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The Gig Economy and Workers Rights - an Update

on Friday, 18 December 2020.

Whilst we await the Supreme Court decision in the long-running case of Uber BV and others v Aslam and others, the food delivery company Just Eat has announced that it is introducing new roles which pay by the hour instead of by the job.

The change ensures that workers receive the National Minimum Wage, pension, paid annual leave and other statutory rights.

It appears that Just Eat is taking a risk-averse approach against the backdrop of uncertainty raised by recent decisions, including the Uber case.

The key questions raised in the Uber case, and which it is anticipated will shortly be answered by the Supreme Court, are: first, whether the drivers were "workers" providing services to Uber and second, if the drivers were "workers" what periods constituted their "working time". For more information on this case our article can be found here. If the Supreme Court rules that the drivers are workers this brings with it certain additional rights such as holiday pay and National Minimum Wage.

Is This the Beginning of the End for the Gig Economy?

The Uber decision is unlikely to mark the end of roles which pay by the "gig" or job, but Just Eat's approach is a reminder of the necessity for businesses to be clear on the relationship they intend to create with an individual and to properly consider the reality of that relationship. Just Eat's decision to introduce a different model, and to engage individuals as workers, underlines that businesses need to have a clear understanding of the different types of employment status and to ensure that the contractual arrangements include the necessary terms.

Exclusivity Clauses - Government Consultation

One of the perceived issues with the gig economy is that it can provide roles which have little job security, low remuneration and limited or no benefits. Often zero hours contracts are used in the gig economy, and the Government has legislated to seek to make these fairer. In 2015 the Government banned exclusivity clauses in these contracts. Exclusivity clauses prohibit or restrict workers from obtaining additional work with another business, significantly impacting their ability to earn an additional salary.

With the coronavirus (COVID-19) pandemic in the background, the Government has announced a consultation looking at an extension of the ban on exclusivity clauses. The proposals would ban exclusivity clauses in employment contracts for those earning under the Lower Earnings Limit (LEL). The Lower Earnings Limit is set each year by the Government and is currently £120 per week.

The move aims to provide lower paid workers with the freedom to source additional work. The Government has estimated that 1.8 million workers are employed in one job and their earnings fall below the LEL and so could benefit from the change in law. The proposal includes an exemption for those who are well paid but only work a few hours a week.

The consultation is open until 26 February 2021 and more information can be found here.

The Government consultation, the Uber case and Just Eat's proactive approach to introduce a new model of contracting with workers are all useful reminders of the importance of regularly reviewing relationships with employees, workers and contractors to ensure that the contractual arrangements reflect best practice and the practical reality of the relationships.

Coronavirus guidance employers

If you have any queries about contractual documentation or any other issues, please get in touch with Mark Stevens (07909 681036) or Charlotte Rose (07741 311065) in our Employment Law team, or complete the form below.

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