At the peak of the recession when many businesses made roles redundant or operated on a shorter working week, the phenomena known as the “gig economy” began to take root alongside the traditional pattern of working. The flexible working that the gig economy offered was at first attractive to many individuals who used this method of working to maximise their income and fill the gaps in their working week created by the unstable labour market. For a period of time this new hidden economy rumbled along with relatively low media coverage. However, over recent months we have seen the emergence of discontent amongst a number of those associated with gig economy businesses. This has subsequently resulted in a flurry of employment law tribunal challenges being presented against gig business such as Addison Lee, CitySprint and Deliveroo. Up until now businesses have been able to sit back and watch the scrutiny of these businesses without much concern as to whether their own business practices would withstand a similar critique.

The latest decision about the status of individuals working within the “gig economy” was given by the Employment Appeal Tribunal (EAT) on Friday 10 November. The EAT ruled in favour of the drivers and stated that they are workers and as such are entitled to basic employment law rights. Uber immediately announced their intention to appeal the decision. Clearly they do not intend to simply accept that this is the end of the road for this high tech “app hailing” private minicab business. Consequently, if your business is reliant on technology to increase the people you involve in bringing your business concept to the marketplace. If, you have created an alliance of individuals who are free to run their business within your business. In short it’s likely that you are running a, “gig economy” business and you will need to take action.

What action will I need to take?

In light, of the unsuccessfully defended EAT hearing against Uber businesses will now need to review the working status of any self-employed people who work in close association with your business. Unlike the previous decisions of the Employment Tribunals, this decision is binding. This means that any case that is presented to tribunal now which appears to be based on similar facts or business model to that of Uber is likely to be unsuccessful.

Businesses operating in the gig economy now have to brace themselves for the employment rights and associated additional costs that these “workers” will now be entitled to. In summary the new rights will be:

  • National Minimum Wage
  • Holiday pay
  • Protection against unlawful discrimination
  • The right not to be treated less favourably if they work part-time.
  • Protection against unlawful deductions from wages
  • Rest breaks
  • The right not to work more than 48 hours per week
  • Protection against unlawful discrimination
  • Protection from suffering any detriment after reporting any issue relating to wrongdoing in the workplace i.e. “whilstleblowing”.
  • The right not to be treated less favourably if they work part-time hours.
  • They may also be entitled to sick pay and family friendly rights such as maternity leave

Twist in circumstances

Given that Uber has indicated they intend to appeal the EAT decision, there is still a possibility that the Court of Appeal may take a different view of whether the drivers should be classed as “workers”.  The possibility of this happening is more than negligible as there now seems to be a small pocket of support favouring the idea that individuals working under the “gig economy” banner may actually be self-employed as opposed to employed.

That support came from the Central Arbitration Committee on 14 November, when the committee decided to decline a collective bargaining recognition application made by the Independent Workers’ Union of Great Britain. The application was rejected on the basis that the Deliveroo riders who the Union had suggested were workers’ were not workers’ but self-employed individuals. Whilst, this decision does not overturn the EAT judgement it does, however, open up once again the whole debate as to whether it is possible for individuals working in a “gig economy” businesses to be truly self-employed. Hopefully, the Court of Appeal will take a fresh look at the situation but until then as stated earlier the EAT decision represent the current legal position.

If you require further advice on business law matters, you may wish to join our community; on elXtr we have guides and documents to help you navigate everyday business issues, including employment and health and safety issues.

If you have access to the legal helpline and want to discuss your specific circumstances with a qualified solicitor or barrister, please get in touch with them.

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