Gig, going, gone?

Could the “gig economy” be on its way out, just as we’re getting used to the terminology? 

Businesses seeking to use responsive mobile apps also want a workforce to work as flexibly as possible.  This type of working arrangement has found favour with many who like the idea of working in a more flexible manner.  However, the arrangements are proving less popular with the Employment Tribunals.

Firstly, an Employment Tribunal decided in October 2016 that an Uber driver was not self-employed, but was a worker, giving rise to basic rights such as holiday pay and the National Minimum Wage. Now, another Tribunal has concluded that a cycle courier engaged under a self-employed contract for CitySprint also fell into the category of “worker”.  While workers don’t benefit from the full range of employment law rights, their right to claim backdated holiday pay for up to 2 years could have serious implications for other businesses in this space.

These two cases don’t automatically mean that all those working in the gig-economy will have formal status as a worker.  But with the Tribunal giving short shrift to attempts made by lawyers to ‘window dress’ arrangements to try to protect their clients, and a few high profile cases waiting in the wings, we have certainly not heard the last of this issue.

Further, the government has launched the Modern Employment Practices review to consider these issues and we expect their report around the end of May.  The fact that tax revenues from casual workers and the self-employed are lower than for those with a more regulated working arrangement, will mean this is an area of focus for that review and could well be a catalyst for change.

We will continue to monitor developments in this area and report back in future briefings but if your business is looking to introduce a more flexible working schedule to respond to business needs, or you are concerned about the legal status of elements of your workforce, please do not hesitate to get in touch with us: / 01904 520160.