A Labour government would give gig economy workers more rights and put a complete stop to exploitation, shadow chancellor John McDonnell has said.

In a speech to the Trades Union Congress in Manchester this week, McDonnell said that gig economy workers should be entitled to the same rights as full employees. This means they would get sick pay, parental leave and protections against unfair dismissal.

In the gig economy, workers get paid only for the “gigs” they do. Such gigs may include delivering food or providing a taxi journey. Currently, they miss out on the protections awarded to those legally considered to be employees.

IR35 Tax Investigation & Liabilities Insurance - From £120.00

McDonnell insisted that it’s time to close legal loopholes and strengthen enforcement against employers who duck their responsibilities. “When the balance of power shifts so dramatically away from workers as it has done today, it’s time for us to tip it back,” he said.

A government report into modern working practices – published in February – found that 4.4% of the population had worked in the gig economy in the last 12 months. This equates to roughly 2.8 million people. It said that gig workers enjoyed the flexibility and freedom to choose when they worked. However, it pledged to develop greater clarity around employment status, better upfront information to workers and increased enforcement of employment rights.

Policies don't go far enough

But McDonnell said the government’s policies don’t go far enough and that the report’s starting point is that flexibility must come at the price of insecurity.

“This is wrong,” he said. “Just because you don’t work regular hours doesn’t mean you can afford not to work when you are sick. Just because you work several jobs doesn’t mean you can afford to lose one of them without warning. Because you value the freedom of independence or the convenience of flexibility doesn’t mean you have to forgo basic rights.”

The same rights

Instead, Labour’s manifesto suggests three policies. These will give workers the same rights as full employees:

“First, shift the burden of proof, so that the law treats you as a worker unless the employer can prove otherwise,” McDonnell said.

“Second, extend full rights to all workers including so-called “limb b” workers entitling everyone in insecure work to sick pay, maternity rights, and the right against unfair dismissal from day one of their employment.

“Third, properly resource HMRC.  And fine employers who break the rules so that people get the rights they are entitled to.”

Flexibility lost

However, some industry groups fear these measures could place too many obligations on workers and remove the flexibility over how they work.

The Association of Independent Professionals and the Self-Employed said: “Labour’s proposal will drive a stake through the heart of the flexibility. This is what makes gig work so attractive to people.”

Instead, it said that the government must “stamp out ‘bogus self-employment’. This is where unscrupulous companies unilaterally declare their workforces to be self-employed.”

It added: “It would be a mistake to conflate ‘bogus self-employment’ with the ‘gig economy’ or wider self-employment, and then try to regulate these ways of working into oblivion.”

Professional Indemnity Insurance - From £144.00