Bogus self-employment could soon become a thing of the past after a major ECJ ruling. That is, until workers' rights are torn up post-Brexit.
We’ve all heard the phrase ‘bogus self-employment’. It’s the set-up where workers are told to register as self-employed so companies get out of paying National Insurance, holiday pay, sick leave and other benefits that accrue to full employees.
Much of the time these workers are nothing like ‘self-employees’. They work for one company, they don’t set their own hours, and they face the same expectations and risks that employees do – just without any of the benefits.
When ‘self-employed’ window salesman of 13 years Conley Kind was given the sack, he took them to a tribunal. They found that King should have been classified as a worker.
That decision got taken up to the highest court in Europe – and today it ruled in his favour. They say he was a worker – and now he will be receiving £27,000 in lost holiday pay.
The impact of this can’t be understated. It sets in case law the principle that people like him should indeed be classed as workers, and given their full rights.
Unions across Europe – and in the UK – will now be taking cases to tribunals on this basis. And they are now more likely to win.
Let’s take a few examples. Delivery company Hermes are currently in the midst of a tribunal battle over their ‘self-employed’ drivers. This decision will have bosses there and across the gig economy feeling very nervous indeed.
Unite the Union note that bogus self-employment used to be concentrated in construction. Indeed, it’s still a huge problem. A Freedom of Information request by Unite in July revealed that in 2016/17 at least 1.076 million construction workers were paid via the Construction Industry Scheme (CIS), a stand-alone tax system for construction workers.
“Workers paid via the scheme are normally officially classified as self-employed, although the nature of their engagement means that the vast majority are bogusly self-employed,” the union note. Nearly half the entire construction workforce is now paid via CIS, and use of the contracts have risen by 8% in just a year – at a time when bogus self-employment has been under the spotlight.
The whole thing may now come under challenge.
And for the gig economy as a whole – from Deliveroo cyclists to Uber drivers – this decision suggests change is around the corner.
Dr. Jason Moyer-Lee, General Secretary of the Independent Workers’ Union of Great Britain, which represents many gig economy workers, said the ruling is ‘a game changer’ for the so-called gig economy.
“The law is now recognising the massive unpaid debt of ‘gig economy’ companies to their workers and IWGB members will be coming to collect…
“It’s cases like this one, where the Tories are told that their manoeuvres to protect big business to the detriment of workers are a step too far, that help one understand why they have such an obsessive hatred for the [ECJ].”
Gig economy bosses can only hide from workers’ rights for so long…
That is, until we leave the EU.
Josiah Mortimer is Editor of Left Foot Forward. Follow him on Twitter
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