01/05/2017 09:39 BST

Gig Economy Workers Must Be Protected From 'Appalling' Practices, MPs Urge

Employees are not being protected from exploitation, the committee said.

Drivers employed in the so-called gig economy should have worker status to protect them from the “appalling” practices they face, MPs have urged.

The Work and Pensions Committee called on the government to close loopholes which lead to workers being exploited because of “bogus” self employment.

An inquiry by the committee, which took evidence from firms including Uber, Deliveroo, Amazon and Hermes, found “starkly contrasting” pictures of their employment practices, the Press Association reported.

Charles Platiau / Reuters
Workers in the so-called gig economy face 'appalling' practices, MPs have warned

The MPs said the idea promoted by companies that flexible work was contingent on self-employed status was “fiction”.

The committee said the freedom companies have to deny people the rights that come with worker status failed to protect employees from exploitation.

It also leads to “substantial” tax losses and a possible strain on the welfare state, said the MPs.

Labour MP Frank Field, who chairs the committee, said: “Companies in the gig economy are free-riding on the welfare state, avoiding all their responsibilities to profit from this bogus “self-employed” designation while ordinary taxpayers pick up the tab.

“This inquiry has convinced me of the need to offer ‘worker’ status to the drivers who work with those companies as the default option.

“This status would be a much fairer reflection of the work they undertake which seems to fall between what most of us would think of as ‘self-employed’ or ‘employed’.

“It would also protect them from some of the appalling practices that have been reported to the Committee in this inquiry.

“Uber’s recent announcement that it will soon charge its drivers for sickness cover is just another way of pushing costs onto the workforce, to reinforce the impression that those workers are self-employed.

“It is up to Government to close the loopholes that are currently being exploited by these companies, as part of a necessary and wide ranging reform to the regulation of corporate behaviour.”

PA Archive/PA Images
Labour MP Frank Field said companies in the gig economy are 'free-riding on the welfare state'

The committee, which cut short its inquiry because of the General Election, said self-employment could be “highly desirable”, but could also be “deeply negative”, allowing firms to evade responsibility for their workers’ wellbeing.

Uber announced last week it is offering its workers a range of benefits such as sickness and injury cover which it says is the first of its kind for self-employed drivers.

An employment tribunal decided last year that Uber’s drivers were wrongly classified as self-employed and should be classed as “workers”, although the company is challenging the ruling.

Earlier this week HuffPost UK revealed that firms keen to distance themselves from controversial zero-hours contracts are tying staff to deals which carry many of the same problems and potential abuses.

Documents seen by HuffPost UK suggest companies are able to exploit loopholes in the law to sidestep a 2015 ban on exclusivity clauses that stop staff working for other firms.

And they show how so-called ‘short hours’ contracts enable employers to demand staff to be at their “beck and call” - and potentially ask them to travel hundreds of miles for shifts.