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The gig economy and a perfect storm of unfairness in employment law

The Law Society has recently responded to the BEIS inquiry into the future world of work and the rights of workers in the gig economy.

The response recognises that uncertainty in legal concepts around employment status simply leads to uncertainty over employment rights. This greyness has allowed certain businesses to not view themselves as employers and to deny basic employment rights to their workforce.

Denial of rights

Individuals are being denied these rights at a time when it is more difficult than ever before to enforce employment rights following the introduction of Employment Tribunal fees. The gig economy is creating a perfect storm of unfairness in employment.

The Law Society response makes a case for a default legal position for employment status like in the US where if there is a disagreement about the status of a worker it would be the responsibility of the employer to take the matter to court. This has its attractions in a world where using online platforms to connect individuals with customers is creating ambiguities about employment status.

Impact on couriers, fast food deliverers and other workers

First off it was the couriers and fast-food delivery companies in the headlines but the implications of the recent cases against Uber, Deliveroo and CitySprint are likely to stretch far wider. Many businesses could find themselves owing much more to their workers than they had in mind by way of holiday pay and national minimum wage.

Whilst the champions of flexible working will continue to shout loudly about what they see as the upsides of the way in which companies like Uber operate, the reality is that the Employment Tribunal in that case pointed to “fictions” and “twisted language” in employment documentation. In other words, it was unimpressed by companies calling something by a different name to get round providing employment rights. Uber’s argument that it does not do much more than connect passengers with drivers did not sit happily with the Tribunal’s findings that setting routes and imposing conditions on drivers goes a lot further.

Perhaps not surprisingly, Deliveroo’s inclusion of clauses in contracts preventing staff from enforcing their rights did not work either. It is a worry through that some of their workforce may have thought that they did. Time for change.

Who controls your working hours?

There are now serious questions being asked about whether working for different employers for however many hours is really living the dream where employment rights do not exist and the reality is that many of these workers are under the control of the company even if the paperwork tries to paint a different picture.

Control is a distinguishing feature when working out employment status. The think tank, Social Market Foundation, has produced research which found that one in five self-employed contractors do not have much autonomy over their job and one in three do not have much autonomy over their working hours. Being controlled but having few rights makes no sense.

No two cases will be the same though. It was very relevant in the Uber case that the drivers could not “substitute” another driver to provide the service. Where this is a possibility there is less control, more flexibility and arguably a better deal if you are trading in rights.

The Social Market Foundation has suggested options aimed at bringing about change such as reducing the financial incentive to avoid employment (paying national insurance contributions is unpopular in other words). Automatic worker rights to low-paid workers is another option.

Whilst we await appeals in the courts and potential changes to the law, it is clear that this is the hottest topic in employment law as we kick off 2017.