In the UK the number of self-employed workers has risen to nearly five million, approaching the number of people who work in the public sector. And it’s growing fast. In 2014 the size of the market for gig economy platforms and related services was estimated globally at $10bn and according to PWC, it’s predicted to be worth $64bn by 2020.
Ernst & Young’s survey on the sector found that key reasons cited by firms for favouring contingent arrangements include:
- Bringing in expertise beyond that available in their existing workforce.
- Controlling labour costs.
- Helping to overcome resistance to change.
- Helping to cope with peaks in supply and demand.
Whilst it’s regularly reported that those who are working as self-employed often choose that arrangement and enjoy the autonomy it offers, that is not true for all.
One in five of the self-employed report that they do not have autonomy over their job tasks and one in three report that they do not have autonomy over their hours.
Self-employed people are less likely to be paid for additional hours they work, to receive training, to take sick days when sick (because they receive no pay for them) and to be saving from their income.
Workers without autonomy hold positions which look more like employment, but without the protection and opportunities permanent employees would have available to them.
A NatCen survey on British social attitudes to work found that 92 per cent of self-employed workers thought that job security was important but only 65 per cent felt that their job was secure and 15 per cent said their job was insecure.
‘Gig economy’ type working arrangements are perfectly satisfactory for some, particularly professional, managerial and/or highly skilled individuals. However, there is clearly a significant proportion of self-employed workers who want more job security and find these arrangements fail to provide them with sufficient protection.
This issue has been bubbling under the surface for some time, but the victory of the Uber drivers has brought it to the forefront of the news agenda.
The employment tribunal in the Uber case thought it was clear that the drivers were “workers”, which gives them more rights and protections than those who are purely self-employed. The employment tribunal did not suggest that the legislation, which defines what a worker is, was inadequate. The tribunal just looked at the reality of the arrangement between Uber and their drivers and the level of control exercised by Uber.
Worker status is not the same as finding that they were employees, which the drivers didn’t argue.
Worker status is something less than employee status but which gives them basic protection in their jobs – the right to receive paid holiday, the right to receive the national minimum wage, protection when whistleblowing and against discrimination and from unlawful deductions being made from their wages. For more information read our blog: Am I an Employee? What Does This Mean?
Whilst Uber had sought to argue that each driver was an independent business, putting in place convoluted contractual documentation to try and back that up, the Tribunal found that that was “ridiculous” as a concept and, looking at the reality of the working arrangement, found that the level of control Uber exercised over the way each driver did their work pointed to a worker relationship. Uber has said it will appeal but I would be surprised if their appeal succeeds.
Is The Uber Decision Really That Controversial?
In the UK, we have a set of legal rights that protect those who aren’t genuinely self-employed but who aren’t employees either – worker status.
It includes those who are appointed to do work personally but who are not in a customer/consumer relationship.
Minimum wage exists to ensure a basic quality standard of living for everybody who works. So is it too much to ask that Uber drivers get at least minimum wage?
Paid holiday was introduced for health and safety reasons to ensure workers are suitably rested. So shouldn’t Uber drivers get paid holiday leave too?
Discrimination and whistleblowing claims ought to be rare because drivers rarely come into contact with each other. However, if discrimination or detrimental treatment does take place after whistleblowing, I think most people would agree that individuals should be able to make a claim, particularly because those claims could be in the public interest if they relate to passenger safety.
So arguably, more needs to be done to call out organisations who are flouting the rules to try and avoid “worker” status for staff.
The Impact of The Uber Case on The ‘Gig Economy’
Many similar businesses already acknowledge that its staff are workers and grant them corresponding rights. It is hoped that as a result of the awareness and momentum created by the Uber decision, more claims will be lodged in the Employment Tribunal demanding worker rights and even better, more employers will simply acknowledge worker status without the need for workers to have to take their claim to the Employment Tribunal to prove their case.
Since the Uber decision, there has been an upturn in union recruitment, at least in drivers sectors. Collective bargaining is useful for those arguing for worker’s rights.
Use of collective bargaining could even result in standard terms for those working in platform businesses and in other sectors. Deliveroo seems to be one of the first to publicly be facing a request for union recognition and that union has promised a battle before the Employment Tribunal if their request is refused.
Those in the higher paid sectors, where there is genuine autonomy, are unlikely to sign up to unions or to assert their rights to seek collective bargaining. However, those in lower paid positions with less autonomy over how they do their work are more likely to want that basic protection and are the ones who are likely to seek union membership and the protection that can offer. Without collective bargaining, the concern is that Uber and similar operators just look for other ways to get around the ruling.
The Government Review
Theresa May has now appointed Matthew Taylor to lead a review into employment practices in the modern economy and to consider whether the government could do more to protect non-standard workers.
Matthew Taylor acknowledges that for many these kinds of arrangements work perfectly well, but that there are others for whom they don’t. He is starting his review by commencing a tour of the country to speak to workers across all sectors with non-standard contracts and will report back in 2017.
There is no easy answer to what the government might do, but at the very least, this spotlight will focus the debate on how the current grey areas can be resolved.
So with the Government review, Uber’s promised appeals, Deliveroo’s battles with the unions and many other Employment Tribunal claims waiting in the wings, this is an issue that isn’t going away in a hurry.
Julie Morris is the head of employment law at Slater and Gordon Lawyers.
For employment law issues such as holiday pay, workplace discrimination and whistleblowing protection call the expert employment solicitors at Slater and Gordon Lawyers on freephone 0800 916 9060 or contact us online and we’ll be happy to assist.