Technology and demographics are changing employment patterns and workforces. However, it continues to be crucial for Irish businesses, whether or not they operate in the ‘gig’ economy or more traditional sectors, to establish the work status of an individual.

What is the ‘gig’ economy?

The gig economy is generally understood to refer to the popularity of short-term contracts or freelance work as opposed to permanent jobs. Each piece of work is likened to an individual ‘gig’. The ‘gig’ economy is common in those sectors where web-based applications are transforming the provision of goods and services.

The Uber drivers case

Uber drivers are part of the ‘gig’ economy and late last year the UK Employment Appeal Tribunal upheld an Employment Tribunal determination that Uber drivers are ‘workers’ rather than self-employed contractors for the purposes of UK employment rights, working time, and minimum wage legislation. The decision has significant implications for the business operations of Uber and other ‘gig’ economy companies, including, the financial cost of ‘workers’ having minimum wage, holiday pay and rest break entitlements. Uber unsuccessfully sought to appeal the decision directly to the UK Supreme Court and must now bring their case to the Court of Appeal.

Lessons for Irish Employers

The Uber drivers’ case emphasises how important it is for Irish businesses to look at their relationships with independent contractors. Depending on the specific facts of the case it may be determined that an employment relationship, rather than an independent contractor relationship, exists between the parties.

Establishing the work status of an individual

There are a number of common indicators that may contribute to determining whether or not an individual is an employee or an independent contractor:

Conclusion

Determining whether or not an individual is an employee or an independent contractor is important because extensive employment rights apply to employees under Irish employment legislation.