18 December 2018

The government has announced its Good Work plan in response to the Taylor Review which was published in July 2017. The Review looked at how workers’ rights were affected by new forms of work, especially the rise of the ‘gig’ economy. Companies such as Uber, Deliveroo and Pimlico Plumbers have high-profile cases going through the courts to decide whether the people who work for them are genuinely self-employed or whether they are workers or even employees.

Employment status matters because employees are entitled to a much wider range of rights than workers, while self-employed people have no rights at all. Businesses can make financial savings on employment-related costs, such as sick pay and pensions, by having self-employed people working for them. This has led to an increasing number of disagreements around the employment status of individuals and the rights they are entitled to, which is why so many court cases are being heard on this issue.

The government has announced that it will develop new legislation to provide greater clarity and certainty on employment status, stating: “Businesses should not be able to avoid their responsibilities by trying to misclassify their staff.”

Our 2018 industry statistics show that 61% of people working in beauty and 48% in hairdressing and barbering are self-employed

 Hilary Hall, NHBF chief executive said, “Our 2018 industry statistics show that 61% of people working in beauty and 48% in hairdressing and barbering are self-employed. Yet self-employment is not currently defined in law. Well over two thirds of our Members (69%) feel that current employment definitions are too loose and are calling for clear rules that small businesses can easily understand.”

She added, “The court cases show that self-employment can be used as a way of reducing costs for the business, while denying employment or worker’s rights to the people who work in them. However, as no date has been set for when new legislation will be drafted, questions on employment status will continue to be battled out in court.”

 Other measures announced by the government in its Good Work Plan include:

  • New legislation to prevent employers making deductions from tips.
  • Greater alignment between employment status for the purposes of employment rights and tax.
  • If employees’ hours vary from week to week, holiday pay is calculated on the average pay the employee earned in the last 12 weeks. New legislation will extend this period to 52 weeks.

To download the NHBF’s industry statistics go here.