Employment Rights in Question among the Gig Economy

New research published by the CIPD has revealed that many workers in the gig economy may be eligible for certain employment rights, but are confused by the issue of employment status.

The CIPD’s ‘To gig or not to gig: Stories from the modern economy’ report has revealed that some 1.3 million individuals are engaged in ‘gig work’, and almost two-thirds of them believe that the Government should regulate to guarantee basic employment rights. Only four in ten gig economy workers said that they “felt like their own boss”, which places a significant question mark over the level of control exerted by the end client, and whether these workers are entitled to more employment rights and benefits than they currently receive.

Paul Holcroft, Head of Legal and Advisory, is urging employers to be clear about how they engage with their workers, so as to not contribute to what is already an extremely grey area.

“While the report shows a variety of reasons for individuals taking on gig work, there’s a consistent theme of confusion regarding status. “A lack of confidence or understanding may have prevented workers from questioning their status and rights to much extent, which this report could well change given the collaborative view of gig economy workers.” While the report’s findings present overall mixed feelings among gig economy workers about the provision of employment rights, it was found that half of respondents agree that individuals working in this manner choose to do so for greater flexibility and independence, and in turn sacrifice job security and benefits.

“Employers need to make sure that factors such as control, substitution and mutuality of obligation are all appropriate to, and in line with, the relationship they have with a worker,” Paul advises. “Someone who is engaged on a self-employed basis will generally be able to provide a service in a way which is considerably more autonomous than an employee would.

“Employers cannot engage contractors to cut staff costs, only to treat them as an employee would be treated. If an employer engages an individual on the understanding that they are self-employed, the relationship between the two parties must reflect this, and be clear enough so that no doubt prevails over status, employment rights, or benefits.”

The CIPD report also found that only 25% of gig economy workers say that it is their main job, which suggests that most take on the work to boost their income, as opposed to accounting for their main wage. “The report has made it evident that while we can be correct in the assumption that a majority of workers in the gig economy are purely self-employed, a lot of them are also permanent employees, students, or people simply looking for further income,” Paul comments. “This serves as a reminder for employers that even though someone may be associated with the gig economy, the issue of employment status must still be carefully considered on a case by case basis.”

Peter Cheese, Chief Executive of the CIPD, the professional body for HR and people development, says:

“It is crucial that the Government deals with the issue of employment status before attempting to make sweeping changes, else they risk building foundational changes on shifting sands. “We would like to see a full consultation on the complex issue of employment status, which explores whether it is possible to have greater clarity and consistency on this issue across employment, tax and benefits. “Finally, we need better guidance for employers on atypical working, setting out the key principles of good work and responsible employment and the HR and people management practices that underpins this.” Ascertain your workers' status with our Employment Status Factsheet, click here to download for free.