Update on Government proposals to enforce employment rights for those working in the Gig economy.

There have been numerous reports over the past year or so relating to the rights or lack of rights of those who work in the so called ‘Gig economy’ which involves the use of short-term contracts and/or freelance work.

Typical workers include Uber drivers, Fast food delivery couriers  such as Deliveroo and Amazon parcel-delivery workers.    There has already  been a steady trickle of legal challenges to the employment status of such workers who have been treated by the likes of Uber , Deliveroo and Amazon as self employed.

This has resulted in various decisions favouring such individuals as workers as opposed to being genuinely self-employed.   The Uber case in particular is one of the major test cases in this area  and has been appealed to the Court of Appeal along with another authority known as the Pimlico Plumbers case which has been appealed to the Supreme Court,  Each of these appeals  deal with the issue of worker status and are expected to be determined  later this year. **

Meanwhile the Government commissioned the Taylor Report which was published last July on the topic of modern working practices which made various recommendations.   The Department for Business, Energy and Industrial Strategy (BEIS) has today issued a press release setting out how the Government intends to deal with the Taylor Report recommendations.

Recent headlines in the media suggest that this is the subject of major employment law reform which promotes  valuable gains which clarify the legal rights of millions working in the Gig economy.  Others  headlines suggest that this is more of a damp squib and is a missed opportunity to deal with what is viewed as the exploitation of workers through the concept of  sham self-employment and a failure to deal with the wider exploitation of zero-hours contracts.

So what has been proposed by BEIS?   Here is a snapshot of some of these proposals with some additional comment and thoughts.

  • The proposed enforcement of vulnerable workers  holiday and sick-pay entitlements for the first time and providing what is termed as  ‘day-one rights’.     This concept however is not new because workers and employees are already entitled to statutory holiday pay from day one of their employment.  This is also true for statutory sick pay as long as employees and some workers  qualify, for example by earning more than the national insurance threshold.   What is not clear is how these rights will be enforced.
  • The right for all workers including zero-hour and agency workers to request ‘ a more stable contract’.  What does this mean exactly?  The Government believes that this will bring more financial certainty for workers but how?
  • New rights to a pay-slip for all workers including casual and zero-hours workers. This is hardly new as this right already exists for employees.  It seems that it is simply being extended to the hybrid category of ‘Worker’ and those who have irregular patterns of work. It is hardly earth-shattering.
  • Taking action to ensure that unpaid interns are not doing the job of a worker. Once again there is little detail as to how such action this will be taken.   Interns who are in reality workers or even employees already have recourse to the employment tribunal to seek arrears of pay and holiday pay in such circumstances.
  • The introduction of new scheme to name and shame employers who fail to pay employment tribunal awards. There is little detail as to who will have responsibility but presumably HMRC, for this or how to maximise any impact.
  • Increasing employment tribunal fines four-fold for those employers who display malice, spite or gross oversight to £20,000 and an increase in penalties for employers who have been before an employment tribunal before and who have lost similar cases. Employment Tribunal are largely a no-costs forum except in limited circumstances.   The maximum costs award is already £20,000 although it rare to be awarded any costs let alone the maximum amount.   It remains to be seen how much teeth these proposals will actually have.
  • The aim of providing 1.2 million agency workers with a clear breakdown of who actually pays them and any costs or charges deducted from their pay.  Once again isn’t this an extension of the existing legal right to have an itemised pay slip already afforded to employees?
  • Asking the Low Pay Commission to consider the impact of higher minimum wage rates for workers on zero- hours contracts. Does this mean that the Commission will be able to recommend higher rates for such workers and if so will the Government actually take note and be persuaded to implement such recommendations?    Will this create an additional tier and class of payments?
  • The potential repeal of legislation allowing agencies to hire workers on cheaper rates.

The Government also hopes to increase transparency in business by defining ‘working time’ for flexible workers who find jobs through the use of Apps or on-line with the aim of clarifying when such workers should be paid.

There  are also schemes in the pipeline to promote awareness of the right to request flexible working through the use of a task-force and plans to ensure that expectant mothers know their workplace rights and to raise awareness of Employer’s obligations.

A new campaign will also be launched to encourage more working parents to share child-care through shared parental leave which was introduced back in 2015.

Whilst it is good news that the Government is thinking about the plight of workers in the modern Gig economy, it would appear that these proposals are somewhat tame and are not as radical or as ground-breaking as they seem to appear.

What is absent for example is the Taylor report recommendations for bringing in a new status of ‘Dependent Contractor’ which seems to have been completely overlooked.

As always the devil will (hopefully) be in the detail once the legislation has been drafted and has passed various parliamentary hurdles. This also assumes of course  that time can be found during this Parliament to deal with it – given its heavy commitment to BREXIT and other  on-going distractions.

**Aslam and Farrar -v- Uber  UKEAT/0056/17/DA

 Pimlico Plumbers Ltd -v- Smith EWCA Civ51 2017

If you have any concerns about your current arrangements and business models then it is recommended that you contact Head of Employment Law, Steven Eckett at Meaby&Co for timely advice: seckett@meaby.co.uk or call 0207 703 5034.

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