Agency work could take over from gig economy models predicts employment specialist

Jul 12, 2017

Agency work will consolidate its position as the UK’s favourite way of engaging flexible labour, should government act on a recommendation for the self-employed to be entitled to the National Minimum Wage.

The prediction follows The Resolution Foundation’s call to ensure low-paid self-employed workers are instead classified as workers, with wage protection.

The think tank, which has also submitted the recommendation to the Taylor Review on modern employment practices, says that about half of the 4.8m people classified as self-employed are low-paid and earn less than £310 a week.

Christopher Tutton, partner at law firm Constantine Law, told Recruiter that were government to act on the recommendation, agency models would increase in popularity among employers, over gig economy models, as a means of continuing to engage flexible labour.

“It removes the major differences. You may as well be put through an agency. I think this is going to drive people out of the gig economy into an agency model,” Tutton said.

“Say you’re a gig economy company and you can save National Insurance and you can have self-employed workers, who are just paid gross and sort out their own tax, that’s great and that’s what they’ve been doing.

“But if they are going to be classified as workers instead, with wage protection, then you have a direct contract with that individual; they have enhanced rights, you have to pay NI Contributions – they have more protection and they can sue [employers] directly.

“Why would you then carry on with that model instead of engage agency labour as it’s flexible and the agency manages all of the payroll and engages people as workers?”

of the year.

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