Theresa May often brags that the employment rate is at an all-time high. But as those who tune into my broadcasts would know, ‘I got issues.’ How can there be such high employment and yet working people are homeless and using food banks. The Tory’s don’t address the juxtaposition turning a blind eye to economic reality. That is because Tory policy promotes deregulation of the labour market. Irrespective of the breaches of workers’ rights or tax abuse.
And employers also steal from workers by making significant deductions for accommodation and uniforms. And taking the holiday pay due to around 5% of entitled employees.
Nationally the idea of self-employment has pervaded our senses. And the ‘gig economy’ is made to sound incredibly sexy but like the zero hour contract, it is anything but. Employers deliberately classify workers as self-employed. It denies workers minimum wage; holiday and sick entitlements; parental rights; pensions and employment protection.
Employers and savvy individuals arrange ‘off the payroll contracts’. So, they are not genuinely self-employed but it means that they pay less tax and National Insurance. They save more than £4 billion a year. And so, incorporation is viral. For approximately every 16 people in the UK, there is a company. Back in 2000, that figure was one company for every 37 people.
Abuse of self-employment is a widespread problem. Pimlico Plumbers provide regular well-paid work for their self-employed plumbers unlike in the gig economy. But when ‘self-employed’ Gary Smith who worked solely for Pimlico Plumbers for six years suffered a heart attack, Pimlico Pumbers dismissed him. And the courts rightly ruled that he should have the same rights as an employee.
But litigation is lengthy and expensive. Notably, the government has cut Legal Aid. So, few workers can make a legal challenge.
Cheating businesses put those playing by the rules at a competitive disadvantage. And the Treasury is losing more than £4 billion a year. That is money the government could use for public services like the NHS instead it goes to private profit.
But employers know that workers and HMRC are unlikey to challenge their infractions in court. And HMRC impose such negligible fines that employers factor them into running costs.
Citizens mutual obligations build Britain’s welfare; tax paid, public services met. Employer techniques including the sham use of self-employment are undermining it. Charlie Mullins of Pimlico Plumbers thinks that’s okay (video below). I don’t.
Employment and Government
So, it is trade unions and workers who lead the fight against widespread infractions. Like in the case against Uber that ruled drivers were employees. But Uber is down not out as I explain on this link. And we should be disquieted about the proximity of business and politics, e.g., Uber explained on this linked.
It would be a simple matter for the Chancellor to end the abuses; increase fines for breach of employment law to punitive levels. HMRC’s website provides guidance on employment. And it makes the bogus nature of self-employment easy to spot. It is clear that cases like Uber, Pimlico Plumbers, etc. fall foul of it. So, the onus should be put on companies to prove that workers are genuinely self-employed. And if they fail to do so, the employers should grant employee rights.
The reforms will expose the employment figures for the mirage and not miracle that they are. Perhaps that is why HMRC who is responsible for enforcing tax law and minimum wage seem not to be doing so.
But alas Tory’s are the party of business!
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Charlie Mullins, CEO Pimlico Plumbers
“Most people I know that are self-employed want to be.”
Charlie Mullins, Chief Executive of Pimlico Plumbers, defends his company’s use of self-employed workers after losing a landmark employment rights case. pic.twitter.com/j0fq8E5OpS
— Channel 4 News (@Channel4News) June 14, 2018