Neo-Villeiny: How firms use bogus self-employment to exploit workers

by Geraint Harvey, Carl Rhodes, Sheena Vachhani and Karen Williams

The ranks of the self-employed in the U.K. have increased considerably in recent years. Currently, around 15 per cent of working people declare themselves to be self-employed. But this image of a self-employed workforce needs to be taken with a grain of salt. Recent research by Citizens Advice Bureau that around 460,000 people might be ‘bogusly self-employed’.

It is reported that this bogus self-employment means that firms hire people as contractors rather than employees so as to avoid paying the minimum wage, National Insurance, sick pay, holiday pay and pension contributions.

The result? Workers suffer because money that was previously was paid to them is transferred to the coffers of the business. Society suffers because business pays less tax. The UK authority for income tax collection, HM Revenue and Customs, estimates that that it lost £430 million as a result of unpaid tax related directly to ambiguity in employment status. In the Republic of Ireland the figure is estimated to be €650 million in the construction sector alone.

A Downside for Employers?

It is believed that around 80 per cent of those who are self-employed in the UK live in poverty. Unsurprisingly, workers often respond to the precariousness of their employment with highly dysfunctional behaviour. If the self-employed worker is customer-facing, then their response to precariousness may be to act in an unsympathetic, unhelpful and rude way.

In an era of social media, the speed and word of mouth complaints means that if a bad service encounter ‘goes viral’, the ramifications for business can be significant.

A New Dimension of Bogus Self-Employment

So what is the answer for the customer service firm that has few scruples about conditions of work? Our research identifies a new form of bogus self-employment that resolves the problems of diminishing worker commitment.

We label this new form of work relationship neo-villeiny in that it reflects the defining features of medieval villeiny. The medieval villein was a serf, bonded to the landlord and subject to rent in order to work the lord’s land. For this, the villein was guaranteed no income.

In the contemporary work environment, the neo-villein, is exemplified by the fitness industry self-employed personal trainer (SEPT). These workers are bonded to the fitness centre at which they operate because they require access to fitness equipment and, perhaps more importantly, to the members who might become clients.

In order to access fitness centre clients and to use the equipment therein the SEPT must pay a rent (in cash and/or in kind) to the fitness centre. This payment does not guarantee an income, of course, but only the potential to attract clients, thereby generating income.

Free Labour, Free Value

In order to attract clients, the SEPT is best served by engaging in extensive unpaid and speculative work that is highly beneficial to the fitness centre. This includes assisting and advising members and even basic maintenance and cleaning. This is all done in the hope of making a connection with a member who consequently becomes a client.

These activities, while apparently being commercially valuable to the SEPT, invariably benefit the fitness centre. Hey presto, entrepreneurial zeal results in univocal benefit to the firm. In sum, lots of advantages for the fitness centre, not so many for the SEPT.

One of the attractions of self-employment is that it promises autonomy, especially around working hours.  Not so in practice. To succeed, SEPTs must have a presence in the fitness centre. To wit they inevitably work long hours to enhance their presence.

As a result, the fitness centre has a constant and reliable ‘worker’. This resolves the problem of bogus-self employed workers’ commitment while still allowing the fitness centre to claim that SEPTs are genuine self-employed workers in that they have control over when they work. By the fitness centre’s logic, it is simply that they choose to work very long hours.

Time for Action

There are, or course, limitations neo-villeiny in the broader world of work. Our study shows that whereas opportunities for employment as a personal trainer exist, many in the industry see this as a necessary step towards self-employment.

The newly self-employed person can be willingly exploited. Neo-villeiny is an ominous development for those in the service sector whose work is commission based in extremis.

This is a clarion call to government to redouble its efforts to address bogus self-employment. It is that is growing in both prevalence and perversity.

Geraint Harvey is a Senior Lecturer in Industrial Relations and Human Resource Management at the Birmingham Business School, University of Birmingham. Carl Rhodes is a Professor of Organization Studies and the Head of the Management Discipline Group at the University of Technology, Sydney. Sheena Vachhani is a Senior Lecturer in Management at the School of Economics, Finance and Management, University of Bristol. Karen Williams is an Associate Professor at the School of Management, Swansea University.

This article summarizes findings from “Neo-villeiny and the service sector: the case of hyper flexible and precarious work in fitness centres” in Work, Employment and Society.

Image: Liam Matthews via Wikimedia Commons