Hot Topic: Gigging in the Gig Economy

This is a brief note explaining the main elements of the current focus in the press on the Gig Economy and the related recent cases around employment status.

  1. What is the Gig Economy?

This is the ever more common arrangement where individuals are engaged by businesses on an “ad hoc” and often very flexible basis. It is a development of the zero hours concept.   Another concept or work-type arrangement that is increasing in use is Turking or Crowdworking, where workers bid for and complete jobs online in a global labour market, such as through the Amazon Mechnical Turk. Workers in these economies are often called Giggers, or Turkers.

  1. Why is the status of Giggers an issue? 

The issue is whether Gig workers are employees with the full raft of employment rights, or workers with a lesser degree of legal rights, or self-employed with virtually no employment rights.  Holiday pay and minimum wage are perhaps the two most significant rights enjoyed by workers.

  1. What is the current approach to treatment of Giggers?

The position will be fact specific to the arrangements in place for the Gig workers, but the courts have been moving towards findings of the Gig workers having legal status as workers and therefore with the right of workers.

The 4 recent Gigger cases which have received the publicity illustrate the issues around Gig working and status and rights:

  1. Aslam v Uber: this involved taxi drivers who operated via the Uber smartphone app. Uber argued that it was simply a technology platform which puts drivers in touch with passengers. An employment tribunal decided that the contractual documentation between Uber, drivers and passengers did not correspond with reality. The essence of Uber’s business was the provision of taxi services. In reality, the drivers contracted with Uber to personally perform work for Uber which is driving passengers who have booked a taxi through Uber. Uber could not be said to be a customer or client of the drivers.   The Tribunal found the drivers to be workers, and not self-employed.
  2. Boxer v Excel Group Services Ltd: this case concerned a cycle courier engaged by Excel. He had to work five days a week, worked nine hours a day, had to be available at all times during the working day and could only take time off, or change hours, on notice and with agreement. In addition, the courier had no part in agreeing terms with clients, worked for fixed rates set by Excel and did not bear the risk of cost of damage in transit. Furthermore, in practice, it would be very difficult for the courier to provide a substitute. The tribunal concluded that the reality was that the courier worked under Excel’s direction, was not running his own business and was required to provide personal service. The cycle courier was therefore a worker.
  3. Dewhurst v Citysprint UK Ltd: This case also involved a cycle courier, here engaged by Citysprint. Although Citysprint couriers were asked to enter into an agreement to supply services, which stated that there was no obligation to work for Citysprint, that they could use a substitute in certain circumstances, and were not entitled to holiday, maternity or sick pay, an employment tribunal found that this did not reflect the true relationship between the parties. Couriers were required to log into the company’s own tracking system when they were available for work. They wore uniforms, were expected to work when they said they would, and were directed by a controller through radios and mobile phones. The tribunal found that couriers have little autonomy to determine the manner in which their services are performed, and the tribunal agreed that Ms Dewhurst was a worker during periods when she was logged into the company’s tracking system.
  4. Pimlico Plumbers Ltd and Mullins v Smith: A plumber engaged by Pimlico Plumbers (PP) who was required to provide personal service on a full-time basis, was required to wear a PP uniform and drive a van with the PP logo on the side, had only a limited right to provide a substitute, and who was subject to highly restrictive covenants. The plumber had to raise invoices in order to be paid, was VAT registered and personally accounted for tax and national insurance. The plumber’s contract stated he was an independent contractor. The Court of Appeal held that an employment tribunal had correctly analysed the contractual documentation in finding that the plumber was required to provide personal service. The tribunal had also correctly weighed all the relevant factors, determining that they pointed to a level of integration into PP’s business and control by PP that was inconsistent with the plumber being truly self-employed. The tribunal and EAT had, conversely, decided that the plumber was not an employee but the plumber did not pursue that point in the Court of Appeal.  The Court of Appeal therefore upheld the decision that the plumber was a worker engaged by Pimlico Plumbers. (This decision has also since been upheld by the Supreme Court).
  5. What happens now?

In view of the increasingly complicated nature of economic relationships in the Gig Economy including the above cases, several reviews and studies were launched at the end of 2016:

  • BEIS launched the Independent Review of Employment Practices in the Modern Economy, led by Matthew Taylor (the Taylor Review). The review, which is expected to last until July 2017, will consider the implications of new models of working on the rights and responsibilities of workers, as well as on employer freedoms and obligations. BEIS has said that the results of the review will “inform the government’s industrial strategy”.
  • The Office of Tax Simplification (OTS) has published a focus paper exploring the tax issues and implications of the gig economy (and the sharing economy to which it is related).
  • The Work and Pensions Committee has launched an inquiry to consider how the UK welfare system can support the increasing number of self-employed and gig economy workers.

The primary purpose of these exercises seems to be to gather information, so until they are complete, it is difficult to know in any detail what the government intends to do as a result.

However the sensible approach in the meantime would be to consider those engaged along the lines highlighted in the above cases as at least workers with the associated rights including annual leave and national minimum, including where applicable living, wage.

This is a complex area of law so please seek specific legal advice.

If you have any questions on any of the above information or require employment law or HR advice, please contact Kate Lawson of Element Law on       01892 516 216 or katelawson@elementlaw.co.uk