Are gig economy disrupters finally running out of road?

Linda J. Dodson

Charlie Thompson, an employment lawyer at Stewarts, says the “overwhelming direction of travel” in gig economy cases is in favour of the individuals. The Uber drivers argue they are entitled to workers’ rights but the ride hailing firm, which is appealing a 2016 employment tribunal decision, claims they are self-employed. The status of workers is in between employees and the self-employed in terms of rights.

“If the Uber decision goes the way it has gone every step of the way since the employment tribunal, what these drivers are getting is the right to the national living wage and paid holiday,” says Thompson. “They will not obtain stability in their job that a fully-fledged employee would get from unfair dismissal. The wider gig economy will no doubt sit up and take notice of it but they may be able to distinguish their specific arrangements.”

The pandemic has sent demand for some gig services surging but also revealed their vulnerability. While food delivery apps are riding a Covid boom, demand has disappeared for other gig workers. “They have been exposed as very, very vulnerable,” says Stephen Timms, chairman of the work and pensions committee and an employment minister under Labour.

“I think there will have to be some clarification and changes to this area. One of the interested parties in all this is the Treasury; they lose out.”

The UK is edging towards a resolution to the debate. A review into working practices led by Matthew Taylor, head of the RSA and a former top adviser to Tony Blair, was released in 2017.

The Taylor Review made a number of recommendations to improve the rights of gig workers and last December, the Government committed to an employment bill that vaguely promised to “build on existing employment law with measures that protect those in low-paid work and the gig economy”. No date for a second reading of the bill has been set and it has slipped down the agenda during the pandemic, leaving courts to decide the fate of workers for now.

“In many of the cases, we are talking about would it be more appropriate for these people to be classified as workers and we are seeing those debates all around the world,” says Taylor. He says the Government must address a system that provides “perverse incentives” for companies to portray people “who should really be getting workers’ rights, entitlements, holiday pay and sick pay” as self-employed.

“One of the reasons why companies like Uber or Deliveroo like to portray their contractors as self-employed is because they don’t have to pay national insurance.” This “anomaly” in the tax system should be tweaked, Taylor says.

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