Companies that use self-employed drivers have welcomed new employment legislation proposals following a Government review, but unions have said they don’t go far enough to “fix a broken system”.
The Taylor Review, published last month, recommends new legislation to clarify the difference between being self-employed and being a worker. It also recommends the term ’worker’ be replaced with the new definition of ‘dependent contractor’.
It could mean companies have to start paying national insurance, as well as guaranteeing the national minimum wage and paying sick and holiday money, to drivers that may have previously been defined as self-employed.
Matthew Taylor, the lead author of the review, said the critical point of difference for companies is control and supervision. If a job involves those elements, Taylor believes that job role would be classed as a worker, rather than self-employed.
The report said: “Employment statuses should be distinct and not open to as much interpretation as currently, nor be so ambiguous that only a court can fully understand the basic principles.
“The law should also ensure that where individuals are under significant control in the way they work, they are not left unprotected as a result of the way their contract is drafted.”
Companies will have to be able to demonstrate that dependent contractors can “easily clear” the minimum wage with their earnings.
The Freight Transport Association (FTA) welcomed the report but said the logistics sector needs employment flexibility to help with peaks and troughs throughout the year and new legislation could jeopardise this.
Uber, currently appealing a London employment tribunal that ruled drivers’ were workers rather than self-employed, welcomed the Taylor Review and greater clarity over different types of employment status.
However, Andrew Byrne, Uber UK head of policy, maintains the main reason drivers use the Uber app is to be their own boss.
He said: “With our app, drivers are totally free to choose if, when and where they drive with no shifts or minimum hours.”
Yodel welcomed the recommendations in the Taylor review. A spokesman said: “We’ll be looking at the revised definition of [dependent contractor] and the benefits they are entitled to.
“We will, of course, make any changes to our remuneration schemes if this is found to impact our self-employed colleagues.”
Yodel offers employed, self-employed and agency work for drivers with approximately 10,000 working for the business in the UK.
“Many of Yodel’s colleagues choose the self-employed model for the flexibility it offers in allowing them to decide the hours of work that suit their lifestyle,” said the spokesman.
“We currently follow all regulations with regard to self-employment and will continue to do so as the new guidance is shared.”
Both the GMB and the Independent Workers’ Union of Great Britain (IWGB) said the Taylor review had not done enough to address the real problem, which they believe is enforcement of the rules that are already in place.
Tim Roache, GMB union general secretary, said the report does not go far enough “to fix a broken system”.
He continued: “We need regulations and proper enforcement. Words on decent work are always welcome, but they’re meaningless without determined action to back them up.”
Meanwhile, Jason Moyers-Lee, IWGB general secretary, said the report contained “little of any substance”.
“The main and major legal error made is to fail to recognise, as was done throughout the consultation, that a ‘worker’ is a sub-category of self-employment,” he said.
He told Fleet News that renaming workers as dependant contractors was “little more than a relabelling exercise with little implication for business”.
He welcomed the report’s suggestion there will be increased enforcement but said there was no detail on how it would happen.
“Given how pervasive the unlawful deprivation of employment rights is in the gig economy, enforcement should have been the review’s primary focus,” he said. “Corporations will continue to use their lawyers to draft contracts which dodge any new employment definitions in new legislation.”
The IWGB wants the Government to set up a new agency to enforce employment law and also wants employment tribunal fees to be abolished to make it easier to challenge employment status.