting their access to fundamental employment rights and financial security, and raising questions about the effectiveness of current labor laws and enforcement mechanisms.
The Fabian Society and the Joseph Rowntree Foundation have issued a joint report urging Greater Manchester Mayor Andy Burnham to take action against companies in the gig economy that allegedly use "bogus" self-employment practices. The report claims this denies approximately 4 million workers statutory rights such as parental leave, redundancy pay, and protection against unfair dismissal, particularly relevant amid the cost of living crisis.
The report advocates for the government's Fair Work Agency to utilize its civil proceedings powers to prosecute companies suspected of widespread misuse of self-employment classifications. It also calls for reforms to employment law to address this issue, noting that Britain's three-tiered employment status system (employee, worker, self-employed) creates a gap exploited by some firms.
Experts suggest that many gig economy workers, including delivery drivers and hairdressers, are hired in this intermediate "worker" status to avoid granting them full employee rights. The report proposes shifting the burden of proof for employment status from the individual worker to the employer, which would help workers avoid lengthy legal battles to secure basic entitlements like minimum wage and holiday pay.
Labour had previously promised a single "worker" status but has since scaled back this commitment. The government, however, maintains that its "plan to make work pay" will enhance job security and living standards, with the Fair Work Agency already assisting workers. A spokesperson confirmed a commitment to consult on employment status and explore the agency's civil proceedings powers.