The Gig Economy

The gig economy- is the law up to date with technology?

The gig economy (think Deliveroo, Uber and City Sprint) is effectively a labour market whereby short-term contracts are used for people to sell their labour, rather than permanent jobs.

Individuals are paid per “gig” completed, and this type of working has been touted as particularly appealing to young people. The use of current technology makes it. At least, that was the theory.
You would be hard pressed to have missed the recent Uber case, whereby an Employment Tribunal ruled that two drivers were workers, rather than self-employed. As workers, Uber drivers are therefore entitled to basic employment rights, including to holiday, for national minimum wage and for statutory paid rest breaks. Uber have confirmed that they will be appealing this decision to the Employment Appeal Tribunal, the “next Court up”.

In a world where we can order anything from dinner to dry-cleaning via an app, is it the case that the flexibility in worker status is needed? The often-praised flexibility of the gig economy is that is offers people independence. Many Uber or Deliveroo drivers work alongside other commitments. A second job, study or family. Certainly, those Uber drivers that I have spoken with do not want the tie of enforced hours: they want to be able to switch on the app as and when they can, and turn it off if they want to get back home in time for Bake Off.

The flip side, as always, is that protection is needed for those in this sector. An estimated 5 million people in the UK work in the gig economy. Without any workplace protection, there is always a risk of exploitation.

Recently, Matthew Taylor’s Review of Modern Working Practices recommends a clearer test for worker status. He recommends the introduction of a new class of workers, “dependant contractors”, which would likely encompass those in the gig economy. These individuals would be given basic employment rights, such as the right to minimum wage. However, working time would need to be calculated fairly. The Taylor Review recommends that the Government adapts current laws, allowing those working in the gig economy to be compensated based on their output, for example the number of jobs completed. This would mean that “dependent contractors” would not be paid national minimum wage for each hour logged on an app when there is no work available (as suggested in the Uber case).

The Central London Employment Tribunal has recently ruled that three Addison Lee drivers should be considered workers. Addison Lee are likely to appeal the decision. However, it does seem that the Tribunals are taking a much stricter approach to worker status. The implications of any appeal decision could result in the flexibility and independence of the gig economy being lost.

With the potential added complications of Brexit, it remains to be seen how the Government will approach the current challenges and need for reform in UK employment law, however recent case law and the Taylor Review provide interesting food for thought. One thing is clear though, that current legislation is not equipped to deal with our ever-developing labour market.

Jessica Bass is an Associate Solicitor at Curzon Green Solicitors, based in High Wycombe and the City of London. Jessica specialises in Employment Law and Dispute Resolution. Away from work, she is a lover of travel, food and gin. Find Jessica on LinkedIn here.