The recent wave of employment status claims has turned the so called “Gig Economy” into quite the “hot potato”.

The Gig Economy thrives on flexible self-employed workers who do not receive sick pay, holiday pay, pensions or a guaranteed minimum wage, and are often on zero-hour contracts. The benefit to consumers? Cheap taxi rides or speedy home-delivered meals.

But couriers are fighting back. Backed by their respective unions, Deliveroo, the Doctors Laboratory and DX drivers are the latest riders to jump on Uber’s band wagon.

  • The Central Arbitration Committee will decide the fate of Deliveroo drivers in May this year.
  • A separate claim against the Doctors Laboratory was lodged by its drivers who transport blood samples to and from hospitals.
  • Courier company, DX is currently conciliating through Acas as the company refuses to accept that its drivers have “worker” status.

Accordingly, the Department for Work and Pensions (DWP) has recently launched an inquiry into self-employment status and the Gig Economy.

Unlike Hermes and Amazon who intimated that their businesses would survive if they ditched the Gig Economy business model and moved staff on traditional terms, Deliveroo and Uber insisted at the DWP Inquiry that they would be unable to offer flexibility or provide as many job opportunities if they were forced to provide greater employment benefits.

Deliveroo said its current business model provides staff with job flexibility. Eighty-five percent of its riders use the service as a “supplementary income stream” and they are not penalised if they do not attend work or if they work for competitors. Deliveroo were forced to buckle on one point though; they agreed to scrap controversial clauses in its staff contracts that prevented drivers from lodging a claim against it in the employment tribunal.

What Should Employers Do Next?

If you engage staff on a flexible, self-employed basis, it may be that they are in fact “workers” and will as a result have certain employment rights. The main ones from a cost perspective are the right to a minimum wage and the right to paid holiday. It may be worth analysing the workforce at regular intervals to assess the risk and potential cost to the business.