Do we need new rules on employment status?

By Jill Evans, Law Content Analyst

The gig economy continues to blur the lines between legal definitions of employment status that weren’t that clear in the first place. Short-term, flexible and independent working has always featured in the labour market but the advent of digital platforms is making the practice more prevalent. Government research published in February found that around 2.8 million out of the UK’s population (excluding Northern Ireland) had done some work in the ‘gig economy’ in the 12 months up to July last year.

For those for whom this work is their main source of income, a question arises over what employment rights they are entitled to. Genuinely self-employed people have few rights, employees many, including protection from unfair dismissal. ‘Workers’ fall between the two extremes and qualify for, among other things, the National Minimum Wage, protection against unlawful deductions from wages and from discrimination, and statutory paid holiday.

The difference between the three categories has led to a stream of tribunal cases over whether nominally self-employed workers are actually ‘workers’ within the law. The latest, Pimlico Plumbers v Smith, is the first to get to the Supreme Court.

The decision contained no surprises. The Supreme Court refused the employer’s appeal to overturn the rulings of the Court of Appeal and the Employment Appeal Tribunal, and decided a plumber who wore a branded uniform and drove a company van was a worker, even though his contract stated he was self-employed, he provided his own tools and chose which jobs he took and when.

The court would not accept that the employer did not have significant control over the plumber’s work. He was required to carry out the work personally, and customers had to pay the company directly for the work he did. Smith’s claim arose when the company refused his request to work a three-day, rather than a five-day, week following a heart attack.

The Supreme Court’s decision was in June. In May, the EAT decided that a cycle courier working for Addison Lee was also actually a worker, and not an independent contractor as his contract stated. The nature of Gascoigne’s delivery work meant he had to have a DBS check in order to carry it out, and was required to perform the work personally. The fact that he also did other paid work (as a gardener and when touring with his band) did not stop him being a worker and entitled to paid holiday. At the end of October, the Court of Appeal will decide whether Uber taxi drivers are also workers.

Slowly but surely we are moving towards a clearer understanding of who currently amounts to a worker in the gig economy, and some would argue that such case law is all that’s needed. But not all decisions have found that those doing gig economy work are workers as every court ruling turns on the facts of that particular case. At the end of last year, for example, Deliveroo couriers lost their claim for statutory union recognition when the Central Arbitration Committee (the body that handles these claims) decided the couriers were self-employed, and not workers.

The government’s response earlier this year to the Taylor review of modern working practices included a consultation on employment status, setting out the difficulties inherent in deciding whether someone is self-employed, employed or a worker, and suggesting that employment and tax definitions of status, which are currently different, should be aligned. The consultation considered whether more guidance was needed, a re-jig of existing legislation, or new legislation altogether, but it did not contain a commitment to particular changes or to a timescale for carrying them out.

Those pushing for the rights of gig economy workers to be protected have pointed out that what is needed now is not more words, but action. Many employers – and workers – would agree with them.

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