The BIS and Scottish Affairs Commons Select Committees have published a joint report recommending greater protection for workers when a business is faced with insolvency. The report was issued in response to the recent collapse of City Link (The impact of the closure of City Link on Employment).
Like other parcel delivery companies, City Link used a number of self-employed workers to service its contracts. When it went into administration, most workers were left with little information, no opportunity to find alternative employment and no redundancy payment.
The Committees’ report not only recommended better communications during an insolvency but also urged the Government to “set out what steps it is taking to prevent workers from being pushed into bogus self-employment”. It recognised that self-employment and the flexibility it offers is good for business and individuals but expressed concern that some people may have no option but to accept such arrangements. Unlike employees, following an insolvency, the self-employed have no preferential status.
It’s the end of a Parliament – will anything change? To some extent the existing law on employee status will ensure that bogus or “sham” self-employment arrangements are held to be invalid.