Beverley Sunderland assesses companies’ insurance and health and safety obligations

In the new gig economy people have many jobs with different organisations, often to try and make ends meet. Many use their own cars or bicycles either as couriers, taxi drivers or to deliver food.

Companies have been quick to take advantage of this and many see the gig economy as a way of engaging cheap labour and hoping to sidestep many legal obligations by referring to these ‘giggers’ as ‘self employed’. This means there is no obligation to pay the minimum wage or statutory sick pay, and no obligation to give paid holidays.

But these businesses had a wake-up call at the end of 2016. A tribunal ruled that Uber drivers were ‘workers’, and were therefore entitled to the minimum wage, rest breaks and paid holiday. This is a hybrid employment category that sits between the genuinely self-employed and those who are employed with full rights.

This year has already seen a similar successful claim by CitySprint cycle couriers, with more claims in the wings from those engaged by other courier companies. There is also potential risk to an organisation’s reputation, if management overlooks the following obligations.

Health and safety

Under health and safety legislation, companies have the same obligations to workers as to employees. These include carrying out risk assessments, making sure workers understand the information and instructions they need to work safely, and have had any necessary training.

In the gig economy workers are often required to use their own cars and bicycles, which they have to maintain themselves. A clear instruction must be given as to the standards required, and checks should be randomly carried out.

Those using cycle couriers, where no compulsory proficiency test is necessary, will need to be satisfied that they have given sufficient instruction to cycle riders to alleviate the risk of accidents and that they are wearing the right safety gear.

Insurance

In employment, the only compulsory insurance is ‘employee liability insurance’ and this is only required if someone is employed under a contract for service (an employee) or as an apprentice. The Health and Safety Executive says the terminology you use (ie ‘worker’ or ‘employee’) is largely irrelevant – it is what happens in practice that matters, so simply saying someone is self-employed will not be enough. The minimum level of cover (£5m) applies to accidents and illnesses caused either on or offsite, but motor accidents can be covered by a separate policy.

Public liability insurance covers claims by members of the public or other businesses and is not compulsory in the UK, other than in relation to car insurance where third parties must be covered as a minimum. If you are a cyclist, it is of course advisable because, if you knock someone over while delivering a package, your insurers will pay any compensation to the victim, but if you are not insured then the victim will claim against you personally.

Many delivery companies are telling their couriers that they must arrange their own insurance. But are they checking to see that they have and that it is to the right level?

Although courier insurance is readily available, it is an additional cost for workers. Most standard domestic car, motorcycle and cycle insurance policies will specifically exclude claims if the vehicle is being used for a business and so many couriers may not be covered in the event of an accident, impacting on company image if its name is all over the bicycle.

As ever, any business in doubt about the legal safety of its workers and obligations should take individual legal advice to clarify where legal responsibility lies – for the sake of the worker, the public and its own reputation.

Beverley Sunderland is managing director of Crossland Employment Solicitors