When is a job not a job? When it's a 'self-employment' opportunity

I am one of the 4.14 million self-employed workers in the UK. I was feeling rather special and especially courageous for going it alone, but now I am one of over 4 million I don’t feel quite so amazing. Having said that, and even though I was somewhat ‘bounced’ into doing it by being made redundant, it is something I had thought about for a long time and I have a fair idea of the drawbacks as well as the benefits. That probably sets me apart from quite a few of this growing band of freelancers.

A report by the Chartered Institute of Personnel and Development (CIPD) last week revealed that, while the number of employees has fallen 3% since the beginning of the recession in 2008, the number of self employed has increased by 8%.   I’m not one to jump to false conclusions, but could it possibly be the two are at least in some way connected?  Could it possibly be that some people, unable to find a decent job (or any job), are going it alone just to keep bread on the table?

The CIPD report does indeed suggest those swelling the ranks of the self employed are not all the entrepreneurial souls David Cameron and the ever-enthusiastic Richard Branson would like us to think they are.  It highlights how these ‘additional self employed are unlike self-employed people as a whole in terms of gender, hours of work, occupation and sector of employment’.  In fact, 90% of those who make up the net rise since 2008 are working part time and more than half are women.

John Philpott, the report’s author, said the rise ‘is having quite an important dampening effect on unemployment numbers.  The job situation is so tight, people are taking what they can get.’  He talks about people ‘without skills, picking up whatever bits and pieces of work are available’.  Quite.  So not exactly The Apprentice or Dragons’ Den, more The Full Monty.

This sort of self employment surely needs another word to distinguish it from the sort Cameron and Branson are really talking about and that can produce Amstrad, Virgin or Facebook.  A better term would be ‘odd jobbing’, because that’s what it is, rather than a conscious decision to become the master of your own destiny.

Which makes me think it’s totally inappropriate for the prime minister to talk about this growth of self employment as a demonstration of ‘popular capitalism’ and entrepreneurial zeal.  It’s all very well to laud those who ‘take a risk, quit your job, create the next Google and wind up a billionaire’, but that isn’t likely to be the experience of most of the new army of the self employed.

Delve a bit further and the truth is even murkier.  It turns out that, far from being the ticket to being your own boss, becoming self employed is often just a dirty trick by employers to circumvent the rules and regulations and deny people their passport to a range of employment rights and protections.

The Mirror’s Gizza Proper Job campaign has exposed numerous examples of firms across the country blatantly hiring people on a self-employed basis to avoid paying national insurance and the minimum wage.  Such as the full-time but self-employed ‘trade platers’ who work for BCA Logistics, the country’s biggest ‘driven vehicle delivery service’.  They get no sick pay, no holiday pay and have to make their way between jobs in the own time and at their own expense.

Unbelievably, some bosses are even brazen enough to boast about the practice openly, on national TV.  Hairdresser boss Mark Coray, manager of Coray and Co, told BBC’s Panorama that he made some of his staff self-employed to avoid paying holiday pay, sick pay and national insurance: ‘It's almost like a legal way of avoiding the high overheads that come with the minimum wage’.  Nice.

Over 10,000 hairdressers have been recognised by their employers as ‘self-employed’ in the last year.  However, I am guessing that most of them are not really their own boss at all.  I can’t imagine the boss of the new beauty salon advertising for ‘self-employed’ hairdressers will let you turn up when you want and do the hours you like.  Whatever the ad might say, if he controls what you do, tells you what hours you work and requires you and only you to do it, you are likely to be an employee.

Why isn’t anyone making more of a fuss about this?

The government has been banging on about how it’s the spiralling number of vexatious and speculative employment tribunal claims that is making firms afraid to hire people and restricting economic growth.  Never mind that official figures, published last week, show the number of claims from October 2010 to September 2011 going down 13% year on year.

So if that isn’t the reason for firms not hiring people, what could it be?

It could be, of course, there genuinely aren’t any jobs.  Or it could be that firms aren’t taking on employees and are instead offering people ‘self-employment opportunities’.  That is, getting people to do the jobs they need doing but without all the bother of having to give them any employment rights.

Thousands of the new self employed are not experiencing the delights of being your own boss, the joys of flexible working or the enticing possibility of becoming billionaires, not even close.  Most of them are being paid below the minimum wage, have no holiday, maternity or paternity pay or parental leave and god help them if they’re sick because they won’t get a penny.

These self-employed ‘entrepreneurs’ have no job security, no access to their ‘client’s’ disciplinary or grievance procedure or to a company pension.  And if it all goes really pear shaped they’ll have no rights to union representation, no redundancy pay and they won’t get job seekers allowance either.

Does it matter?  Isn’t it better people have a job, any job, rather than not working?

Well yes, it matters a lot.  Without the rights and protections you get from being employed, you are just one step away from exploitation.  And you can bet the reason these dodgy bosses don’t want to pay their dues is not so they can plough it back into the business and invest in growth, ultimately employing more people, it’s so they can buy another Jaguar and a house in France.

They shouldn’t be allowed to get away with it.

Posted in: Employment law

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