Time for a modern labour code

Employment law must be changed to protect the army of working people toiling away in today’s ‘gig economy’, writes work and pensions select committee chair Frank Field MP

A little over a century ago, Beatrice and Sidney Webb set out the bones of a labour code which would govern working conditions in the British economy.

It was a first attempt at introducing to the labour market a national minimum standard of employment, including a minimum wage, below which no employer would be allowed to operate. One of the motivating forces behind this attempt was the grotesque sweating of the workforce Mrs Webb, in particular, had witnessed in the decades beforehand.

Chief among the evils she documented were levels of earnings that were barely sufficient to sustain existence; hours of labour that were such as to make the lives of the workers periods of almost ceaseless toil; and conditions that were injurious to the health of the workers and dangerous to the public.

Unbelievably, it is the presence of these evils in 2017 that have prompted me to seek a House of Commons debate this week on the working conditions at Uber, one of the standard bearers of what is known as the ‘gig economy’.

The company was found at an employment tribunal last year to have wrongly been classing its drivers as self-employed, i.e. the company had exerted such control over its drivers as one would expect to see between an employer and its employees, or workers, but without actually classing them as employees, or workers. In doing so, it has been depriving them of basic protections including the national living wage, sick pay, and holiday pay.

While some drivers working with Uber would, of course, be content with the income they can earn, or their supplementary income, there are others who are struggling to earn a living under these arrangements.

More than 80 drivers working with Uber have reported to me some of the appalling conditions under which they are asked to work.

Here, in Britain’s ‘gig economy’:

  • Drivers working with Uber are at risk of taking home as little as £2 an hour – less than a third of the national living wage.
  • There are four main reasons for this chronically low pay: very low fares which have been cut in recent years; high rates of commission which vary greatly between newer and older drivers; the costs of renting the right vehicle which meets Uber’s requirements; and the costs of refuelling and maintaining each vehicle.
  • A heavy downward force on drivers’ ability to earn a decent living has been exerted by the rapid increase in the number of new drivers undertaking work with Uber. It was reported to me that increased competition for fares has resulted in drivers staying out on the road for much longer periods of time each day, and for a greater numbers of days each week. They have done so merely to try and maintain their earnings, let alone be fortunate enough to increase their earnings. That an unlimited number of drivers are able to join a market in which there is no wage floor is a recipe for chronic low pay and insecurity.
  • Uber appears to have unloaded almost all of the risks that are inherent within the private hire industry, onto the drivers with whom it works.

 

There is also a disparity between what most of us would call self-employment and the everyday experiences of ‘self-employed’ drivers working with Uber. I lobbied the prime minister, in a first report looking at Hermes’ working practices, to establish the independent review of employment practices in the modern economy. I have since recommended to the review, in a subsequent report on Uber’s working practices, that the law should be turned on its head so as to place the onus on companies to prove their workforce is self-employed, rather than on the workforce to prove it is not.

But a most immediate intervention, which I will be seeking during the Commons debate, is required from the government. My proposal, which has received cross-party backing from the London assembly, is for local transport authorities to be given the tools and encouragement they need to grant private hire licences only to those companies that adhere to minimum employment standards.

Herein lie the bones of a modern labour code to protect the army of working people toiling away in today’s ‘gig economy’.

———————————

Frank Field MP is chair of the work and pensions select committee. Follow his tweets @frankfieldteam

———————————

Photo: Richard Angell

Progressive centre-ground Labour politics does not come for free.

It takes time, commitment and money to build a fight against the forces of conservatism. If you value the work Progress does, please support us by becoming a member, subscriber or donating.

Our work depends on you.

Print Friendly

, , , , , ,

Comments: 1...

  1. On July 4, 2017 at 2:40 pm Maxine responded with... #

    It’s a huge problem and I suppose this is a start but hope Labour goes further.

    I’d like to see the Tribune Group work with forward thinking employers to go back to first principles to restablish: what is employment; what purpose do employment contracts serve and what does a fair contract for a fluctuating resource needs look like?

    I’m concerned about the number of low income people either forced or coerced into self employment without understanding the consequences e.g. Pension rights. However there are other medium to higher paid jobs that may be suitable to self employment but should have a fair self employment contract which includes proportionate notice and benefits such as pensions. .

    Likewise business needs to rethink about what constitutes a ‘job’ in the 21st Century. Every job doesn’t need to be 35 hours and there may be people suited to the flexible markets they operate in if they consider: job sharing, job carving or fairer more secure self employment contracts.

    When Labour was in power the National Employment Panel (NEP) did a lot of thinking about the gaps between employers needs and the employment needs of people struggling in or struggling to enter the job market. NEP stayed ahead by orienting the education, skills, charity and legal sectors to better deliver for jobseekers and employers. I don’t see why this cannot happen in opposition too? If it does happen I’d like to be involved again.

Add your response