Inquiry into workers rights in “gig economy” launched

28 Oct 2016

The Business, Energy and Industrial Strategy Select Committee has announced the launch of a new inquiry into the future of work in the UK, amid concerns over low pay and financial insecurity.

The future world of work and rights of workers inquiry will investigate changing trends in the jobs market, focusing on the rights of self-employed and agency workers and the growth of the so-called “gig economy”.

The inquiry follows the committee’s earlier investigation into working practices at Sports Direct, when founder and majority owner Mike Ashley was accused of running the company like “a Victorian workhouse” and treating workers “as commodities rather than as human beings”.

Iain Wright, Chair of the Business, Energy and Industrial Strategy Committee said:

“In our Sports Direct inquiry we exposed shocking examples of poor working practices, of agency workers paid less than the minimum wage and exploited through dubious voluntary schemes, such as pre-paid debit cards and deductions from pay for insurance services.

In recent months we’ve seen growing evidence of agency workers and those working in the ‘gig economy’ being exposed to poor working conditions. This growing trend raises questions over employment status and lack of worker rights”.

The latest figures from the ONS show that the number of self-employed people is at a record high, standing at 4.79 million. Comparing the figures for June-August with the same period last year, the ONS reports an increase of 273,000 in the number of self-employed people, in contrast with an increase of 296,000 in the number of employees, despite the fact the self-employed make up only 15% of the workforce.

This has led to fears that the growth in employment is being driven by an increase in the number of people working in precarious positions, where they can struggle to earn a living wage. The food delivery service Deliveroo, which uses couriers on self-employed contracts, was forced to back down from a pay dispute in August, after trying introduce a new payment scheme that striking couriers said could cause them to earn less than the minimum wage. Sports Direct was fined £2m after it was found to have been effectively paying thousands of agency workers less than the minimum wage.

The inquiry will debate on the need for protections for workers in the “gig economy” and on the rights of the self-employed, with the aim of improving the security of workers, with implications for their financial health.

Iain Wright said, “the nature of work is undoubtedly changing. It will change further with growing use of technology and a spreading of automation across the economy. This might provide flexibility and choice for some people, but unleash insecurity and squeezed working conditions for others”.

The committee is calling for the submission of written evidence from interested parties by 19 December.