HR · 17 March 2017

Gig economy workers remain divided over employment regulation

Gig economy workers
CitySprint employs around 3,500 self-employed workers

Britain’s gig economy workers have delivered a split verdict for potentially regulating their employment model, as a new study shines a light on the so-called “flexible economy”.

According to an industry-wide survey by the Chartered Institute of Personnel and Development (CIPD) HR organisation, gig economy workers were equally likely to agree or disagree that regulation should be left in the hands of employers and not government.

Over a third of respondents believed that competition between businesses for gig economy workers would create better working conditions and drive up employment standards.

While 57 per cent agreed that firms had exploited gig economy workers for fast business growth, a definitive outlook was left unclear as half claimed that their employment was an active choice of flexibility over security.

The findings uncovered significant diversity in the make-up of gig economy workers. Just a quarter cited it as their primary job, while just 14 per cent were pushed into flexible employment as a necessary response to unemployment.

Around half of gig economy workers reported satisfaction over pay rates and overall earnings, a figure that compared favourably against those in regular full-time employment, when it dropped to a third.

According to Peter Cheese, chief executive of the CIPD, the research confirmed the “grey area” that remained over the employment status of gig economy workers, with a greater range of interests than previously understood.

“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,” he said in a statement.

In order to square the different interests, Cheese emphasised the “challenge” faced by policy makers in striking a balance between flexibility and protection.

“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,” he added.

The debate on workplace rights for gig economy workers has sparked a national debate in the past year, leading to high profile legal cases against Uber and Pimlico Plumbers. Both cases saw workers win the right to be considered full-time employees.

It also led prime minister Theresa May to commission a review in October 2016 to support the government’s response to modern employment strategies.

The review’s author, RSA chief executive Matthew Taylor, recently told Business Advice that introducing traditional workplace structures for the self-employed could benefit the country as a whole.

He suggested that a framework such as PAYE could be used to provide incentives for self-employed people to save for their pensions, or to build up entitlement in areas such as sickness provision or parental leave.

“There are a lot of win-wins. We could ensure we’re collecting the tax that needs to be collected, that self-employed people are competing on a level playing field by the same rules, but at the same time we can provide a real change in the support we give to self-employed people,” he explained.

Read our interview with Matthew Taylor to find out how the future of self-employment could look in Britain

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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