Efforts to better protect ‘gig’ workers are unlikely to succeed until companies are made responsible for employment law breaches in their supply chain, writes legal expert Kevin Barrow

You have to wonder if new rules being proposed by commentators will actually help tribunals determine whether minimum wage requirements have been complied with in relation to a gig economy worker. There are already rules in place that probably give many of these workers the technical right to minimum wage. So why does the current regime apparently not work in practice?

Having been involved in the Taylor review and in recent discussions with the Department for Business, Energy and Industrial Strategy and HMRC, we believe there are fundamental problems that need to be addressed. A key issue is that the rules for worker status, national living wage and holiday pay etc, when applied to many lower-paid gig workers, are increasingly hard for lawyers and employers – let alone gig workers – to understand, which is why Matthew Taylor’s review has been looking at how to simplify status tests.

Even if the workers can work out if they have a claim, they seem to worry about how they can bring a claim without direct or indirect cost to them. This is why Taylor has been looking at simplified proceedings, amending rules relating to tribunal fees and/or reversing the burden of proof for employment status cases.

Even if they do bring a claim, the amounts per individual are often not that much, such that ‘no win, no fee’ lawyers are unlikely to be interested in individual or small groups of claimants.

And if all the above hurdles are jumped, and a large claim is brought against an intermediary that operates in the low-paid area, there is a strong possibility that it will have very little balance sheet strength and close down, rather than pay out (I’m not talking here about the major taxi and couriers companies that have been in the headlines recently, but there are plenty of smaller intermediaries in logistics and other supply chain firms).

Policing the supply chain

It seems unlikely that actual or perceived abuses of more vulnerable work-seekers and gig workers will be substantially eradicated until end users are made liable on some sort of chain-liability basis for breaches in their supply chain of laws relating to pay and rights. All end users will then, to avoid liability, have to police their supply chains more effectively than they do under the current regime, and end users who currently try to do the right thing will not be undercut by those who just go for the cheapest (probably non-compliant) supply chain arrangements.

It may be that the government will exempt end users from chain-liability only where the end user pays the workers via some form of licensed or regulated intermediary (with a new, tightly policed, licensing regime being set up for intermediaries). This would be the simplest way to reduce the administrative burden for end users.

Until this happens there is a serious risk of a proliferation in many sectors of ‘here today, gone tomorrow’ intermediaries and platforms that test the limits of any new laws and then, if and when someone manages to pin a significant claim on them, disappear.

Reputable intermediaries will struggle to compete with the cost efficiencies that these entrepreneurial intermediaries can offer and there may be a race to the bottom. End users faced with competitive pressures may struggle to resist the attractions of these entrepreneurial models.

Kevin Barrow is a recruitment partner at Osborne Clarke