EMPLOYMENT RIGHTS: FIRMS ARE EXPLOITING SELF-EMPLOYMENT CONTRACTS. THIS MUST STOP!

By: Michaell Lange,

London, 14/08/16 –

The Court of Justice is about to expose what has been claimed to be a scandalous employment rights’ exploitation. Delivery and minicab firms throughout the UK have been accused of denying their drivers of basic working rights such as minimum wage, sick pay and holidays, by imposing self-employment contracts upon them. This would stop these companies from complying with would otherwise, be their obligations.

It became normal practice throughout this industry. Delivery and minicab drivers have been working as self-employed sub-contractors when in most cases, the atributes of their jobs are similar or equal to those stated as workers and employees. Nevertheless, Hundreds of thousands of drivers are working with little or no employment rights at all. A spokesman from the Department for Business, Energy and Industrial Strategy (BEIS), told The Guardian newspaper last week that, “An individual’s employment status is determined by the reality of the working relationship and not the type of contract they have signed”. If that is the case, almost all minicab and delivery drivers working in the UK on the bases of a self-employment contract, should have their employment status upgraded to worker or employee. “Individuals cannot opt out of the rights they are owed, nor can an employer decide not to afford individuals those rights. Employers cannot simply opt out of the National Living Wage (NLW) by defining their staff as self-employed.” (The Guardian)

How it works

If you are looking to become a delivery/minicab driver, you will be asked with few exceptions, to sign a contract with one of many operators in the country. You will need to have a full UK driving license and a PCO license (if you want to carry passengers). You will then, be given a van, a motorbike or a car, depending on the type of the job you are signing up for. It works on a rental contract. A XDA or PDA will also be provided so you can receive details of jobs you are going to do. You will also be given uniform, ID badge and a call sign. Once you are ready to go, you will receive jobs, but only from the company you have signed up for. You are not allowed to work for anybody else. Do it privately or pick up a passenger without pre-booking and you will be breaking the Law. As a private hire driver, you are only allowed to pickup passengers with pre-bookings. Your company (not you), will decide which driver will get a particular job as well as, how much you will be paid for it. Unless you are a car owner, you will be using a company car, usually with the company logo on it, an uniform and equipment. They will have total control over how many jobs and how much they will pay you every day. Your responsibility is to be available for work as long as possible. You are required to work at least 12 hours a day. The courier company charge a commission fee on each job you do which can be up to 60%, plus car rental and insurance. Any damage to the car or equipment and you will be charged for it. You also have to pay for any traffic related incidents like penalty charges, punctured tyres, broken windscreen, windows and fuel. All time lost on repairs, services and recovery, are at your cost. You are not entitle to receive sick pay, overtime, or holiday.

You have to log in to the company’s system at the start of your shift and wait for the first job to come in. Once you have a job, you must do it, although, some companies allow up to 25 seconds on ASAP jobs for the driver to accept or refuse it. However, refusing a job can put you in serious trouble with the company, and if you keep refusing jobs you will be made inactive. So for instance, if you live in Richmond and you are in central London waiting for a job towards home after your 12 hour shift and you are given a job going to Stansted, you are expected to do it, even if you have to drive 30 miles empty back home.

In most cases, the first job is quickly allocated, but during half-terms and school holidays it can take up to an hour. During summer, specially during July and August, some drivers might work 12 hours shift and do as little as 3 or 4 jobs. The costs on insurance and rent remains the same throughout the year. January is also a very quite month. During these periods, a van and minicab driver, working 12 hours a day, six days a week might get up to £450 pounds before costs. Costs are usually: Rent: £100/170 pounds; Insurance: £55/70 pounds; fuel: £100 pounds and Tax. That is per week, considering you have no traffic related incidents. It is not unusual to see drivers working on a loss during down periods. Even during pick times it is getting harder and harder for drivers to breakeven. This is where companies benefit from self-employment contracts, as they have no obligations such as sick pay, holiday and minimum wage towards their drivers. Drivers on the other hand, have no rights and have to bare all the costs. Companies can also hire as many drivers as they please as they have no added costs in doing so. It increases availability and consequently  increases their revenue. However, for the drivers it means more competition, less jobs and consequently less revenue. The car rent paid by the drivers usually pays all the costs the company would have with the car, and that’s including the leasing contracts. At the end of the leasing contract the company will have a car which can be sold for a clean profit. The drivers that actually paid the lease by paying car rental every week, gets nothing in return.

After the introduction of UBER in 2013, and the arrival of private equity firms to control many of the big companies, job prices are going down to attract more costumers. They are also charging more from drivers to work for them. Lowering the prices is a good thing to attract more costumers, but in some cases drivers are paying the full cost of these changes while companies will not lose any revenue by lowering prices. Some companies for instance, are giving up to 30% discount to passengers during off pick, but this 30% discount is entirely paid by the driver. Commission are also up. Cash jobs used to be commission free. Now there is a 20% commission on it. In many cases the driver has a 50% cut on his payment at the start of a job, and that’s even before they pay for car rent, insurance and fuel. In these cases, drivers will be left with almost nothing at the end of the job. There are many cases where after 70 to 80 hour worth of driving in a week, your average payment can be as little as £4 pounds per hour, much lower than the legal minimum wage. Anyone earning £4 pounds a hour in London will be fighting to survive. So for example: on a cash job from SW1 London to Heathrow, the  driver used to be paid an average of £70 pounds. Today, the driver has to pay 20% commission to the company he/she works for, plus 30% discount given by the company and charged from the driver. That means, the driver will now be paid £35 pounds before car rent, insurance, Fuel and tax, if there is no traffic related incidents. At the end of the job you will be left with as little as £10 pounds. But, this is not all. Once you drop off a passenger at the airport, you can either drive back to central London empty, or wait for a job at the airport which can take at least 2 hours as you are placed in a queue system. Either way, the driver will lose money by driving back to town empty, or waste at least 2 hours waiting for another job at the airport. It became a no win situation made worse by a self-employment contract that gives little or no rights to drivers and no obligations from the company you work for.

What we have noticed as result of these new corporate strategies, is that companies are increasing their revenue while drivers (the only source of revenue for most of courier companies) are experiencing a sharp drop of up to 50% on their earnings. In the other hand, to keep their heads above the water, drivers have been forced to work longer hours, which in return, increases availability and improve even more the company’s results. There are many reports of drivers working over 100 hours a week  just to make ends meet. It is utterly unfair and extremely dangerous for everybody including costumers.

Big courier companies have been able to get away with it for years, but now it seems drivers had enough. There are countless court cases against courier and minicab companies going through the courts at the moment. If the Courts decide these drivers should be treated as workers or employees, companies throughout the country will have to pay compensation as well as upgrade their drivers status from self-employed to workers status. That means they will have to pay the same rights as any worker should have in the first place. It will change the industry as a whole and stop companies from abuse the system for their own benefit. The future of thousands of families throughout the UK are depending on how the Courts will rule these cases. If justice is to be above money, drivers must have some money back and the culture of abuse should stop immediately. Justice must be done for professional drivers.

 

Source: https://www.theguardian.com/society/2016/aug/14/deliveroo-told-it-must-pay-workers-minimum-wage?CMP=twt_gu

 

2 thoughts on “EMPLOYMENT RIGHTS: FIRMS ARE EXPLOITING SELF-EMPLOYMENT CONTRACTS. THIS MUST STOP!

  1. Great article October will be a interesting month

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