TaxJul 27 2021

Labour's single 'worker' status could 'undermine' self-employed

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Labour's single 'worker' status could 'undermine' self-employed

Labour wants to give all workers security in employment by creating a single status of ‘worker’ for all but the genuinely self-employed, but not everyone is convinced by the proposal.

In an announcement yesterday (July 26), the party said once in power it wants to end “insecure employment”, give all workers rights such as access to statutory sick pay, national minimum wage, holiday pay and paid parental leave, as well as protection against unfair dismissal.

A single status of ‘worker’ would replace the three existing employment categories of employee, worker and dependent contractor and remove qualifying periods for basic rights and protections to give workers day one rights in the job.

Alongside the party’s commitment to extend statutory sick pay for the self-employed, this would make 6.1m additional working people eligible to claim statutory sick pay.

Andy McDonald MP, Labour’s shadow employment rights and protections secretary, said: “Millions of workers are in insecure employment with low pay and few rights and protections, particularly key workers whose efforts got the country through the pandemic.

“A lack of basic rights and protections forces working people into poverty and insecurity. This is terrible for working people, damaging for the economy, and as we have seen throughout the pandemic, devastating for public health.

“We need a new deal for working people. Labour would ensure that all work balances the flexibility workers want with the security they deserve.”

However, the Association of Independent Professionals and the Self-Employed (IPSE) said the proposals “fail to grasp the nettle of employment status”.

IPSE warned without clearly defining what distinguishes “false” from “genuine” self-employment, the proposals risked “seriously undermining” the 4.2m-strong self-employed sector.

Instead of attempting to roll all statuses into one, IPSE has previously proposed writing a statutory definition of self-employment into law – to grant much-needed rights to 'falsely' self-employed people while also protecting the freedom of the genuinely self-employed.

Andy Chamberlain, director of policy at IPSE, said: “While it is absolutely right to try and clear the confusion in parts of the labour market such as the gig economy and secure rights for falsely self-employed people, it is essential to engage with the question of what exactly makes someone self-employed.

"Without this, structural change could threaten the freedom, flexibility and livelihoods of genuine freelancers.

“Instead of attempting to roll all employment statuses into one, we propose clarifying the existing statuses. Because right now, while there are statutory definitions of employee and worker status, there is still no legal definition of self-employed status."

Chamberlain added: “We are pleased Labour is grappling with these issues, but we do not believe this solution cuts to the heart of the matter.