The Future of Work - UnderPinned

I am learning how to play the guitar. It’s purely for my own enjoyment but every few weeks I go to the house of a teacher. She plays something beautifully, I play it back adequately, and then she tries to teach me to play better before settling for mediocrity. She has other students, but the big love of her life is playing the blues live.

This set up is familiar to a large tranche of young people across the U.K. They are making ends meet in work that may be only tangentially related to what they actually want to do. A musician doesn’t want to have to teach when she could be playing to an audience, a graphic designer doesn’t want to pull pints, an illustrator doesn’t want to be a PA. Some young people chase these dreams over job sites such as Freelancer or Upwork and settle into a lifestyle where the odd jobs keep the bigger ambition alive.

There has been a significant movement away from traditional forms of work to gig work driven by customer demand, by platforms and by the choices of people themselves. But whether we celebrate or bemoan this development surely the question we must ask is “what can be done to make the future of work easier for the next generation however they choose to work’. There are currently nearly 2 million freelancers in the UK, and that number is likely to continue growing.

So, what must change in order to help freelancers just starting their careers? Streamlining HMRC to make it work better for freelancers should be an absolute priority. One slightly left-field suggestion would be to ban cash payments for freelance or casual work. Insisting all payments go through licensed payment platforms would transform tax compliance and increase HMRC’s revenue. Some of the extra money could then be used to enhance entitlements for self-employed people in areas like sickness insurance and pensions. Five years ago, a shortage of scrap metal led to an uptick in the robbery of metal which was then traded in for cash. In early 2012, all cash transactions for scrap metal were banned causing a major decline in such theft.

A more immediately structural suggestion is that we should move towards taxing all labour equally regardless of the employment status of the provider of that labour. This would help avoid the cat and mouse game whereby organisations and individuals seek to classify work as self- employed (and therefore attracting less tax) only for the tax authorities to tighten the rules (as in the IR35 reforms) or fine people for tax evasion.

When it comes to defining freelancers, we need to recognise the diversity of freelancers, from someone at the beginning of their career, working in a highly competitive and oversupplied market, to a highly skilled and sought-after consultant who can charge a premium for their services.

The differences in power and experience of what the Resolution Foundation has described as ‘the precariat’ and ‘the privileged’ can make it difficult to form absolute conclusions about the freelance experience.

I remember some time ago, someone told me they stopped freelancing because they got tired of being the only person at their Christmas party. Being part of a company is often more than just having a job, it’s about being part of a community where people are willing to make sacrifices for each other. It can be akin to a sort of surrogate family to some. We need to find innovative ways to combine the autonomy of freelancer status with aspects of community and mutual support.

As I outlined in the review I led and published last year, one approach for the government will be to encode in legislation the principles that the courts have tended to apply to companies such as Uber and Deliveroo and recognise their employers as workers, meaning they are given most employment rights.

When I argued to some platforms that they should recognise people as workers one reaction was that it is difficult to reconcile on-demand working with guaranteeing the minimum wage. The Review came up with an ingenious solution to this problem but one which few people fully understood. We argued that workers would not be able to take action for non-payment of minimum wage if the following conditions applied:

  1. The company would have to demonstrate that the average worker working averagely hard would get 20 per cent more than the minimum wage.
  2. It would have to genuinely be the case that your workers could choose when to work and there was no punishment for them choosing not to work.
  3. You would have to give consistently accurate data to workers about how much they’re going to earn at any moment.

Imagine you are a student working for Deliveroo in a rural area and want to make a few extra quid delivering food. You log on to discover that there is little demand for takeaway food, but you are still willing to be available even though you are unlikely to earn much. In those circumstances, I don’t think the company should be liable for minimum wage. My view was that without such provision the platforms would end on-demand work and few of the workers I spoke to wanted that to happen. I think this could have worked, but I have to recognise that a lot of people feared this would create a minimum wage loophole that could be exploited.

While some gig platforms should employ people as workers, there’s no question that other platforms such as Airtasker and Taskrabbit are catering for the genuinely self-employed as the hiree is choosing the type of work and fixing the payment rate.

There are still issues for these platforms about fairness and expiation. One way forward might be that hirers should be required to indicate the amount of time they think any job is likely to take along with the fee. That way at least it would be possible to see if hirers were offering unreasonably low hourly pay. So, if someone asks for work that should take ten hours and is offering £20, the platform would be forced to address this. Had I thought of this idea when I was writing the review, I would have included it.

With the government focus on Brexit, it is hard to predict the amount of time the government will spend on the good work agenda. Theresa May is clearly in a hugely challenging position, as she seeks to negotiate leaving the EU. Despite the wishes of some hard-line Conservative MPs, I doubt that the public wants Brexit to mean full-scale labour deregulation. Brexit does of course also present an opportunity for lawmakers to step up in developing workers rights for the future. However, as with all things in politics, it is easier said than done.

As I said in my Review flexibility is a good thing, but it must be genuinely two way not just benefiting the hirers of labour. This means finding a middle ground between regulation for companies to protect freelancers and gig economy workers, but also allowing these platforms to grow in a way that will give the self-employed the ability to market and sell their work.

This article is an abridged version of an interview undertaken with Matthew Taylor and the words in it should not be directly attributed to him.

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