Where are we with the gig economy?

One of the key issues for the UK economy in recent years has been the rise of the gig economy – and now, its apparent erosion. With the Employment Appeal Tribunal (EAT) decision in the Addison Lee courier case recently delivered, confirming that the claimants are ‘workers’, and not, as Addison Lee argued, self-employed contractors, our Employment claim solicitors consider where we are with the gig economy.

Defining the gig economy

The phrase ‘gig economy’ has developed over the last few years to mean the delivery of services via a platform linking the available independent contractor with the customer needing services, often via the use of an app. It’s a way of working that has harnessed the explosion in mobile technology, and is inextricably linked with our increasingly busy lives, demanding everything from pizza to plumbers at the swipe of a screen. The gig economy also tapped into – and perhaps exploited – an ever- increasing work force looking for more flexibility and for as many Employment opportunities as were available. With austerity biting, companies such as Uber, Deliveroo an Addison Lee were able to take advantage of this pool of people willing to take on individual ‘gigs’ as and when required.

Independent contractor vs worker

The success of the gig economy has relied heavily on the use of self-employed ‘independent contractors’. The companies involved have worked hard to maintain the position that an individual taking on a gig is an independent contractor and has no Employment rights. The litigation that has been determined so far suggests that this has mostly been a fiction.

In the Uber case, involving taxi drivers using the Uber app to accept fares, the EAT found that for periods when drivers had the app switched on, they were workers – and so entitled to minimum Employment rights such as the minimum wage and holiday pay. The Uber case had a further twist in that while it was arguing that it did not have control over its drivers for employment law purposes, it was trying to convince the licencing authority in London that it did have the control necessary to operate a safe taxi service in the city. Interestingly, a French labour tribunal has decided that Uber drivers were not workers and that the agreement between Uber and the driver bringing the claim was a commercial contract not an employment contract.

More recently, Christopher Gascoigne, a courier working for Addison Lee has succeeded before the EAT in his argument that he was a worker and not self-employed. Evidence that Gascoigne might find himself in a ‘tricky situation’ if he refused a job, and that his geographical location was often controlled by the company so that he was on hand to accept other deliveries during the day, weighed against the fact that he had to re-sign a contract every 3 months which expressly included words as follows:

“You agree that you are an independent contractor and that nothing in this agreement shall render you an employee, worker, agent or partner of Addison Lee and you shall not hold yourself out as such.”

The importance of looking at the facts in establishing Employment status

The gig economy litigation has, primarily, focused attention on what the best employment lawyers have always understood to be the position when establishing the Employment status of an individual: that the reality of the relationship, what happens as a matter of fact, is crucial. Although it is important to understand the written basis of the relationship, if the reality reflects a position different to that stated in the contractual documents, it is the reality of the situation that prevails. The widespread use of working based on accepting ‘gigs’ through an app, exploiting mobile technology to create what appeared to be a new type of self-Employment, has simply shone a spotlight on something that has been a perennial issue for UK employment lawyers.

The Taylor Review

In response to the changing face of work in the UK, Matthew Taylor was commissioned to review modern working practices. The Review of Modern Working Practices, welcomed by many of the best employment law solicitors in London, was published in July 2017. The review came up with 53 recommendations, and the Government responded in February 2018 with a ‘Good Work Plan’. As part of the Good Work Plan, it launched 4 consultations covering

- Employment status

- Enforcement of Employment rights

- Increased transparency in the labour market

- Agency workers

The consultation on Employment status will have particular impact on the gig economy. The Government is seeking to introduce more clarity so that it is easier for individuals – and for employers – to know whether they are working with employees, workers or independent contractors. It is also hoped to iron out the potential inconsistencies that can arise between employment law status and status for income tax purposes. It has invited views both on consolidating the existing tests of control and personal service into legislation, and also on a new test for Employment status to be introduced.

The consultations closed on 16th May 2018, and we await the outcomes.

The future of the gig economy

We are unlikely to have seen the last of this litigation. The Supreme Court is considering its decision in the Pimlico Plumbers case, another high profile gig economy case, following the hearing in February, and many other claims remain in the pipeline. Alongside this, we will have to see what the outcome of the consultations under the Good Work Plan lead to. The Taylor review recognised the benefits of the flexibility that modern working practices can bring to the workplace – but identified the need for more clarity. It seems likely that there will be new legislation stemming from the consultations that will aim to achieve this clarity, and with it, confirm the rights of many workers currently unsure of their position.

If you are confused about Employment status, whether you are an employer or an employee or worker, talking to a top employment law firm will help you understand your position. At OTS Solicitors, we can advise on employment law for employees and workers, as well as advising employers on their obligations. By phoning 0203 959 9123 you can talk to one of our top employment solicitors and get the advice and support you need.