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Does there need to be a statutory definition of self-employment?

Discussion in 'General Business Forum' started by ChrisGoodfellow, Mar 24, 2017.

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  1. ChrisGoodfellow

    ChrisGoodfellow UKBF Regular Full Member - Verified Business

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    Thought it was interesting that IPSE, an advocacy body for the freelancers and contractors, has called for a legislative definition of what classifies a worker as self-employed. They want to it to take in four points:
    • Having autonomy in their work. For freelancers this means the ability to send substitutes and for there to be no requirement to do work outside what is agreed
    • Having control over working arrangements. Self-employed people are able to decide how to complete their tasks and the hours and location they choose to work in
    • Taking on business risk. Self-employed take responsibility for their finance and tax responsibilities and can be paid on a per task basis
    • Level of independence from clients. This would include things such as having to wear a uniform or using your own tools and equipment to complete your work.
    What do you think?

    To me, it looks like it would help employers too. And, it could address some of the issues around the gig economy that have started to cause issues over the last year or two.
    Posted: Mar 24, 2017 By: ChrisGoodfellow Member since: Jul 10, 2014
  2. STDFR33

    STDFR33 UKBF Big Shot Free Member

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    The employment status is clear in most cases.

    Where the decision isn't quite clear cut, there's a lot of case law to go on.

    If the definition was set in legislation, we still get people asking on this forum saying "I'm going to be employing some self employed [insert job title here]".

    Those that don't want to comply with NMW, holidays, maternity, PAYE etc will ignore the legislation, just as much as they ignore the guidance and case law.
    Posted: Mar 24, 2017 By: STDFR33 Member since: Aug 7, 2016
  3. ChrisGoodfellow

    ChrisGoodfellow UKBF Regular Full Member - Verified Business

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    @The Accountancy Lab Interesting. What about the cases with Deliveroo and Uber, where it's been suggested people are being pushed into self-employment?
    Posted: Mar 24, 2017 By: ChrisGoodfellow Member since: Jul 10, 2014
  4. Ally Maxwell

    Ally Maxwell UKBF Regular Free Member

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    I think you'll find IPSE don't have the backing of the IT contractor community which they claim to be supporting.

    Several governments have tried this and it ALWAYS turns into a tax grab on contractors rather than the protection of vulnerable low paid workers, which is where the focus should be.

    To the poster above who claimed the case law is clear, nothing could be further from the truth. Try reading up on cases for the last 15v years and you'll see what I mean.
    Posted: Mar 24, 2017 By: Ally Maxwell Member since: Nov 6, 2015
  5. STDFR33

    STDFR33 UKBF Big Shot Free Member

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    I never said the case law is clear.

    I said where it isn't clear, there is case law to go on. Sometimes it's useful, sometimes it isn't - that's the nature of case law.
    Posted: Mar 24, 2017 By: STDFR33 Member since: Aug 7, 2016
  6. Employment Law Clinic

    Employment Law Clinic UKBF Big Shot Full Member - Verified Business

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    It’s fair to say there’s a lot of case law in the area/definition of a worker, but I don’t think it necessarily helps – it certainly hasn’t been entirely persuasive in the recent gig-economy cases.

    The basic tests are obvious, and in response to many posts on here, when someone asks for advice about “I’m hiring a member of staff as a self-employed worker”, we simply throw-out a few obvious questions that could determine the test. But in practice the test is never that simple (apart from most of those cases on here, where the employer simply wants to avoid liabilities, wants to use a different label to the relationship & hopes that’s enough not to be an employer), and recent high-profile cases only support this fact.

    Personally, I think the agenda is being driven by a main-stream media that has the bit between its teeth, and like with zero-hours contracts, thinks that working as a worker, or instead as self-employed, is a bad deal; neither the practicalities, nor legalities, come into it.

    Three recent high-profile cases come to my mind, all with complications:

    Uber – a favoured carriage firm for many, but the drivers are manipulated, as they only get paid when they’re driving customers. Some say this is total exploitation of these drivers, Uber the new Public Enemy #1 now that Amazon & then Sports Direct have been exposed for asking their staff to work hard, be efficient.

    The employment tribunal found the drivers were workers, giving them the basic rights of minimum wage, holidays, etc. And they’re deemed to be working from the time they sign-on – log into their app – until the finish; they can wait an hour or more for a job, but must still earn the NMW, etc. for this time. But when a customer asks for a car, they can decline the job! I can’t square that circle, and I can’t see how these drivers are workers, and certainly not for all the hours they log on.

