A new report identifies co-operative models as solutions to precarious work in the gig economy.
Working Together: Trade Unions and Co-operative Innovations for Precarious Work says the UK is failing its 7.1 million self-employed workers and calls for increased protection for them.
“Not only do they have almost no security, but while the average employed worker is losing out year by year in real terms. The self-employed are doing even worse, earning less each year in cash terms,” said co-author Alex Bird.
“1.7 million of those in precarious employment are earning less than the national minimum wage, with no real enforcement of the law, and the self-employed are not even covered by the existing legislation.”
To respond to the challenges faced by workers in the gig economy, the research suggests replicating the umbrella co-operative model to support freelancers and other precarious workers. It gives the example of SMart, a co-op based in Belgium, which helps 85,000 workers in the freelance sector gain access to welfare benefits, tax support and advice.
Sarah de Heusch Ribassin, project officer for the Development Strategy Unit at SMart, said: “Many of those who were self-employed found the legislation around taxes to be so complex and were afraid to do things wrong. SMart offered an alternative that meant they no longer had to worry about making errors that would affect their income.”
The report also looks at Indycube, a co-operative of freelancers and self-employed that offers access to workspaces in more than 30 locations across Wales. In addition, the co-op works with the trade union Community to offer a range of benefits including advice on tax, insurance, pensions and employment law.
Mark Hooper, founder of Indycube, explained how freelancers often found themselves presented with complex contracts with legal jargon, which can result in problematic agreements and issues with payment.
“Community’s legal team are able to advise on these sorts of documents which many independent workers wouldn’t otherwise be able to access. Likewise, invoice factoring is a service which is generally only available to bigger companies and organisation But banding independent workers’ voices together and working in partnership with Community has allowed Indycube to secure access to invoice factoring, effectively putting an end to late payments for our members.
“Fifty-one per cent of invoices are paid late, a figure we think is far too high, and Community’s support has enabled us to make progress in this area. Thanks to Community’s status as an established union, Indycube has been able to cement itself in the minds of policy-makers and others as a voice for the fast-growing group of independent workers.”
Les Bayliss, national officer and head of special projects for Community, added: “Our partnership with Indycube is one of a number of newly developed initiatives where, as a trade union, we are reaching out to new workers in today’s world of work.
“We will continue to listen to and understand what they need from a trade union, providing support, representation, mediation and settlement. Working together we hope to develop a ‘one voice’ approach to the needs of self-employed, freelance workers, speaking out and campaigning on the issues that affect them most.
“As a trade union we will continue to learn from our new initiatives and our new members, building new alliances with others in the private, co-operative and not for profit sectors. We will reach out to workers by being relevant to them and their needs.”
Ed Mayo, secretary general of Co-operatives UK, said the number of zero hour contract workers had increased by 800,000 within the past decade, with 77% of self-employed workers living in poverty.
“These are incredible numbers,” he added. “With increased precariousness comes the need for increased protection and support and we know that co-operatives and trade unions can be part of the solution to this growing need.”
Cilla Ross, Co-operative College vice principal and co-author of the report, said: “The experience of growing numbers of workers in education, from teachers in the compulsory (pre-16) sector through to further, higher and adult education, is one of casualisation and precarity. This report pulls together examples of how unions and co-ops are successfully working together and offers real solutions on how precarious work can be challenged.”
The report, which is available online, includes a number of case studies of co-ops and trade unions working together such as the Swindon Music Co-operative and the Musicians Union and the partnership between actor co-ops and the actors union, Equity.