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‘Self-employed’ gig economy workers could enter auto-enrollment

17 July 2017

Does the submission of food delivery service Deliveroo to the government’s review of employment practices hint at change in employment law around the self-employed?

In  its response to the government’s review of employment practices conducted by Matthew Taylor Deliveroo said if employment rules are changed they would give their workers certain benefits including pensions, which would bring gig workers into the world of automatic enrolment.

Jon Greer, head of retirement policy at Old Mutual Wealth, says this hints at change on the horizon in terms of employment law for the self-employed.

Greer says: “The announcement from Deliveroo reinforces the argument that government needs to re-consider who is considered self-employed. According to the government a person is considered self-employed if: ‘they run their business for themselves and take responsibility for its success or failure.’  Gig economy workers clearly don’t fit this definition and yet they still lack basic workers benefits like pensions.

“Deliveroo’s announcement gives a strong indication that a proposal to re-classify gig-economy workers will be included in the upcoming government review of the self-employed, which is being carried out by Matthew Taylor.

“It’s been hinted that Deliveroo would look at providing its workers with some kind of pension rights along with other benefits. If they are treated like the employed then they would be brought within the automatic enrolment fold, with those earning between £5,876 and £10,000 having a right to join a pension scheme provided by the company, while those working around £10,000 and above being automatically enrolled. To date automatic enrolment has passed them by.

“However, there are challenges in applying auto-enrolment for all categories of the self-employed. The hugely diverse nature of the self-employed population means creating a single policy or solution will have implications on its coverage. It is likely that the different categories of the self-employed people will need different solutions.”

 

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