    Sure, like the taxi drivers that used to slouch on the sofas in the small cabins on every high street cab-office before we discovered Uber, the drivers aren’t ferrying customers around for every working minute. But they have that time to do something else. In London, they’re going to be expected to pass some exams, so they could revise for that. Damn, I could driver for Uber, and advise ELC clients between driving jobs given they get paid c.£5 for a 10-minute drive & an hours waiting time, but earning & claiming holiday pay from Uber while I did that!

    Judgment is currently against Uber, but I can’t see it standing – although I believe the legal community is divided. (Perhaps the division is based on moral beliefs, rather than the law, I don’t know.)

    Pimlico Plumbers – this was a case that on first impressions did look more sound: plumbers that have to wear a uniform, drive the company van (hired to them I believe), follow company procedures, the level of command lends itself to conclude the plumbers are workers – as the tribunal found them to be.

    But these plumbers can effectively sub-contract – they can get someone in to help them. I don’t know how the jobs are assigned, but say they get a job that’s assigned as 8 hours, but they get Joe to help, so the job is only 4 hours (times two), Pimlico Plumber has still earned 8 hours of holiday time – unless the business knows when it’s used, or stops all assistance, it would appear impossible to assess what any true NMW, holidays, etc. are due.

    Or what if the plumber gets a job assigned at £50ph, but gets two friends to work it (with the Pimlico Plumber in attendance), and pays each friend £30 an hour. Eight hours is over in four, but they were only there to show the brand.

    This is a case that Charlie Mullins indicates he’ll appeal all the way, and while I think it’s a lot weaker than Uber’s, I think has grounds for appeal.

    Excel - only this week, a lot less publicised case, a cyclist won the status of a worker. I haven’t seen a lot of material on this case (if the judgment is online, I haven’t found it yet – any links would be welcome), so it’s much more difficult to comment on the merits or otherwise, but the claim for was such a small amount (~£300) the firm didn’t attend the hearing.

    The judgment is not binding, so the failure to defend it cannot be an indication the company has conceded the point, perhaps biding their time while the other (above) appeals are decided.

    I don’t think the status of being a worker is clear-cut, either in law, or in case law. It’s an additional term (between self-employed & employee) that crept into UK employment law via the EU for reasons I can’t remember at all anymore, but it’s never had such a clear definition – only the rights granted to someone with this status are clearly defined.

    As with any new laws (if this does happen, or is even recommended by the current Matthew Taylor review), it will need to be subjected to its own time in the tribunals to determine application, develop the case law. I can’t see how that will help, unless there are very clear definitions of what a worker is, separate to an employee, and when they’re deemed to be working – a whole new set of case law waiting to be defined.

    I don’t know if the current calls will help, but suspect rather hinder: the questions are simply not easy to answer, and that’s why there is so much case law – the legislation realistically can’t be as prescriptive as leaving a judge to apply its meaning. In an evolving working environment, the law can keep up, but only if it’s left to judges in tribunals to apply the law as it stands (with the necessary appeals to correct the odd judgments). Either way, I won’t be looking to drive for Uber, I’ll be kept busy enough.

    Karl Limpert
    Posted: Mar 25, 2017 By: Employment Law Clinic Member since: Aug 10, 2009
  7. BustersDogs

    BustersDogs UKBF Ace Free Member

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    " But when a customer asks for a car, they can decline the job!" Just want to comment that I think this is a legal right of cab drivers, and not related to employment law.
    Posted: Mar 26, 2017 By: BustersDogs Member since: Jun 7, 2011
  8. Employment Law Clinic

    Employment Law Clinic UKBF Big Shot Full Member - Verified Business

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    I don't doubt you're correct Linda, but regardless of the law that applies, it can't be reasonable to say I can sit around for an hour, wait for a job offer but then decline it for no reason, but I still expect to be paid for the time I was waiting for that job. What happens if I went home, but forgot (or simply didn't bother) to sign out? The judgment in the Uber case, as it currently stands, says that is reasonable - as long as a driver is signed-in to their app, they're deemed to be working, entitled to NMW, etc. I think that's quite perverse - along with other conclusions in the judgment.

    The whole thing has long way to go, but the examples make clear it's definitely not a black & white issue. There are plenty of straightforward cases seen on here, but the gig economy is (rightly to my mind - whether moral or not, we're only considering what the law currently allows) testing the law.

    Karl Limpert
    Posted: Mar 26, 2017 By: Employment Law Clinic Member since: Aug 10, 2009
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