Supreme Court ruling a welcome win for the self-employed
For those interested in employment status (yes, there are in fact many of us), the last couple of weeks have been fascinating. First we had the publication of the Taylor Review, which recommended far-reaching changes to employment law. Now this week the government suffered a significant setback as the Supreme Court ruled that fees for employment tribunals are “unlawful”.
This latter development, which will force the government to refund a reported £32 million to claimants, should be wholeheartedly welcomed. Since fees, which ranged from £390 to £1,200, were introduced in 2013 there has been a 70 per cent reduction in the number of cases. This certainly hurt individuals who were put off going to tribunal to secure clarity over their employment status and rights they may be owed.
Survey after survey shows the self-employed are the happiest of all workers, and we need to keep it this way. Ensuring that unscrupulous companies aren’t able to push vulnerable individuals into self-employment is imperative, and this verdict will certainly help in that regard.
There is no doubt that employment status is a confusing area though, even for lawyers who spend their days poring over case law. Unsurprisingly, individuals struggle even more to figure out where they stand. IPSE would like the situation to be simpler, with less reliance on time-consuming tribunals to deliver clarity.
That is why in our submission to the Taylor Review we called for a statutory definition of self-employment. We know full well how complex a task this is, but we believe it is the right thing to do – giving individuals a clearer understanding about whether they should be self-employed or not. In the form of our ‘matrix’, we have developed a practical resource which we hope will underpin such a definition, as well as allowing individuals and larger organisations to better understand the nature of their relationships.
Although Taylor did not take up our call for a statutory definition of self-employment, he did recognise the need for greater clarity around employment status. One sensible recommendation he made was for greater alignment of tax and employment law. IPSE members have long criticised this discrepancy, so we will certainly urge the government to push forward with this proposal.
One area of greater contention is Taylor’s recommendation for a “dependent contractor” status. Aimed at giving greater rights to those self-employed people working through platforms, while not reducing their flexibility, government will need to be absolutely clear who falls into this group. Taylor has suggested looking at ‘direction’ and ‘control’ as the key indicators, but things are a lot more complicated than that. You still need to consider the ability to choose when and where you work, whether the role is project based and whether you have the right to send a substitute.
IPSE will continue to be a strong voice for the self-employed as these debates play out over the coming months. We should be encouraged that issues around employment status are now top of the news bulletins, and we must use this salience to ensure the self-employed get a fair deal.
Jordan Marshall is IPSE's Policy Development ManagerPolicy, Employment, HMRC