— Daniel Barnett (@daniel_barnett) July 26, 2021
Keir Starmer outlines this on LabourList – here. The party has been briefing that the aim here is to end insecure employment, to allow all workers to receive rights and protections including Statutory Sick Pay, National Minimum Wage entitlement, holiday pay, paid parental leave, and protection against unfair dismissal from day one.
Some initial thoughts on this:
A lot of this is understandably targeted at the lower end of the labour market – what is talked of as the gig economy (though quite a lot of people who have always worked in the gig economy – gigging – may not share all of the concerns raised here).
It will be interesting to see how far this is the start of a conversation within the labour movement as much as it is with the electorate or the government. So, some unlicensed personal observations here (thinking out loud – my thoughts, not necessarily those of the union as a whole).
Worker or Employee, some of Bectu’s ‘freelance’ members don’t perceive much of a distinction between ‘an employee on a fixed-term contract’ and someone with a ‘worker’ status in terms of employment rights. The employment rights that they have are somewhat unenforceable because the engagers can just let them go, and that precarious status gives employers three big advantages:
- it sometimes saves them a great deal of money on NICs
- it sometimes reduced liabilities related to Employment Rights (and some liabilities are hard to enforce even for employees when they are on short fixed-term contracts)
- it usually gives the engagers a better bargaining hand – “I say jump, you say how high, or I find someone else” – unless there is a tight labour market at which point the boot goes on the other foot.
And our members are sometimes willing to take that deal because….
- there are slightly lower NICs for themselves, and they can treat some of their costs as ‘expenses’ that reduce the taxable profits (a misconception perhaps because some of those costs could be claimed as tax-free expenses from a PAYE employer)
- lower employer Class 1 NICs (a very big factor here – bigger than it is given credit for) mean that they can sometimes ask for a bit more in fees (split the NICs upside)
- freelancers like the flexibility and a lot of people also get some cachet from calling themselves freelance
- they don’t like having a boss (something I think we often underestimate as a value) and they don’t need ‘supervision direction and control’
But all of this is also a bad deal for HMRC. IR35 was all about challenging the ‘bogus self-employment’ that aims to reduce tax payments. And, as a union, we also don’t like it when its main intention is to reduce employment rights – but more importantly, to strengthen the engager’s hand in negotiations.
The bottom line is that the gig economy is a term used to talk about people who have had bogus self-employment of one form or another thrust upon them, in recent years, by complex intermediaries seeking to duck obligations and taxes. Delivery drivers, taxi drivers, plumbers, etc.
The more established freelancers in the creative sectors may have gone through that sort of coercion themselves, years ago, to some extent, but many of them have made their peace with it and learned how to bargain around it effectively. Some of them even work under union agreements!
But there are also a lot more nuances at play here too. There’s more to this issue than is captured in this post…..
Labour pledges same rights for all workers from day one of jobs https://t.co/AMqENG8v4t
— The Guardian (@guardian) July 26, 2021
Some wider context:
Working people deserve an economy that provides equality, fairness, security and opportunity for all.
Labour’s new deal will bring about good quality jobs right across the country, ensuring that all working people have security and dignity.https://t.co/DBzV8GkmjI
— Andy McDonald MP 💙 (@AndyMcDonaldMP) July 26, 2021