Ben Daniel: “Gig economy” review should provide clarity for workers and employers

Ben Daniel, Partner at Weightmans LLP says the Government’s panel should look to make the legal designations of employment clear, but not at the cost of flexible employment models   

Last week the Government’s review into the changing face of Britain’s labour market kicks off in earnest. The panel, appointed in October and led by Tony Blair’s ex-policy chief, Matthew Taylor, will take a whistle stop tour of the UK, starting at Google’s offices in London, before visiting Belfast, Cardiff, Maidstone, Nottingham and Glasgow.

Mr Taylor and his team will speak to businesses, employment experts and workers to assess whether current regulations and employment practices are keeping pace with the changing world of work.

It is expected the panel will conclude that more needs to be done to help workers who are improperly classified as self-employed, or engaged in zero-hour contracts, secure rights such as holiday pay, national minimum wage and pensions and help businesses have a more certain understanding of their relationship with those workers.

The review has been prompted by ongoing discussions over the flexible employment models associated with businesses like Uber and Deliveroo operating in Britain’s “Gig-economy”. Its rapid expansion has seen an unprecedented increase in people working in non-traditional employment. In many cases, some workers are being denied a fair deal, but the Government should avoid mounting a wholesale attack on employers.

There is a strong demand for this kind of employment. Zero hour contracts and casual work can give students, retirees and parents more control over their hours and help small businesses cope with fluctuations in demand.

What the review can tackle is the inherent unfairness in some of these relationships by providing greater clarity on employment designations for the benefit of workers and businesses alike.

Some of the most heated debate has centred on the rights of those labelled as self-employed contractors – like Uber drivers. At the moment, if an individual is classified as self-employed, they are not entitled to the benefits enjoyed by full time employees or workers.

A string of high profile cases has challenged this, highlighting the need for greater legal clarity on the designated status of many engaged within the Gig Economy. Most recently, an independent contractor engaged by Pimlico Plumbers for over 6 years was found by the Court to be a worker and won the right to holiday and sick pay.

The crux of the issue in simple terms is this: if a company exerts the same level of control on an independent contractor as it does on its permanent staff, and also requires personal service from that individual, the contractor is unlikely to be considered self-employed, particularly when they have become integrated into the business without receiving the corresponding, legally entitled, benefits of employee or worker status.

Enterprises like Deliveroo, Uber and CitySprint have all been accused of building workforces made up of supposedly self-employed contractors, who have been found to be restricted by their arrangement with these businesses. They are often unable to explore other avenues of work.  Workers from CitySprint and Uber have both recently won the right to holiday pay and minimum wage by proving they were, in effect, under the employers’ control and required to provide personal service.

For now, proving employment or worker status is the responsibility of the individual. It is possible that the panel’s recommendations will be to shift the burden of proof onto employers. Mr Taylor’s team is considering a new online tool that would let individuals determine their true employment status by answering a selection of questions.  The results of the test could be regarded as a strong indicator of the correct legal status and an employer could then have to go to an employment tribunal to dispute that status.

Access to such a view on employment/worker status would tend to give individuals more clout when agreeing the terms of their relationship with an employer, or if they felt their existing arrangement had become unfair. It could also better focus the minds of employers when initially setting up their business models.

The best way to truly move forward and avoid continuous litigation is to establish new, solid guidelines that give a clear picture of an individual’s correct status. The question marks over current definitions mean they are often not fit for purpose in today’s flexible labour market.

Both parties, individual and employer, want as much clarity as possible to ensure everyone is getting a fair (and flexible) deal. So, it is hoped that Mr Taylor’s panel consults with and takes in the views of as wide a range of bodies as possible, so the evolving concept of the “gig-economy” is allowed to move in the right direction.

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