Manchester Mayor urged to crack down on bogus self-employment in gig economy

Andy Burnham is being asked by campaigners to take action against companies exploiting widespread bogus self-employment practices. These firms allegedly deny rights to approximately four million workers across the United Kingdom, including those employed through delivery platforms and other gig economy arrangements. The call for intervention comes as political leaders outline their agendas following recent elections.

A joint report published this week by the Fabian Society and the Joseph Rowntree Foundation highlights that millions of individuals are missing out on essential statutory protections. Key rights currently being denied include parental leave, redundancy pay, and safeguards against unfair dismissal. The authors argue these changes are vital to ensure work pays adequately during an ongoing cost of living crisis.

The report specifically directs attention to the government’s newly established Fair Work Agency. Launched in April as a powerful watchdog for workers’ rights, this body is urged to utilise its civil proceedings powers aggressively. Officials should prosecute firms suspected of engaging in bogus self-employment rather than allowing them to operate without consequence. Ministers are also encouraged to advance legislative changes that address the long-standing misuse of current employment classifications.

The United Kingdom’s system remains unusual among leading economies for maintaining three distinct categories of work status. Full employees possess the most rights and responsibilities, while genuinely self-employed individuals have limited protections but fewer obligations. An intermediate category exists between these two extremes, known as worker or limb b status, which offers fewer rights than full employment.

Experts suggest that up to four million people currently operate within this regulatory gap. This group includes hairdressers, personal trainers and drivers for gig platforms who are often hired specifically to avoid granting them standard employment rights. Although the Labour party previously promised a single worker status for all but genuinely self-employed individuals, they retreated from this plan before the 2024 general election.

Once in power, the policy did not feature prominently in recent shake-ups of employment law. While consultation was promised regarding moving towards a unified status, no such materialisation has occurred yet. The party now faces intense lobbying from business sectors over its proposed Employment Rights Act. This legislation includes bans on exploitative zero-hours contracts and grants day-one rights to statutory sick pay.

Recent official government analysis indicates that planned changes would support economic growth while offering greater protections for workers, though businesses may face costs estimated between 350 million pounds and 2.9 billion pounds. In his first week in office, Burnham spoke with business leaders confirming determination to proceed with the biggest shake-up of employment rights seen in a generation.

However, campaigners argue that specific changes addressing employment status are required so gig economy workers benefit from upgraded protections. The report proposes shifting the burden of proof regarding whether someone is an employee or self-employed onto the employer rather than the worker. This measure would help individuals avoid lengthy legal battles to secure basic rights such as minimum wage and holiday pay.

Luke Raikes, deputy general secretary of the Fabian Society, stated that those playing fast and loose with employment law must not undercut good employers who follow rules. He argued that if work looks like employment, it should be treated as such by default, with enforcement action expected for non-compliance. Insecure workers should not need to fight company lawyers up to the supreme court just to establish basic rights they are owed.

A government spokesperson responded that plans to make work pay will boost secure employment and improve job security. The Fair Work Agency is already assisting workers in obtaining entitled rights, with commitments made to consult on employment status while considering how civil proceedings powers can be used alongside other measures.