Workers’ rights and the gig economy

4 July 2017

The rise of the gig economy has been meteoric in recent years. It has given rise to a string of recent employment tribunal decisions – Uber, CitySprint, Pimlico Plumbers (and soon, Deliveroo). In each case, it was found that the companies had been effectively denying proper rights, such as sick pay and holiday entitlements, to their workers (whom they hold out to be “self-employed”).

When these cases appear, they receive a considerable amount of attention in the press. It is rare that the nuances of employment law capture the public’s imagination in this way, let alone for them to become quite as politically charged as the issues around workers’ rights in the gig economy have.

So how is the Government responding?

Matthew Taylor was commissioned by the Prime Minister to carry out an independent review of how employment practices can be adapted to take account of the rapid technological advances which have transformed work in the modern economy. According to the Government’s website:

“The review will consider the implications of new forms of work, driven by digital platforms, for employee rights and responsibilities, employer freedoms and obligations, and our existing regulatory framework surrounding employment.”

He has not yet reported, but he gave some tantalising hints of his direction of travel in a speech to a conference hosted by the Trades Union Congress:

  • He cited research indicating that between two-thirds and three-quarters of gig economy workers were happy with their form of work. He also stated that the flexibility of the British job market was envied by other developed economies.
  • That statistic seems to inform his view that an outright ban on flexible arrangements, e.g. zero hours contracts, will not be recommended by the report. This is something which unions had hoped for in order to curb exploitation of workers.
  • However, he did suggest that he would recommend action to cut down on one-way flexibility and the “unhealthy master/servant” dynamic, by which workers feel compelled to be constantly available for work which they may not actually receive.
  • Unsurprisingly, he is likely to recommend clearer legal distinctions between the three statuses of employee, worker and self-employed.
  • He may also make recommendations to improve the tax system (this currently relies on a binary distinction between employment and self-employment, which can lead to confusion and, as the TUC suggests, significant lost tax revenue).

There have been many occasions on which the Government has made promises about enhancing workers’ rights in the light of the report’s findings. For example, see the Prime Minister’s Lancaster House speech, the Brexit White Paper and the Conservative Manifesto, among others. However, with the current political uncertainty and the priority being given to Brexit negotiations, it remains to be seen whether the Taylor recommendations when they arrive, and the promises made in recent months, will lead to any prompt legislative action.

The full Taylor report is expected imminently and we will report again on the details once it is available.

Further information

For more information on the issues raised in this blog, please contact a member of our employment team.

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