Understanding Key Issues Affecting The Self-employed In 2017


self imployed

According to the Office For National Statistics there has been an increase in self-employment from 3.8 million people in 2008 to 4.6 million people in 2015. Not only has this boosted the UK’s economy but created more opportunity for staff to work flexible hours.

Over the past year there has however, been a huge amount of media coverage targeting the self-employed with discussions of ‘the gig economy’ as well as the Deliveroo Employment Tribunal taking centre stage.

These are some key issues that you as an employer need to be aware of. Employment Law Specialists, Wirehouse offer an insight into the range of issues that could affect you if you use self-employed staff.

Working In ‘The Gig Economy’

By now, most people may have heard of the Gig economy. According to one definition the Gig economy is a, ‘labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs’. In other words, every ‘Gig’ you played or worked would be paid but you are self-employed and therefore free to go about your work as and when you want.

The flexible nature also offers benefits to employers who pay when there is work available, meaning you do not incur any staff costs when there is no demand for work to be done.

This system categorises workers as independent contractors and does not tie them down to a full-time employment contract, meaning they have no protection against unfair dismissal, no rights for redundancy pay, receiving the national wage, holiday pay or even sickness pay.

Workers Taking Action To Fight Their Self-Employment Status

Companies including UBER and Deliveroo have been using the self-employment contract type for their staff to ensure that they are not obliged to treat them as employees. This means that their staff were not guaranteed breaks, the national minimum wage and sick pay.

Recently, there were two tribunal hearings, one for UBER and one for Deliveroo in which the employers were looking to class their staff as independent contractors. In October 2016 UBER drivers won their case, as the tribunal decided they were ‘workers’ rather than genuinely self-employed and so were entitled to all the rights the law provides to workers. However, many cases are still ongoing with companies hoping to class their employees as self-employed independent contractors instead.

If you are self-employed but have hired your own workforce you must remember that depending on whether you employ them on a ‘worker’ or ‘employee’ basis, your staff are employed by you and are entitled (as a minimum) to holiday pay, sick pay, annual leave as well as protection from discrimination laws.

Proposed National Insurance Increase Axed

Earlier this year the Conservative Government looked set to dramatically increase the amount of National Insurance tax paid by the self-employed. However, Chancellor Philip Hammond ditched his plans in a U-turn just a week after the proposed increase, National Insurance Tax was to take centre stage of his first budget.

This decision leaves a £2billion gap in the chancellor’s budget showing just how much of an impact the UK’s self-employed really can have on the economy. It was said that Theresa May ordered for the plans to be dropped because she did not want to break the party’s manifesto pledge.

Although this recent tax increase has been denied it seems that employers are starting to feel uneasy about the financial future of self-employment in the UK. With this is mind it is time that employers made themselves familiar with any Employment Law changes in the future.


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