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Labour promises work rights for gig economy workers

DEPUTY LEADER of the UK Labour Party, Angela Rayner at the end of July announced that a future Labour government would create a new definition of "worker" in law to make sure everyone in employment gets the same protections.

This would rights such as sick pay, holiday, parental leave and the minimum wage from "day one" - from the day they start work.

Some six million people are estimated to be affected. They are in general precarious workers and specifically: agency workers; people engaged through "umbrella companies"; those doing regular shifts who are on the Pay As You Earn (PAYE) scheme but not classed as employees; and "gig economy" workers who are self-employed in name only - the "bogus self-employed". They may also be "Limb B" workers: broadly, those whose contract says they are not an employee but who are deemed to have rights because of its other terms.

Rayner announced that the genuinely self-employed would "retain their status". So she proposes no extra rights for pure freelances.

Some freelances who do regular shifts for a client with deductions made from their payments at source through PAYE may benefit. Some of these are already considered "workers" in employment law and enjoy some protections. They do not currently, for example, get sick pay, which is currently for employees only. These "regular casuals" on PAYE may already be eligible for holiday pay – see here in the Freelance Fees Guide.

The usual grief of freelances having to accept temporary work that comes with PAYE deductions at source but for amounts so piddling that they are not enough to count towards any contributions-based benefits is expected to continue. Having a proportion of your income as PAYE and another proportion in self-employment also adversely affects your eligibility for SEISS payments, as some freelances have already discovered.

Some members of the Labour Party expressed surprise that the current leadership has committed itself to anything even vaguely progressive, or indeed that it has come up with any policies at all. The announcement on workers' rights would appear to reflect Pledge 7 of the 10 pledges on kierstarmer.com, which is to "strengthen workers' rights and trade unions".

  • Labour Peer Lord Hendy has introduced a Bill to do (at least some of this). Our analysis follows.
  • Mike Holderness adds: The problem that we have to watch out for is legal drafters' instinct to divide the whole of the UK into "employees" and "businesses" - omitting freelances entirely. The first risk that comes to mind is that entirely laudable attempts to get businesses to be more transparent and to pay their taxes on time could lead to freelances being required to fill in many more forms much more often.