Employment Rights in the Gig Economy
According to research conducted by the University of Hertfordshire, and data collected by BritainThinks, over 4 million individuals in England and Wales are working for platforms in the ‘gig’ economy at least once a week. Characterised by its prevalence of short-term contracts and freelance work, this labour market thrives for employers who seek to keep staffing costs low.However, the detrimental effects of this objective leaves workers to operate in a rather unstable environment.
The gig economy encompasses work alike to taxi driving, deliveries, cleaning and household repair services, utilised by a workforce who largely aims to supplement other forms of income. The benefit of working when one wishes is an appealing aspect of the job, especially where we are in a current climate of unpredictability and tasks are constantly awaiting completion for the gig workforce to undertake. Through utilising the demand for ‘gigs’ and eager individuals with a desire to earn money easily, the platforms that connect the worker to odd jobs have a lucrative business model that keeps employment costs low. Without the need for maintaining a workplace and instead allowing workers to operate wherever suits them, the cost-effectiveness of connecting gig workers to gig work is a huge advantage for employers. Despite the flexibility and independence of workers appearing to be a comforting aspect of operating within this labour market, it has allowed employers to distance themselves from the role and circumvent various employment rights. For instance, receiving the national minimum wage and statutory sick pay. Furthermore, the minimal obligation to work poses important legal questions surrounding the status of those who undertake work in the gig economy, particularly as rights are not afforded to those who are deemed ‘self-employed’.
In order to create a flexible and dynamic labour market,the UK has a ‘3-tiered’ employment status framework, drawing a distinction between ‘employees’, ‘workers’ and the ‘self-employed’. But unfortunately these categories have caused ambiguity for those in the gig economy. As a ‘gig’ worker, the idea is that an individual is paid per ‘gig’ they perform, such as a taxi ride or an ‘odd job’, however services similar to Fiverr, whereby a platform dictates the employment’s terms and conditions, have come under fire for treating people as independent contractors who work for themselves.
This uncertainty was challenged by Uber drivers in the Supreme Court last year. The case revolved around whether Uber drivers were ‘workers’ for Uber or ‘self-employed’ due to the nature of their work, affecting their employment rights and statutory protection. It was unanimously ruled that they were indeed ‘workers’ as their service could not be provided without the Uber platform due to drivers being ‘subordinate and dependent’ on the company
This was a landmark decision for those working in the gig economy, allowing workers to challenge their treatment and ensure companies within this labour market adapt their business-models to meet certain legal standards. Although this decision has provided clarity, the ever-changing nature of the employment landscape and demands from both parties to allow flexibility is likely to continue to cause further issues on fair working conditions and the certainty of one’s employment status.
Earlier this year, in July the government released new guidance in an attempt to clarify employment status for workers and businesses, this outlined to ‘act as a one-stop-shop’ for the matter. The guidance contains case law put into one place so that workers can improve their understanding of rights entitlement and take the necessary steps to achieve core employment protections. However, the guidance has not escaped criticism and crucially there is a lack of legislative reform required in order to gain the recognition that the guidance is in desperate need of. Noted by Shazia Imtiaz, general counsel at the Association of Professional Staffing Companies, the government’s 2018 Good Work Plan was evidently drawn on and the advice on employment status was ‘certainly welcome’ by the new guidance, ‘however the response… is missing the legislative changes that we had hoped for’. In particular, the legal and tax positions of individuals remain rather foggy, the ‘worker status’ is not accounted for in statutory provisions regarding tax and effectively rules out the alignment of tax status with employment status for the foreseeable future.
