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The ‘gig economy’: Where are we now?

The so-called ‘gig economy’ is a term used to describe a labour market where workers are paid for each ‘gig’ or piece of work they do. They are engaged to work on self-employed, flexible terms, apparently with little commitment, which allow them to work when they want. Trade Unions and workers’ groups argue that the reality is very different: individuals are exploited and are not properly compensated for their work.

A number of high-profile legal cases involving household names such as Uber and Deliveroo have highlighted the rights of those who work in the gig economy. Most recently, in Addison Lee v Gascoigne, the Court of Appeal refused to grant permission for courier and taxi service company Addison Lee to appeal the decision of the Employment Appeal Tribunal where it held that its courier riders and drivers were workers – and therefore entitled to basic employment related rights such as holiday pay and the national minimum wage. It is estimated that Addison Lee faces a multi-million-pound bill for monies owed to its workers and will also now have to wrestle with a workforce who enjoy important statutory protections.

This setback for Addison Lee follows another recent gig economy case judgment in Pimlico Plumbers v Smith. In Pimlico, there had been several years of litigation which ultimately reached the Supreme Court in 2018.  The Court upheld previous judgments that Mr Smith was a worker engaged by Pimlico and was therefore entitled to basic employment rights such as holiday pay and national minimum wage. However, that is not the end of this particular case. Having established that he was a worker, it was left to the Employment Tribunal to decide whether Mr Smith was entitled to any holiday pay. The Tribunal found that Mr Smith had not made his claim within the relevant timescale and declined to award him any holiday pay. Given that this case has been ongoing for over seven years, it is likely that the appeal courts will be seeing Mr Smith again.

Employers need to be particularly mindful of their working arrangements given relatively recent changes in UK law following the publication of the Good Work Plan in late 2018.¬† The Good Work Plan was the Government’s response to the Taylor Review on modern working practices and the shift to more flexible working arrangements by both employers and employees. In particular, employers must now provide workers with itemised pay-slips as well as employees. Pay-slips must now state the number of hours that the individual is being paid for; further changes to the law are likely to follow next year.

The EU is getting in on the act too. The European Parliament has recently passed new rules with the emphasis on providing protection for what the European Parliament describes as ‘the most vulnerable employees on atypical contracts and in non-standard jobs’.

In an attempt to improve working conditions and transparency, the European rules seek to introduce clarity on terms and conditions from day one together with the concept of compensating atypical or gig workers for cancelled work assignments. Compensation for cancelled work is a significant development for zero-hour workers following reports that they attend work only to be told that there is no work available for them on that day.

For UK employers, the key issue with these new rules is whether they will ever be required to implement them given the current Brexit state of flux. Whilst the UK appears to have led on reform for gig workers, the European approach does reach a little further than the UK changes. We should know more later this year.

Comment

Gig economy cases are a reminder to employers to review their working arrangements on a regular basis to ensure that they are staying within the letter of the law. For individuals, it is a reminder that they may have more legal protection than they first thought.

For further help and advice on the gig economy, or any other employment issues, please get in touch with Nick Wilson and our employment team by calling (01904) 275250 or emailing enquiries@andrewjackson.co.uk

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