As the gig economy has grown and developed, so too has the law relating to so-called “gig workers” and how their employment status should be regarded. As we have reported previously, in November last year, the Employment Appeal Tribunal (EAT) rejected app-based taxi firm Uber’s appeal against the Employment Tribunal’s (ET) earlier decision that its drivers should be categorised as workers rather than self-employed contractors.
In another significant case in this area, Pimlico Plumbers Ltd and another v. Smith, the Court of Appeal had to consider whether Mr Smith was a “worker” or in fact “self-employed” as his agreement stated. The ET in the first stage of the litigation process had focused on the fact that Mr Smith was obliged to work a minimum five-day and 40-hour week. A contractual provision that Mr Smith could reject work did not reflect the reality of his minimum contracted hours. The Court of Appeal agreed with the ET’s findings (we talked about this here) and dismissed the appeal. We now await the Supreme Court decision with interest (this was heard on 20 and 21 February 2018).
Both decisions will be significant in identifying the status of purportedly self-employed contractors, and will have far-reaching implications for the “gig economy”.
These recent decisions may also have given rise to a shift in the attitudes of gig sector companies towards their workforce, particularly in relation to reward. For example, Deliveroo has since provided its riders with accident insurance. This mirrors the US example of “The Black Car Fund”, which is a benefits platform for limousine and black car drivers in New York. It is a not-for-profit insurance provider that provides compensation for drivers who are injured while working. It operates by adding a 2.5 per cent surcharge to passengers’ fares for drivers who are in the scheme, entitling drivers to claim in case of injury. It is important to note that, whilst starting to offer some “employee-like” benefits, Deliveroo still maintains that, within the definitions offered by current employment law, its riders remain classed as self-employed, and not as workers.
With the gig economy growing (an estimated 1.3 million people in the UK are now engaged in this area), employers are potentially more likely to provide gig workers with select benefits of their choosing in an effort to encourage engagement in the industry (not least due to the Taylor review recommendations around benefits). In doing so, however, organisations will seek to avoid crossing the boundary into what may be considered an employer/worker relationship. In time, it might be that the resultant administration or bureaucracy involved in providing benefits to gig workers will mean that organisations have to weigh up the pros and cons of using traditional contracts of employment. Certainly, organisations will need to be cautious that the provision of benefits to attract genuine gig workers does not result in them hiring permanent employees “by the back door”. Those employers who use contractors, or are trying to build a contractor-based business model, need to take a close look at their practices – not just the letter of the contracts, but the day-to day-interactions between contractors and clients.