28 June 2018
The NHBF has responded to a government consultation on how to decide who is an employee, who is a worker and who is genuinely self-employed.
Self-employment in the ‘gig economy’
The consultation was prompted by the rapid growth of self-employment in the ‘gig economy’, with companies such as Uber, Deliveroo, Hermes and Pimlico Plumbers firmly in the political spotlight. These companies claim the people working for them are self-employed while the individuals working for them see themselves as workers or even employees, and therefore entitled to a range of benefits and entitlements such as holiday pay and National Minimum Wage / National Living Wage.
Rising trend towards self-employment
NHBF research shows there is a rising trend towards self-employment, with 57% of hair stylists and barbers now self-employed and 54% of beauty therapists. Many of the 400 salons who responded to the NHBF survey in April commented on what they see as unfair competition between salons who bear the additional costs of employing their staff and those with self-employed workers. Well over two thirds (69%) felt that current employment definitions are too loose and are calling for clear rules that small businesses can easily understand.
‘Control’ is a key concept when it comes to employment status. Freelance ‘mobile’ hairdressers, barbers or beauty therapists who visit clients in their homes or who work from home are not normally working under anyone else’s control. But is that really true for salons and barbershops? Does the business owner actually control the self-employed people who work within their business, regardless of any agreements which may exist between them?
The consultation put forward other criteria which could potentially be used to decide whether someone is an employee, a worker or self-employed:
- How much financial risk is taken by the individual?
- Is the individual ‘part and parcel’ or ‘an integral part’ of the business?
- Who provides equipment and other facilities?
- What is the reality of the relationship between the business owner and the people working for them?
- How long has the individual worked in a single business in the same role, in other words at what point do they become an employee rather than self-employed or a worker?
- Do they always work on the same business premises?
- Does all their Income come from only one source?
- Do they benefit from collective branding / marketing carried out by the business owners?
- Is any supervision or training included within the role?
Hilary Hall, NHBF chief executive, says:
“The government will now consider all responses and then decide on which measures they want to adopt, although there will be no changes until legislation is passed. The consequences for the hair and beauty industry could be far-reaching depending on which factors the government decides are true measures of employment status. The NHBF continues to advise salon owners with chair / room renters to have a properly drawn up agreement which sets out exactly how the renting arrangements will work, and to stick to what the agreement says in terms of who is responsible for what.”