FCSA response to employment status consultation: the highlights
The Freelancer and Contractor Services Association (FCSA) has responded to the government’s consultation on employment status.
First, a bit of background. In February 2018, the government, (BEIS, HM Treasury and HMRC), launched a consultation borne out of the 2017 Taylor review into modern working practices.
The review highlighted the need for greater clarity in the area of employment status for individuals and businesses. It particularly singled out those working in new ways, including through digital platforms in the gig economy.
The FCSA contributed to the Taylor review and has put forward a comprehensive response to the consultation. They have spoken out in support of some the proposals put forward and in vehement opposition of others.
FCSA response – the crucial points
Viewing the self-employed workforce as a whole
The FCSA urged consideration of the dynamics within the UK self-employed workforce. It is not limited to gig economy or low paid workers, a substantial proportion is made up of highly-skilled, highly paid professional contractors.
How to determine employment status
The consultation proposed the codification of employment status, based either on existing tests or new tests.
The FCSA are strongly opposed to this due to the disruptive impact it would have on the flexible workforce.
Instead, they support the retention of the current case law method of determining employment status.
The FCSA expressed support for keeping the employed and self-employed statuses but suggested simplification through the removal of some worker statuses.
Key facts document
The key facts document should be circulated to all labour service engagements, not just where an employment business is involved (as suggested by the BEIS in the agency workers consultation). The document should detail the employment status, rights, benefits and tax position of the role on offer.
A recurring theme of the FCSA response is the need for more accessible guidance, possibly tailored by sector, from various government departments, including BEIS and HMRC. This will help ensure all parties consider employment before the start of an engagement, thus reducing uncertainty.
Use of existing legislation
The FCSA stressed the importance of robust and targeted enforcement of existing legislation. They reiterated that introducing new laws would require a “bedding in” period during which a lack of clarity and case law would give non-compliant parties even more opportunity to circumvent the legislation.
Liquid Friday fully support the response made by the FCSA to the consultation on employment status.
Liquid Friday’s Operations Manager, Joe Taffurelli, who also sits on the board of the FCSA, said:
“We firmly believe that the “codification” of employment status is not the answer. The UK has an extensive and extremely successful labour market and feel that the current case law approach is sufficient to enable engagers to make a definite decision on employment status. We believe that “codification” will not work as it would be impossible for the legislation to keep up to date with working practices. Case law does a fantastic job of keeping pace and should not be discarded.”
“As we enter a period of economic uncertainty, leading up to and following Brexit, it seems dangerous to re-write the foundation of contractual engagement. Increasing confusion and uncertainty at this time will only have a negative impact on the wider economy. I hope that Government uses this opportunity to listen to industry and re-consult on any potential changes”.