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MPs demand law shake-up to protect gig economy workers

A Deliveroo rider speeds through London. MPs say such gig economy workers deserve better rights (AFP Photo/Daniel Leal-Olivas)

Workers in the gig economy need far better protection from exploitative employers, two powerful Commons committees have said.

MPs believe firms are exploiting too many loopholes in current employment law that leaves the estimated 1.6 million workers in the gig economy worse off.

Delivery riders and couriers, minicab drivers and others face an “unacceptable burden” of having to prove they are “workers” not self-employed, the influential committees said.

MORE: Blow to gig economy workers after Deliveroo holiday pay ruling

The reports follow two significant rulings concerning Uber and Deliveroo – one which gave fresh impetus to gig workers and the other that was a blow to employment rights.

The work and pensions select committee and the business, energy and industrial strategy (BEIS) committee have prepared draft legislation intended to close the loopholes that allow “irresponsible companies to underpay workers”.

The draft bill would assume “worker by default”, to make firms pay holiday and sick pay.

Uber is currently locked in a battle with the mayor of London to allow it to continue operating in the capital (AFP/NICOLAS MAETERLINCK)

Frank Field, the Labour chairman of the Work and Pensions Committee, said the bill would “end the mass exploitation of ordinary, hard-working people in the gig economy”.

MORE: How companies are exploiting ‘sham’ self-employment to cut their tax bill

He said: “It is time to close the loopholes that allow irresponsible companies to underpay workers, avoid taxes and free ride on our welfare system.”

There are now about 5 million self-employed workers in the UK, but it is the area of the gig economy that has seen an explosion in loose working arrangements.

Aside from the headline acts such as Uber and Deliveroo, other big name companies such as Sports Direct and McDonald’s have staff who work under flexible contract arrangements.

Rachel Reeves, the chair of the business committee, said: “Uber, Deliveroo and others like to bang the drum for the benefits of flexibility for their workforce but currently all the burden of this flexibility is picked up by taxpayers and workers. This must change.”

She added: “We say that companies should pay higher wages when they are asking people to work extra hours or on zero-hours contracts.”

MORE: Uber contracts branded ‘gibberish’ as MPs condemn working practices in gig economy

Deliveroo recently won a case on the self-employed status of its riders before the Central Arbitration Committee.

It said that the law on self-employment prevented them offering statutory rights.

Uber, meanwhile, lost an appeal brought by two former drivers seeking to classify drivers as full employees and not self-employed and therefore entitled to holiday pay and the minimum wage.