Should the law be telling business owners what to do?

04 Mar
by Donna Obstfeld, posted in Blog   |  No Comments

Cake and Eat itOn losing a case at the High Court in February, Charlie Mullins of Pimlico Plumbers used a phrase which completely sums up the modern work place:
“He wanted to have his cake AND eat it”! He used the term after one of his ‘staff’ won a case for worker rights and was therefore able to benefit from sick pay, despite being a self-employed contractor for the previous 6 years.

I often use an analogy to a duck – “If it looks like a duck, quacks like a duck and waddles like a duck, then it is a duck, regardless of whether you (the employer) or they (the individual) call it a chicken, a hen or a goose!”

However, although the law appears to have been clarified further by this ruling (and other rulings involving Uber and Addison Lee amongst others), there is a vital missing ingredient.

The employment laws which exist in the UK today are archaic! In many cases they are no longer fit for purpose. They are a noose around the necks of employers and they often require employees to work in ways they don’t want to.

Many, but not all of the employment laws have come from the EU as directives, but take a look at the application of those laws across the different EU countries and they bear absolutely no resemblances to each other. Like many legal frameworks, case law has continued to shape the application of the original laws to an extent that original intent is no longer recognisable – we have fences around fences and interpretation on interpretation that leaves today’s employers struggling to employ, manage and / or remove employees (of all statuses) from the workforce.

Young peopleWhile there is still a need to protect the most vulnerable in our workforce from rogue employers, young people entering the workforce today have different skills, needs and values from those still in the workforce at the upper end of the age scale. Employee Management is no longer the ‘one size fits all’, which employment law is still trying to shoehorn us into.

Different industries have different requirements and what is right for a mini-cab company is not necessarily right for a security company or a retailer, a digital agency or an accountancy practice. Equally what is right for a public sector organisation such as a County Council, is not right for an owner managed marketing agency with 2 members of staff. And yet – the same employment laws apply, the same disciplinary and grievance requirements and the same penalties when things go wrong.

Entrepreneurs who set up and run their own businesses need a framework which is fit for purpose. They need to be able to hire the right people, train them and if they are no good, terminate their employment. Presenteeism is not acceptable when employers have a business to run and if their staff can’t do the job, they need to be able to fire them without the risk of an employment tribunal.

The use of alternative employment structures such as umbrella payrolls, the use of contractors and freelancers and the use of zero hours contracts are all highly controversial with Government and the trade unions, but removing all the flexibility which these vehicles provide to today’s workforce and employers is completely counter intuitive.

Progress in society always comes from people who challenge the status quo. Where there is a better model, improved technology, a more suitable path and an alternative reality, change occurs to meet the needs to society and what was once disruptive and unacceptable becomes the norm. Examples are as extreme as the black vote in America and women entering the workplace in the UK.

Progress is essential and inevitable and as such, employment legislation needs to keep up with the changes to enable business owners to run their businesses for a profit, employ more staff in the most appropriate way, pay more in salary and taxes and provide the products and services society needs and wants.

For the law to dictate that zero hour contracts are not appropriate when some employees want to work flexibly to fit in with their family lives and other commitments is a move towards a nanny state.

For the law to dictate that contractors and freelancers are actually employees and entitled to employee rights will in some cases mean that businesses have to stop trading and all those individuals lose their jobs. In these instances, products and services are no longer available. Alternatively, someone else comes along and finds a way to do it differently, perhaps unregulated, illegally or charging more which consumers or the Government are then forced to pay.

Don’t get me wrong – there are times when people shouldn’t be on zero hour contracts or shouldn’t be contractors, but enabling businesses and their workers to be flexible is an essential criteria for today’s modern workplace and the future society in which we will be living.

If an employer and an individual agree on a way of working together which is acceptable to I agreethem both, there is a contract in place (either for employment or services) and they are paying their taxes in line with HMRC guidelines, then why is the tribunal court system even getting involved. In the case of Pimlico Plumbers, the individual’s circumstances changed and while that is regrettable, it should not be to the detriment of the business.

If an individual is working on a self-employed basis, they should be genuinely self-employed and that means taking responsibility for their working hours, taxes, insurance, health, safety and welfare.

Individuals should not have more rights than business owners and they should not be able to have their cake and eat it!

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