HR · 20 July 2016

Self-employment has its downsides, but pretending it doesn’t exist isn’t the answer

GMB Uber
The GMB union is taking on tech giant Uber because workers are self-employed

Just days after a comprehensive study by the Office for National Statistics (ONS) found that the vast majority of the UK’s 4.7m freelance workers are happily self-employed, a trade union is taking on tech giant Uber for working with them – using arguments which aren’t just flawed but are damaging to members.

Announcing the tribunals his union is planning to fight the tech giant, Justin Bowden, GMB national secretary, described as “growing and pernicious” a perceived trend that employers are forcing drivers to identify as self-employed when in fact they are employees.

The union’s criticisms include complaints that some drivers earn less than minimum wage when the cost of doing business is taken into account, and that they aren’t entitled to holiday pay – without any acknowledgement that these are inherent risks of self-employment, usually outweighed for many by the possibility of high earnings in good weeks and days off without having to give anyone advanced warning.

Of course, this isn’t the case for everyone who is self-employed. The same ONS research that painted a broadly positive picture of increases in this form of work also identified younger, male workers as the only category of freelancers significantly likely to be dissatisfied with self-employment – exactly the demographic which research carried out by Uber suggests make up the bulk of drivers.

And as the number of drivers competing for work increases and new pricing options like UberPool reduce revenues, it’s no surprise that many of those who use the app to get customers are unhappy. But while the GMB are right to point to recent cuts to fares as having a negative impact on drivers’ profits, if union reps really want to help drivers they should help them negotiate to charge customers more or get a bigger chunk of the fare – actions which would deliver those who drive for Uber financial benefits without denying them the freedom they currently enjoy as freelancers.

The action is also an unusual example of a trade union taking a similar same policy approach as a Conservative government – albeit for a different reason. Since former chancellor George Osborne pledged in his 2013 Autumn Statement to crackdown on those “disguising employment as false self-employment”, HMRC has targeted contractors in industries from construction to IT to try and force freelancers to pay National Insurance.

It highlights how self-employment is being misunderstood by both sides of the political spectrum – victimised by the left and stigmatised by the right. And the implications of such attitudes are not limited to the self-employed themselves. They suggest that if a small business owner would prefer to negotiate with a flexible workforce on mutually convenient terms, they are either exploitative monsters or attempting to defraud the taxpayer.

Both sides’ actions are in keeping with arguments set out by economist Guy Standing, a professor of development studies at the School of Oriental and African Studies, University of London, in his 2011 book The Precariat: The New Dangerous Class. In it, the academic focused on the fact that freelancers and contractors do not benefit from many of the benefits which organised labour movements won for their members in the 21st century – while highlighting the fact that many of those working in such a way do so out of choice rather than coercion.

“Many in the precariat do not even aspire to secure labour,” Standing explained in follow-up book The Precariat Charter. “They saw their parents trapped in long-term jobs, too frightened to leave, partly because they would have lost modest service benefits.”

Instead, he has argued that the institutions needed to represent such workers will eventually emerge. The existence of organisations like the Association of Independent Professionals and the Self-Employed (IPSE), which offers members insurance for when customers don’t pay up and the business cost of being called for jury service seems to provide a model for how this can be a reality.

For now, however, self-employed workers are neither losers or tax dodgers – they just want more control over their hours and conditions, and, like many other workers, often have to negotiate hard to combine this with a decent income. The government and unions should stop trying to deny their existence and start helping them achieve this.

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ABOUT THE EXPERT

Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics – as well as running a tutoring company.

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