Sinead Moore 17 Mar 2017 01:25pm

Gig economy workers call for greater regulation and rights

More than half of gig economy workers (57%) believe that gig economy firms are exploiting a lack of regulation, according to new research by CIPD

The research revealed that 4% of UK working adults aged between 18 and 70 - approximately 1.3 million people - are engaged in gig work in the UK.

Nearly two-thirds of gig workers surveyed (63%) believe the government should regulate to guarantee them basic employment rights and benefits such as holiday pay.

The research highlighted concerns over the level of control exerted over gig workers by the businesses they work for.

Despite being classed as self-employed, just four in ten (38%) gig economy workers say that they feel like their own boss and 57% believe that gig economy firms are exploiting a lack of regulation for immediate growth, further strengthening the question of whether gig workers are entitled to more employment rights.

However, half of the workers surveyed also agree that people in the gig economy choose to sacrifice job security and workers’ benefits in exchange for greater flexibility and independence.

The research also found that, contrary to much of the rhetoric, just 14% of respondents said they did gig work because they could not find alternative employment and only a quarter (25%) of gig economy workers say it is their main job.

The most common reason for taking on gig work among the respondents was to boost income (32%).

However, 60% say they don’t get enough work on a regular basis in the gig economy, and the research shows that income earned from gig work is typically low, with median reported income ranging from £6 to £7.70 per hour.

Peter Cheese, chief executive of the CIPD, said, “This research shows the grey area that exists over people’s employment status in the gig economy.

"It is often assumed that the nature of gig work is well-suited to self-employment and in many cases this is true. However, our research also shows many gig economy workers are permanent employees, students, or even the unemployed who choose to work in the gig economy to boost their overall income.

“Our research suggests that some gig economy businesses may be seeking to have their cake and eat it by using self-employed contractors to cut costs, while at the same time trying to maintain a level of control over people that is more appropriate for a more traditional employment relationship.

"Many people in the gig economy may already be eligible for basic employment rights, but are confused by the issue of their employment status.”

Respondents were equally likely to agree (36%) as disagree (35%) that "the gig economy should not be regulated and companies should compete to offer workers fair pay and benefits, even if it means less income and job security for people".

Overall, gig economy workers are also about as likely to be satisfied with their work (46%) as other workers in more traditional employment are with their jobs (48%).

Cheese said, “The research shows the challenge that policy-makers face in regulating the gig economy and finding the right balance between providing flexibility for businesses and employment protection for individuals.

“The variety of business models in the gig economy, the different types of working arrangements and the varied circumstances of people engaged in providing services in different ways means finding the right response to prevent abuses is difficult, without penalising those who are benefitting.”

In light of the growing challenges that technology and new business models are creating for the UK’s employment rights framework, CIPD believes there is a strong case for government to proactively support organisations in improving their working practices.

The CIPD’s research is intended to inform the government-commissioned review of modern working practices led by Matthew Taylor.

Cheese welcomed the Taylor Review but called for greater clarity on employment rights and improved surveillance of working practices.

The report highlights a number of recommendations for government.

“We are pleased that the government has commissioned Matthew Taylor to lead a review of modern employment practices and look forward to working with his team,” Cheese said, adding, “the government also needs to take a number of steps to help clarify people’s employment rights and enforce existing legislation better, such as supporting a ‘know your rights’ campaign, so more people are aware of what protection they can expect.”

CIPD suggested that the government consult on the demarcation between "employee", "worker" and "self-employed" and how they map on to employment rights, tax and benefits.

As well as recommending the government run a high-profile "know-your-rights" campaign with organisations such as CIPD, Acas, Citizens Advice Bureau and others the professional body also called for sufficient resources to be given to the Gangmasters and Labour Abuse Authority (GLAA) to monitor and enforce compliance.

“It is crucial that the Gangmasters and Labour Abuse Authority is given sufficient resources to monitor and enforce compliance with existing employment rights,” Cheese said.

“There is also a case to strengthen the role of Acas to allow it to proactively work with business to improve their working practices if they are in danger of falling foul of the law through a lack of resources or ignorance,” he added.

Cheese added that we need “better guidance for employers on atypical working, setting out the key principles of good work and responsible employment and the HR and people management practices that underpins this.”

CIPD called for increased public investment in lifelong learning to reverse the recent decline in investment in adult skills and suggested that the government should develop an effective all-age careers service.

Chancellor Philip Hammond announced in the Spring Budget that the government will consult on the problems facing self-employed workers over the summer and wait for the findings of the Taylor review before making any sweeping changes.

This week Hammond U-turned on his decision to increase NICs for the self-employed, following widespread criticism.

“It is crucial that the government deals with the issue of employment status before attempting to make sweeping changes, else they risk building foundational changes on shifting sands,” Cheese said.

“We welcome the chancellor’s decision to wait for the Taylor Review before looking at making any changes in tax levels.

"We would like to see a full consultation on the complex issue of employment status, which explores whether it is possible to have greater clarity and consistency on this issue across employment, tax and benefits.”