FEATURE
LEGAL SERVICES
Employment law must work for you
By Nickie Elenor, Managing Director of Your HR Lawyer and Employment Law Solicitor
Are your staff truly self-employed? If they are classified as ‘workers’, you may be facing unexpected additional expense to your business. Many small businesses engage people to work for them
on a self-employed basis because they want the flexibility of support as and when they need it without the ongoing overhead cost or commitment of an employee. It’s a common arrangement. However, research by Citizens Advice has suggested that
as many as 460,000 people could be falsely classified as self-employed in the UK, costing up to £314m a year in lost Income Tax and Employer NI contributions. HMRC is interested in finding those that are not truly self-employed and therefore liable to tax and NI, not to mention penalties and interest. At the end of 2016, you may have seen the reports on
the case against Uber in which the Employment Tribunal ruled that Uber’s drivers were workers and not self- employed sub-contractors. As a consequence, they were entitled to certain minimum rights to holidays, sick pay, rest breaks and the minimum wage. Some drivers were alleged to have been paid the equivalent of £5 per hour while working for Uber. The
current National Living Wage for adults of 25 and over rose from £7.20 per hour, to £7.50 per hour as of 1 April. This ruling was a huge decision, not only for the 4,000
Uber drivers in the UK, but for all workers in the so-called ‘gig economy’, which is estimated to account for 45% of UK jobs created since the 2007-2008 financial crisis. Uber has appealed the decision so we haven’t heard the last of it. The Government has announced a review of modern
working practices. Frank Field, the Chairman of the House of Commons Work and Pensions Select Committee, published a report that claimed that Uber drivers had almost no independence. The report highlighted that Uber dictated drivers’ working patterns once they have logged on, imposed lockouts from its system if drivers turn down too many jobs and increased its commission while cutting the rates that drivers could charge. It has always been important to correctly classify
employment status but it is even more so now. Companies such as Deliveroo and Hermes are also in the firing line and allegedly facing HMRC investigations and collective Employment Tribunal actions by their drivers. Don’t think that you can simply avoid the issue by calling your workers ‘self-employed’ or even having a well-drafted
30 business network April 2017
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