The Gig Economy: Where are we now?

Written by: Reiss Palmer, Runner-up of the Commercial Awareness Essay Competition 2017/18

The gig economy is a working style that has recently been making the headlines and has divided public opinion. The “gig-economy” refers to a style of working whereby a company employs an individual – a “gigger” – to work for them on individual tasks, known as “gigs”. The gigger is paid for the individual gigs, and theoretically has the freedom to work as many or as few gigs as they please. Prime examples of this type of work include drivers for companies such as Uber and Deliveroo.

However, these companies have been plagued with an important issue the past few months – the employment status of their drivers. These companies have been fighting the case that their drivers are only self-employed persons, doing individual gigs through the platform of their respective apps, and not employees of that company.

This is because under UK law, the status of a working person is subject to differing legal rights. There are three bands into which an individual can be categorised: an employee, a worker or self-employed. With those that fall into the “employee” or “worker” band having more legal rights than that of a self-employed person.

It has been argued that this type of work provides flexibility to workers, as they are free to choose when, where and for how long they are going to work on a given day. This can be an ideal work model for students or stay-at-home parents who have arbitrary snippets of time in their days when they are available to work, or retirees who only want to work 2-3 hours once or twice a week. They are not obliged to commit to a minimum amount of hours worked a week and can pause their work commitments when exam deadlines loom or when half-term is around the corner. Smaller companies can benefit too, as they are not inundated with obligations to provide work and a salary when there is no work available.

Conversely, it has been argued that this working style is being abused by larger companies. By suggesting that giggers are self-employed, this permits companies to withdraw from providing some of the benefits that an employee would be entitled to, such as holiday pay, sick pay, national minimum wage and the right to protection from unfair dismissal. Companies also can avoid paying national insurance contributions, which, according to research conducted by the Trade Unions Congress, is contributing to billions lost in tax revenue every year.

How have the courts dealt with this so far? There are currently three key cases concerning this issue. Focusing primarily on the amount of control exercised over their drivers, the Employment Tribunal held Uber’s drivers to have “workers” status. This will be a hefty financial blow to Uber, costing them over £13 million per annum in holiday pay. In contrast, the Central Arbitration Committee held that Deliveroo drivers are self-employed. A success for Deliveroo by side-stepping the financial ramifications of “workers” status.

The Pimlico Plumbers case is the highest authority for workers status and is to be heard at the Supreme Court in February, 2018. Uber’s appeal to leap frog the Court of Appeal and be heard together with the Pimlico Plumbers case has been denied. The case is distinguishable from the Uber and Deliveroo cases on the ground that it concerns a highly skilled, well-paid plumber rather than a low-paid, “unskilled” driver being exploited by devious companies. Nonetheless, it’s ruling should provide clarity on a current legal hot topic that isn’t Brexit or POTUS.

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