The ‘gig’ economy – where are we now?
If you have had a takeaway delivered, or organised a private cab to give you a lift somewhere, you will have experienced the “gig” economy.
According to the Chartered Institute for Professional Development, roughly 1.3 million people in the UK now work in the gig economy, where instead of a regular wage, workers get paid for the “gigs” they do, such as delivering services or giving lifts by car.
Companies such as Deliveroo and Uber often treat their couriers and drivers as self-employed, although it’s clear that they have an ongoing relationship with their employer. The companies concerned are quick to point out that many workers enjoy the flexibility that this type of work gives them. Employers certainly benefit in several ways – they save on National Insurance, and in some instances, avoid paying the minimum wage, holiday pay and sick pay.
Work and Pensions Committee report
The government and unions have raised concerns about the rise in the gig economy, focusing on the erosion of the working rights of the individual, and their ability to enforce those rights. In 2016, the committee published a report that pointed out that the provision of flexible working didn’t automatically mean that workers had to be self-employed.
The committee’s report concluded that the real reason for employing people in what it termed as “bogus” self-employments was profit, not flexibility. Describing these workers as self-employed avoided them gaining the legal rights that go with “worker” status.
Recent case decisions
The courier company, Addison Lee, has become the latest gig employer to face defeat in court. It had treated its workers as “independent contractors” which meant they didn’t have a right to holiday pay or the national minimum wage.
The employment judge ruled that the firm had unlawfully failed to pay one of its cycle couriers holiday pay, and had some strong words of condemnation for the company’s attempt to “frighten off” the courier from challenging his employment status.
He had been asked to sign a contract that stated: “You agree that you are an independent contractor and that nothing in this agreement shall render you an employee, worker, agent or partner of Addison Lee.” It also went on to say that he should “indemnify Addison Lee against any liability for any employment-related claim or any claim based on worker status brought by you.” This the judge said, “suggested they knew the risk of portraying the claimant as self-employed”.
The judge’s finding that he should be classed as a “worker” follows several similar verdicts brought against Uber, City Sprint, Excel and eCourier.
Taylor review recommendations
This review into modern working practices undertaken by Matthew Taylor on behalf of the government proposes bringing in a new law that any self-employed worker under “control” or “supervision” from their contracting company should be classed as a “dependent contractor” and receive the minimum wage, holiday pay and sick pay.
It also advocates introducing a mechanism whereby workers could have their employment status determined without going to tribunal, shifting the burden of proving their status onto the company hiring them.
There were also recommendations that those who had been employed on zero-hours contracts for 12 months or longer should be able to request fixed hours from their employer that better reflect the hours they have actually been working. Agency workers who have been placed with the same hirer for at least 12 months could, if the proposals are accepted, request a direct contract of employment.
It remains to be seen whether the government will implement the review’s recommendations. We will be taking a keen interest in how the employment law landscape develops and what this means both for individuals and employers.
In the meantime, it can be difficult for employers who employ staff on atypical working arrangements to know how to frame their contracts of employment.
How we can help
If you would like some practical advice on employment issues, then do get in touch. Email Monika Ostros to arrange a confidential discussion of your situation.