Government must Handle Gig Economy Flaws Before it's too Late


23 May 2017


With the media continuing to cast a keen spotlight on the rights of workers’ in the Gig Economy, cases involving the topic have hit many headlines recently. It is estimated that five million people operate as workers in the UK’s blossoming gig economy, with renowned app-based companies, such as Uber and Citysprint, attracting the attention of the media for their staff’s status. Most recently, representatives for Deliveroo have fuelled the fire by pledging to gain Union recognition and establish worker status. As well as these high profile cases, the Court of Appeal has recently handed down its judgement in Pimlico Plumbers ltd v Smith,  confirming that a long-serving plumber was a worker and as such, entitled fundamental rights such as minimum wage and paid annual leave. This trend of workers being paid for each job - or “gig” - that they do, brings with it an air of independence and flexibility. However, the gig culture is made up of many juxtapositions; Companies have a relatively low cost workforce at their disposal who are ready and willing to work, but are under no obligation to accept work that is offered. A lack of stability and security for individuals operating in this manner has been one of the primary reasons for the attention cast towards the gig economy lately. The public have been sympathetic to the individuals who deliver the services, and seemingly feel that these well-known companies are exploiting a loophole in the labour market. These cases share some similar traits, including;

  • The fact that the workers themselves are often taken on under convoluted contractual terms;
  • Questions over whether the company can be considered a client of the individual or, in contrast, whether an individual is integral to the operations of the Company, and;
  • Whether there is a general expectation that the individual concerned is expected to provide personal service, without substitutes.

A review by the Tribunals has set out an intention of looking at the legal obligations of both parties to the agreement. It has also been reiterated that the written document itself, or contract, often only illustrates part of a much bigger picture. In the high-profile Uber case, the Tribunals found little to support the “faintly ridiculous” idea that these individuals were self-employed. Uber were criticised for the “twisty” terminology, and the Tribunal concluded that the terms “bore no relation to reality”. In Pimlico Plumbers, the Court of Appeal could not convey the protection of the Employment Rights Act 1996 because the relationship was not reflective of a contract of employment. The cumulative effect of these cases has been to impose worker status on the companies who wish to take advantage of the modern changes in freelance working practices, even though they fall short of attaching full employment rights, such as the right to claim unfair dismissal or redundancy pay. Amanda Beattie, Croner Litigation Expert, says: “The workers at the heart of these cases are now able to claim national minimum wage for the time they are working and on standby. Given the nature of the work in some cases, for example Uber drivers, the multinational corporates affected by the ruling are displeased that, for the time work is being undertaken, the workers are being paid. As such, there is little doubt that this ongoing uncertainty will remain for the short term. “Where the future is heading, no one know for sure. “However, the Department for Business, Innovation and Skills have responded to the air of uncertainty surrounding the growing gig culture by publishing an “Employment status review”, and have undertaken an independent review (known as the Taylor Review) looking into these employment practices in the modern economy. “In an effort to avoid bad press, there is no doubt that the Government will want to plug any holes before they grow too large to manage.”

Do you have any questions?

Get a free callback from one of our regional experts today