From the TUC

Autumn Statement – a first step against bogus self-employment

05 Dec 2013, by in Labour market

The Autumn Statement promised to act against companies that “use employment intermediaries to disguise employment as self-employment and thus avoid employment taxes and deny employment rights to their workforce.” This is, of course, a polite way of describing bogus self-employment, so the announcement is welcome.

However, what is intended is quite a modest step, as it is  “estimated to save £400M”. On the plus side it will happen quickly – from April 2014 as part of finance bill.  The Government has recently concluded a consultation on the use of this practice in the North Sea oil and gas industry, so it seems most likely that this will be where the main focus of the initiative will lie. 

Taking a first step on cracking down on bogus self-employment deserves a toast – in 80 shilling ale, at least.  

If the government were to go further and crack down on all bogus self-employment then we should all gleefully upgrade that toast to champagne.

Unfortunately the use of bogus self-employment is still much to common in some sectors like construction and transport, where trade unions continue to fight a long-running campaign against this unfair practice.

The next step should be for the government to clamp down on the abuse of travel and subsistence schemes by employment agencies, as far too many seek to avoid paying the National Minimum Wage, income tax and NICs, and this is a serious problem.

4 Responses to Autumn Statement – a first step against bogus self-employment

  1. El Bow
    Dec 7th 2013, 9:08 am

    I’ve got experience of this type of *self* employment within the transport industry…one well known high street (retail park) giant is renowned for this practice. Totally bogus, totally exploitative and leaves you totally exposed to whims of local management. As I found to my cost.

    The whole point of being self employed is to be free to work where and when you choose yet I was tide into an *exclusive* contract, to make a crew and vehicle available 7 days a week but had no guarantee of getting any work…:/

  2. El Bow
    Dec 7th 2013, 9:09 am

    *tied

  3. 3Lllama
    Dec 10th 2013, 5:24 pm

    The intention is good here but I’m concerned that any such crackdown would have the same effect it has in the Netherlands recently, where the main result so far has been to suddenly deprive bona fide freelancers of custom as companies become reluctant to risk being penalized if the working relationship doesn’t fit a (very narrow) definition of self-employment. Consequently, any such attempt to decasualise the labour market by law or regulation could end up hurting the people it is meant to help. It ought to be remembered that for many people the reason they are not in full-time employment is that their circumstances do not permit this.

  4. Paul Sellers

    Paul Sellers
    Dec 10th 2013, 5:45 pm

    There can be no doubt that a crackdown is needed but, of course, any change must be done with proper care.

    Trade unions have about a quarter of a million self-employed members, so we will be able to get some insight into what will work.

    One thing that we do know is that far too many employers try to shoe-horn workers into a bogus self-employment relationship.

    Their motive in doing so is to avoid paying NICs and the minimum statutory leave entitlement of 5.6 weeks per year, and to avoid accruing redundancy liabilities.

    This is a case where strong rules are needed to prevent cheating, otherwise the good employer will be undercut by the bad and the bad by the worst.