Flexible workers generally fall under the category of self-employed, but do they? In the absence of a statutory definition, no-one really knows.
The head of Theresa May’s employment review has set out a six-point plan to ensure government policies adapt to modern ways of working. The recommendations, if implemented, could make a significant difference to just under 2 million self-employed workers in the UK.
However, the report falls short of solving the most pressing issue facing the UK’s flexible labour market – clarifying what self-employment is.
Matthew Taylor, chief executive of the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), said the review would put fostering “quality work” at its heart in a bid to make employment and the tax system fairer while encouraging entrepreneurship and flexibility.
Taylor had also suggested his report would recommend a more prominent role for the Low Pay Commission, which advises the government on the National Living Wage and minimum wage.
Flexibility needs to work both ways, Taylor says, and he is absolutely right. British consumers, businesses and the wider UK economy have greatly benefited from the flexibility offered by freelancers, gig economy workers and those on zero-hours contracts.
That flexibility helps businesses to cope with peaks and troughs in demand and enables them to be more innovative. It gives consumers the option to hail a cab at any time day or night, or have whatever they want to eat delivered to wherever they are at any time.
Flexible working also generates a lot of money and attracts foreign investment because international companies see the advantages of setting up a base in the UK that our flexible labour market can bring.
Self-employment should mean being able to decide when and how you work, fitting it around other commitments and responsibilities such as childcare. The number of freelancing mothers has increased by 79% over the last eight years, which is much faster than the growth rate for the self-employed overall. Beyond that, Taylor’s report recognised self-employment as being an empowering and rewarding way of working.
However, instances where individuals are misclassified as self-employed must be resolved. Taylor goes some way towards it – the report calls for clearer legislation on status – but what’s really needed is a statutory definition of self-employment. Currently self-employment is a default category assigned to those who are neither employees nor workers. If we are to have any meaningful understanding of who is genuinely self-employed, we first need to be clear about what self-employment is.