31 October 2016
The ‘Gig’ Economy And The “Uber-isation” of Employment
The tribunal decision in the Uber case has everyone talking about the ‘gig’ economy and what this means for almost 5 million individuals across the UK.
What is The ‘Gig’ Economy?
The ‘gig’ economy is a term used to describe casual work undertaken on a piecemeal basis, such as being an Uber driver or delivery driver. Latest statistics report that a record number of people – 4.79 million – are self-employed, with 1.66 million of these people employed on a temporary basis.
The growth in the gig economy has led to the Commons Select Committee on Business, Energy and Industrial Strategy launching an inquiry into the future world of work.
The inquiry will focus on the fast changing nature of work, and the status and rights of agency workers, the self-employed, and those working in the 'gig’ economy.
Questions that will be considered include the definition of ‘worker’ as well as wider employment status.
The employment status of individuals who do ‘gig’ work is in many cases unclear. Should these individuals be considered to be workers, employees or self -employed?
Determining status is crucial as it determines what employment rights and protections they have. This includes protection against unfair dismissal, national minimum wage, holidays or sick pay. Only employees can bring a claim for unfair dismissal but workers also have valuable statutory rights.
At present, many organisations benefiting from ‘gig’ work argue that individuals who carry out the work are self-employed and have none of the rights of employees or workers; however, this has been challenged in the Uber case and will continue to be challenged.
In the much anticipated employment tribunal case of Aslam, Farrar and others v Uber it was found that that drivers providing services to Uber are 'workers' within the meaning of the Employment Rights Act 1996.
This entitles those drivers to a number of important employment rights, such as the national minimum wage, 5.6 weeks' paid annual leave each year, a maximum 48 hour average working week and rest breaks. Uber drivers being classified as workers, also provides them with valuable protection under UK law, including whistleblowing protection.
Given the significant impact of this decision, it is very likely it will be appealed by Uber. How this develops and what impact it has on other ‘gig’ companies is yet to be seen.
We hope employers will ‘get in the driving seat’ and start reviewing their employment relationships now. Individuals who are central to delivery of an organisation’s business should be given the basic and important rights to which they are entitled without the need for an Employment Tribunal Judge to intervene.
Theo Nicou is an employment solicitor at Slater and Gordon Lawyers in London.
Slater and Gordon employment solicitors provide legal advice on employment law issues. You can call us on freephone 0800 916 9060 or contact us online.