The Gig economy and the conflict with employment status
Advice from Steven Eckett, employment solicitor at Gardner Leader
There’s little escaping the current legal challenge against Uber brought by its drivers, who are demanding basic employment rights.
Steven Eckett, employment solicitor, explores the arguments on both sides and where the law currently stands when it comes to using independent workers and freelancers.
Businesses such as Uber, Deliveroo, Flycleaners and other cloud and app-based service providers are typical examples of the growth of the ‘Gig economy’, where these businesses contract with independent workers and freelancers for short-term engagements.
These independent workers and freelancers operate as mini-businesses, saving the parent organisation from paying staff wages,
employment taxes, office space and training – savings that are passed on to the consumers.
On the other hand, the freelancer has an improved work-life balance where jobs and assignments can be selected by them, at the hours that suit their lifestyle and personal circumstances.
Notwithstanding this there are some freelancers in some industries in the UK who feel aggrieved and believe that they should be classified in law as employees, or at least workers.
If it is correct in law that they are at least workers – then the implications are that these independent contractors and freelancers are being deprived of basic employment rights, for example holiday pay, statutory sick pay and maternity pay, national living wage rights, and the right to claim unfair dismissal.
Due to all of the uncertainty, a legal challenge has been brought by the GMB trade union, which is pursuing two exciting test cases in the Central London Employment Tribunal against Uber.
The purpose of these test cases is to determine if Uber has acted unlawfully in failing to provide its drivers with basic rights such as holiday pay, statutory sick pay and the national minimum wage as it was at the time.
The GMB argues that Uber is cutting corners by not complying with its legal obligations and is eroding the employment rights of genuine workers through the back door.
The union further argues that Uber has such a degree of control over its drivers that they cannot be said to be genuinely self-employed.
Uber’s stance is that it is a technology company and not a taxi company, and that their drivers do not work for them but instead work for themselves as self-employed businesses.
Current UK employment law does not define employment status as such but this area of the law has developed from historical case law.
It is a well-established principle that for an individual to be classed in law as an employee they must work under a contract of service with the following elements present:
There must be present what is known as mutuality of
obligation which means that there is a duty on one party to provide work and a duty on the other party to undertake the work.
There must be personal performance of the services.
There must be sufficient control by the party providing the work as to how and when the services are carried out.
The parties’ intentions are also relevant, based on the reality of the arrangements in place and the facts of each situation.
The Uber case really is the employment authority of 2016 and the decision (which will no doubt be appealed whichever party is successful) will have a profound effect on the status of these ‘independent workers’ and ‘freelancers’ and perhaps the cost of the services provided to the consumer.
The decision and judgment from the employment tribunal is expected this autumn and, should it go in favour of the drivers, it could result in Uber and other similar businesses rethinking how they contract with these individuals in the future.
By Steven Eckett,
employment solicitor at Gardner Leader solicitors in Newbury, Thatcham and Maidenhead. Follow
@GardnerLeader or contact (01635) 508080,
www.gardner-leader.co.uk
