Documents from three major companies which use casual labour to conduct piecemeal work were examined by the Commons Work and Pensions Committee.
One contract used by food delivery firm Deliveroo included an “egregious” clause on employment status with the apparent intention of putting people off challenging their rights at work, the committee said.
Deliveroo’s clause forced signatories to accept they were not working directly for the firm and indemnified them for costs should they wish to dispute it in court.
Contracts used by taxi app Uber and retail giant Amazon also precluded disputes over employment status - but neither went as far as Deliveroo in their attempts to see off a court challenge.
Labour MP Frank Field, the committee’s chair, said: “These companies parade the ‘flexibility’ their model offers to drivers but it seems the only real flexibility is enjoyed by the companies themselves. It does seem a marvellous business model if you can get away with it.
“My worry is that as a result these companies contribute little to the public purse or our social safety net. They are not paying sick leave, National Living Wage, or contributing to pensions. Yet it seems likely that their employment practices will lead more people to need taxpayers to pick up these costs.”
Field also criticised the confusing legalese employed by Uber, pointing out that many of its drivers have English as a second language.
“Quite frankly the Uber contract is gibberish,” he said. “They are well aware that many, if not most, of their drivers speak English as a second language – they recently lost a court case trying to escape TfL’s new English testing rules for private hire drivers – yet their contract is almost unintelligible.
“And it, like Deliveroo’s, contains this egregious clause about not challenging the official designation of ‘self-employed’, when the way they work looks in most ways an awful lot like being employed.”
The committee’s inquiry into self-employment and the gig economy has been welcomed by workers’ representatives.
Jason Moyer-Lee, of the Independent Workers Union of Great Britain, told The Huffington Post UK: “I think it’s good that MPs are questioning these companies. That’s a good sign. But what we need is government enforcement.
“The clauses in the contracts that say that if a worker takes Deliveroo to tribunal they are indemnified for legal costs - we don’t believe it’s enforceable. But this clearly shows that Deliveroo is concerned about its sham operations being challenged by a tribunal.”
There’s no deterrent for companies to use these arrangements Jason Moyer-Lee, IWGB
The union is fighting for union recognition for riders in Camden and Kentish Town. Moyer-Lee added that, while the contracts have likely deterred workers from taking legal action - the effect is little in comparison to that caused by the introduction of tribunal fees.
“Since the fees came in, the number of tribunal claims have fallen by around seventy percent,” he said. “There’s no deterrent for companies to use these arrangements, but there are huge deterrents for workers to challenge the companies.”
I didn’t feel valued as a worker Mel*, Deliveroo rider
Mel*, a Deliveroo rider working in central London who is involved in the union’s campaign, told HuffPost UK she felt “intimidated” by the firm’s contract when she signed it just over a year ago.
“I was intimidated and knew it was important to them to try to intimidate me. I didn’t feel valued as a worker,” she said. “To me, it goes to show that it’s obvious that they are scared about being challenged on this.
“I have set shifts, the vast majority of Deliveroo workers are told they must work two out of three weekend nights. When I set up you could choose your shifts at the start of the week. Now you are given set shifts. Your hours are cut without notice.”
Katie Mahoney, an employment solicitor at Doyle Clayton, agreed some of the clauses mentioned were unlikely to be legally enforceable.
She told HuffPost UK: “In all likelihood, companies will be aware that these types of clauses are unenforceable but they include them anyway as a deterrent[, for example] to discourage the individuals from bringing claims.
“Unless these individuals have advice on their contract or, for example, they are supported by their union, they may not realise that this is something that they can challenge in court.”
Deliveroo said on Wednesday evening that it will honour a previous pledge to remove the clause on its riders’ employment status “in the coming weeks”.
The Guardian reported on Wednesday that the firm issued guidelines to staff telling them to refer to riders as “independent suppliers”.
Uber said there is nothing in its contracts to stop people challenging it in court - and that, last year, a group of drivers did just that.
In that case, an employment tribunal found drivers using Uber can be classed as workers - and are not self employed. Uber is appealing the decision.
Amazon said its Flex contracts were majority used by those wanting to top-up their income, and that they can choose work to suit their own schedules.
It comes after lawyers acting on behalf of around 200 riders with Deliveroo prepared the first stage of legal action - arguing that they are in fact employed.
Solicitors Leigh Day said last week that they were preparing to take the first twenty cases to the conciliation group Acas - a required first step before commencing legal action in the courts.
But not all Deliveroo’s riders are unhappy with their status with the firm.
Cain Jones, a rider from London, told the inquiry last month: “I enjoy it and it’s flexible and freedom for me. Based on that experience I’d take on more self-employed work.
“I understand that being self-employed means it comes with risk. If you want to earn that extra money and you’re off sick, you don’t get paid. I understand that, there is no-one else to blame.”
A Deliveroo spokesperson said: “As a British business, we’re proud to offer well-paid flexible work to 15,000 riders across the UK and we’re committed to ensuring that as the company continues to grow riders continue to benefit from that growth.
“As outlined to the Work and Pensions Select Committee, we are always revising our supplier agreement to ensure it reflects how we work with riders in practice. That is why we are removing the clause discussed, which has never been enforced, in the coming weeks.”
An Uber spokesperson said: “Almost all taxi and private hire drivers in the UK are self-employed.
“We’ve always been clear to drivers who use Uber that they are self-employed and free to choose if, when and where they drive with no shifts, minimum hours or uniforms.
“There is nothing in our terms to stop anybody challenging this. In fact a small group of drivers recently took us to an employment tribunal claiming they’re not self-employed.
“We recognise our terms could be written in plainer English and we started the process of revising them some time ago.”
Amazon said: “Amazon Flex offers people the opportunity to make great earnings working on their schedule to deliver Amazon parcels.
“The majority of people participating in Amazon Flex already have full or part time jobs and use the programme to top up their income, with 70% working 10 hours or less a week, in 1-4 hour delivery blocks, and earning £12 to £15 an hour.”
*Mel is a pseudonym