Alan Price: MPs publish “unintelligible” gig economy contracts

The Work and Pensions Committee has published contracts from Uber, Deliveroo and Amazon as part of its review in to the gig economy, with one MP calling the Uber contract “gibberish”.

The gig economy has encouraged an increase in businesses which provide work to individuals, often through technology and smartphone apps, where they are paid a set price per “gig”, or piece of work. These individuals are generally classed as self-employed contractors in their contracts with the business, however this does not always tell the whole story.

Employers should be aware that labelling someone as self-employed in their contract will not necessarily bind an employment tribunal when they are later examining this. A tribunal will look beyond the contract at the time it is agreed and at any later stage of the business relationship to examine what actually happens in reality, following the Supreme Court decision in the Autoclenz case. For example, if the contract says that the individual is self-employed because they can turn down work when this is offered to them but this has never happened in practice, or the individual is disciplined for turning work down, then the tribunal will look at the practical reality of whether there is mutuality of obligation to offer and accept work.

This has been the case in many of the gig economy claims that have passed through tribunals in recent months. In Dewhurst v CitySprint UK Ltd, the contract classed couriers as ‘self-employed contractors’ and gave them a right to substitute someone else to do the work; one of the main self-employed tests. However, the tribunal found that the couriers could not, in reality, substitute another because there were further requirements placed on substitution including that the substitute had to have the required insurance cover, knowledge, skills and ability to satisfy the company that they were competent. This made the opportunity to substitute so small that it could not actually happen.

Gig economy workers that are truly self-employed have no employment rights, except in relation to protection from discrimination in certain circumstances. Those who are found to be workers are entitled to some employment rights but not all. Workers have the right to minimum rest periods and breaks, paid holiday, national minimum and living wage, and the right to be auto enrolled in a pension scheme.  Gig economy employees will gain all employment rights; some from the first day of work, i.e. protection under TUPE, maternity leave, statutory sick pay, whereas others have a minimum service requirement such as the right to not be unfairly dismissed after two years’ service.

About Alan Price

Alan Price is Employment Law and HR Director at Peninsula.
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