This year, of course, there’s no Spring Budget, just a “Statement” for which a grand total of fifteen minutes have been allotted. But that doesn’t mean the self-employed have entirely been left alone. The Government’s response to the Taylor review and its accompanying four consultations attempt, amongst many other things, to tackle the thorny issue of employment status in the gig economy given its prominence in media coverage and some high-profile Tribunal cases working their way through the system. The issue is whether people tasked to deliver passengers, parcels or pilau rice from A to B are really self-employed or workers. My guess is that the intricacies of answering these questions isn’t something of huge concern to many CIPD members.
However, our latest Megatrends report on self-employment in the UK does provide some reasons why practitioners, as well as those making, or seeking to influence, government policy need to think about the self-employed, perhaps more so than in the past.
Politicians above all will take note of them being a large and growing group of people – the number of self-employed jobs has doubled since 1981. Politicians of an older stripe and some of the Red Tops might still think they know – and can speak to – their political, economic and social values but, across the world, it’s a more complicated picture.
But while every self-employed person isn’t the stereotypical White Van Man – for one thing, an increasing share are women – most self-employed people are trying to make a living in jobs where self-employment has been common for a long time such as plumbing, plastering, hairdressing, window cleaning, accountancy and the law.
The “typical” self-employed person, though, is as likely to have white hair as drive a white van. The self-employed have probably always been older, on average, than employees, either people cashing in their experience or people booted out of companies and using that experience to earn a crust. What’s changed is that the self-employed seem unable or unwilling to stop being self-employed. To see how that can be a problem for them, their families and their customers, just watch a few episodes of The Hotel Inspector.
The self-employed work longer hours than employees for lower average earnings – yet they are more satisfied with their jobs and few of them would give up self-employed status. That’s because they get a feeling of autonomy from being self-employed – being in charge of their destiny, being able to work when they choose, not having to take orders – whether real or illusory.
That creates issues for those CIPD members working in organisations large or small, public or private sector. If the self-employed in general see themselves getting a good deal from life, it seems natural for them to pay for it through lower earnings (and prices or fees for customers). But when does the search for a better deal turn into exploitation? Taking advantage of suppliers – especially one-person bands – isn’t a good look.
An extra complication is that these relations may not even be handled by the people management function; they may be the domain of finance, procurement or general management.
One area where members might expect to be involved is the use of self-employed labour – freelances, sub-contractors and the like – in the design of contracts and terms and conditions, if not in selection. Two lessons stand out. One is that there are risks in trying to be too clever in designing jobs to get around employment rights. A case could go to a Tribunal and they are tasked with looking beyond the paperwork to the reality of the employment relationship. The second is that HMRC decisions on tax and National Insurance treatment have a more powerful and immediate impact on behaviour than anything done by the Government to employment law.
And what about current employees being enterprising, a.k.a. moonlighting? The potential has always been present but technology makes it ever easier to have a sideline, whether ferrying passengers or baking cupcakes. Aside from use of corporate resources, IP and conflicts of interest, what about an employer’s duty of care and what if the employees’ choice of business compromises the reputation of their employer? Increasingly, employers are looking for more than their employees’ time; they are also looking for engagement and attention. But how can someone be the servant of two masters?
Tried-and-tested clauses in contracts of employment may no longer cut the mustard. But it’s not all bad news. Employees selling their skills – which the employer may have helped pay for – sounds (and may be) underhand. But employers also benefit from the skills their employees (hopefully) develop in running their business, such as selling.
