Worker Status and the ‘Gig Economy’

What does it all mean and what’s next?

April’s guest post from Henry Doswell of Doswell Law Solicitors Ltd

More and more individuals are now looking for greater flexibility in the way that they work, which has led to the emergence of what is coined as ‘The Gig Economy’ – a working model characterised by short term contracts or freelance work as opposed to permanent jobs. This new model has led to an increase in problems for employers on how they determine employment status, with regards to both the employment rights and tax liability.

The question of ‘Worker’, ‘Employed’, ‘Self-employed’ has led to a number of high profile cases you might have seen in the news recently. You’ll probably have heard about the Taxi drivers working for Uber, the bicycle courier at CitySprint or the plumber at Pimlico Plumbing – all of whom successfully claimed ‘Worker’ status even though their employers considered them to be self-employed.

So what does it mean to be a ‘Worker’?

A worker has a number of important employment rights, including unpaid annual leave and rest breaks, the national minimum wage and statutory sick pay. They also have the right to claim unlawful deduction of wages and protection against victimisation when making a protected disclosure under whistleblowing legislation.* It is important then that as an employer you know the status of your workforce, in order to avoid costly claims and disputes.

Different tests have been developed under case law to enable a business or employment lawyer to determine the employment status of an individual. The question of whether a person is an employee, worker, or self-employed is often both a question of fact and law. ‘Worker’ status will always be a very fact-specific assessment, as the statutory definition of ‘worker’ remains very wide.

Unfortunately, under employment law, it’s still impossible to set down a clear set of defining criteria to hold an individual’s status against.

Several reviews and studies were launched at the end of 2016 to tackle the difficulties in assessing employment status. From an employment law perspective, the most significant review was initiated by BEIS (the department for business, energy and industrial strategy) which led to The Independent Review of Employment Practices in the Modern Economy, now known as the Taylor Review. This review will consider the implications of new working models on the rights and responsibilities of workers, as well as on employer freedoms and obligations.

BEIS has said that the results of this review, available in July 2017, will “inform the government’s industrial strategy”. It is also hoped that it will kick start a legislative process under which the government will provide a clearer statutory definition of “worker”. This clearer definition would then allow businesses and individuals to agree upon a mutually beneficial arrangement – without the burden of legal obligations that neither party expected!

*Whistleblowing is the reporting of suspected wrongdoing or dangers in relation to work activities. This includes bribery, fraud or other criminal activity, miscarriages of justice, health and safety risks, damage to the environment and any breach of legal or professional obligations.

If you’re reading this and thinking you might need more information on employment status, or specific legal advice on any area of employment law, give Henry a call at 01233 722942 or drop him an email at info@doswell-law.com.

Disclaimer:

Whilst every reasonable effort is made to make the information and commentary contained in this article accurate and up to date, Doswell Law Solicitors Ltd. takes no responsibility for its accuracy and correctness, or for any consequences of relying on it. The information and commentary in this article does not constitute legal advice to any person on a specific case or matter. You are strongly advised to obtain specific, personal advice from a lawyer about your case or matter.