In light of the discussion between Rebecca Long-Bailey, Shadow Business Secretary and Uber, on the back of a major report on workers’ rights in the ‘Gig economy’ heard on Radio 4 our Wednesday blog this week is focussing on flexible employment.
The ‘gig economy’ is an increasingly used phrase used to describe the sector of the labour market characterised by the prevalence of short term contracts or freelance work. You may be familiar with the term due to companies like Uber and Deliveroo exclusively hiring people on this basis rather than with a formal contract. Around 5 million people are employed like this in the UK, many of whom favour this form of work due to the flexibility of hours. However, some argue against this and believe it can be manipulated to exploit worker’s rights.
‘Zero-hour’ contracts; and the ‘Gig Economy’ format for employment are different. Although both are legitimate forms of employment and both don’t guaranteed hours or job security from their employers, the ‘zero-hour contract’ allows holiday pay but does not allow sick pay; however, the ‘gig economy’ does not allow holiday pay or sick pay.
The explosion of the number of people in flexible employment costs the government £4bn in lost tax revenue. This is due to loss of earnings compared to full time work of a similar nature and therefore decreases the tax owed by the individual. In addition, workers in the ‘gig economy’, earning less than their fully employed counterparts are entitled to various benefits, costing the government more in welfare spending.
Calls have been made for the recently assembled government to address these issues surrounding flexible working and there is certainly more news to follow!