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Growth In the Gig Economy - Employment Law Guidance for the Tech Sector

on Wednesday, 19 January 2022.

People working in the gig economy has tripled over the past five years.

The trade union TUC found that three in 20 adults in England and Wales, as of November 2021, work via gig economy platforms at least once a week, compared to around one in 20 in 2016.

Platforms using Gig economy workers often look to class them as self-employed independent contractors, working on zero-hour contracts or short-term, freelance contracts. However, there has been a rise in case law challenging this position.

In February 2021, the Supreme Court held in Uber v Aslam that Uber must classify its drivers as 'workers' rather than self-employed contractors. That meant that those drivers became entitled to rights such as to be paid in accordance with the National Minimum Wage and to receive statutory annual leave.

An employment tribunal is likely to consider an individual to be an employee or a worker where the business:

  • sets the terms of the contract and rates of pay
  • exercises a significant degree of control over the individual
  • integrates the individual into the organisation (for instance through an obligation to wear a uniform)
  • says that the individual cannot provide a substitute but instead must perform the work personally

By way of example, in the case of Independent Workers' Union of Great Britain v RooFoods Limited T/A Deliveroo the court held that because delivery drivers could freely provide a substitute to perform the delivery service in their place (and in most cases without requiring any approval from Deliveroo), the drivers had no personal obligation to undertake that delivery, and were therefore not employees or workers.

Future Reform of Employment Status

In December 2018 the UK Government published its Good Work Plan setting out workplace reforms. This package provided for enhanced rights for all individuals undertaking paid work and a requirement for legislation "to improve the clarity of the employment status tests, reflecting the reality of modern working relationships".  Whilst this legislation is awaited, a 2021 European Union directive indicates a potential direction of travel. The directive lists five factors which help determine employment status:

  • whether the tech platform sets the individual's pay or whether the individual themselves can control what the customer is charged
  • whether the tech platform sets conduct and appearance standards for the individual
  • whether work is supervised electronically by the tech platform
  • whether the individuals are restricted in their ability to choose their working hours/tasks
  • whether the workers are prevented from working for third parties

If at least two of those criteria are met, then the online tech platform will be presumed to be an employer.

Following Brexit, European directives don't have direct effect in UK law. However domestic courts and tribunals may take them into account as far as they are relevant. They may also influence future government policy, and this proposed directive will be relevant to online platforms that operate within the EU.

This article was first published in Business Leader.

For more information please contact Mark Stevens in our Employment Law team on 07909681036, or complete the form below.

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