An employment bill is needed to clarify the status of platform or ‘gig economy’ workers, chair of the Work and Pensions Committee Sir Stephen Timms has said, as many gig economy firms are seemingly yet to auto-enrol workers despite a Supreme Court ruling in the case of Uber last year. 

 

Speaking at an event on ‘Who is missing out?’ on pensions, organised by the Association of British Insurers on Tuesday, the Labour MP for East Ham called on the government to ensure fundamental employment rights do not have to be fought for in the courts. 

 

“What we really need is an employment bill to clarify the employment status of gig economy workers including on auto-enrolment,” he said. Such a bill has been repeatedly promised by the government but was missed out again from last month’s Queen’s Speech, he observed. “Auto-enrolment and other rights ought not to be left to be fought out in the court,” he argued. 

 

Sir Stephen added that there was a suggestion that the government would issue guidance on employment, and that he has tabled a question asking the minister to set out his intentions. The Work and Pensions Committee has previously called on ministers for a timetable for the promised employment bill. 

 

Fred Hicks, senior policy and communications adviser at the Association of Independent Professionals and the Self-Employed, said IPSE is also hoping to see an employment bill. “A big part of that is clarifying the rules around employment status,” he said. This goes beyond addressing insecure work and should include clarifications on the tax status of the self-employed. “A lot of big pieces of legislation are needed to clear up the confusion,” he said. 

 

 

Employers in the so-called gig economy, such as ride-hailing app Uber, came into the crossfire globally, including the UK, for classing its workforce as self-employed despite workers being unable to set their own rates. In March 2021, the Supreme Court ruled that in the UK, they must be classed as ‘workers’ – a status between self-employed and employed – and are as such entitled to pensions. The ruling was followed by a trade union recognition deal with the GMB union. 

 

While Uber has started auto-enrolling its drivers and is clear that this is now a legal requirement, it appears that very few other platforms have done the same. Only delivery service Evri, formerly Hermes UK, announced in March that it is auto-enrolling 20,000 workers by the end of this year. 

 

    

When it set up its pension scheme, Uber called on its competitors to join forces and build a multi-employer scheme, but no other ride-hailing company has joined it so far.  

 

The regional general manager for Northern Europe of Uber, Jamie Heywood, was asked by MPs last week if Uber’s competitors were breaking the law by not auto-enrolling drivers. Heywood said that “they operate with very similar models to the way we did in 2016 and the way we do now”, suggesting that the ruling applies to them and they are in breach of their legal obligations. 

 

A spokesperson for competitor Bolt said there is huge demand across the sector and all operators will need to keep improving their offer to encourage drivers to use their platform. “Because of this Bolt will be launching new driver features and campaigns which we know appeal to drivers soon,” the spokesperson said but did not elaborate on what these will involve. The spokesperson added: “We regularly engage with drivers across the UK who say they like our existing model because it gives them the opportunity to earn more.” 

 

Sir Stephen said the Pensions Regulator has told him it is working with employers in the gig economy on pensions, hoping another 100,000 to 150,000 workers will be auto-enrolled as a result. However, with the Trades Union Congress saying that about 4.4m people work using gig platforms, even the numbers cited by TPR seem comparatively small. 

 

 

Gig economy work and self-employment, particularly in its insecure forms, are more prevalent among ethnic minorities. Last year, a report by the TUC and Race on the Agenda found that nearly 160,000 ethnic minority workers were on zero-hours contracts, around one in six of the 1m people on such contracts. In comparison, minority ethnic workers make up just one in nine employees. Research by University College London’s Morag Henderson, together with Georgina Bowyer and Douglas White from Carnegie UK Trust and Lord Simon Woolley from Operation Black Vote, found millennials from ethnic minorities are 47% more likely to be on a zero-hours contract. 

 

While data on the ethnicity pensions gap is still relatively small, a report by the Pensions Policy Institute from 2020 showed ethnic minorities had just 71% of the average private pension income. More data is set to become available soon, however. Speaking at the ABI event, Emma Watkins, managing director retirement and longstanding products at provider Scottish Widows, gave a preview of a report which found that 59% of people from black ethnic groups were very concerned about running out of money in retirement, compared with 53% of white British people.  

 

Watkins said the research also found a greater expectation among black ethnic groups of relying on money other than pensions in retirement, with people saying they would either continue to work, rely on family or use cash savings.  

 

People in the same group were also more concerned about the high cost of living than their white counterparts and were more likely to cut back on pension contributions. Watkins said although it was still unclear what causes these differences, “for me the most concerning is that this group is more likely to cut back on pension contributions". 

 

Do we need an employment bill to ensure gig economy workers get a pension?

Rob Yuille

Lauren Peacock

Tim Sharp