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A “Gig economy” and what it means to employers

29/11/2016

We are apparently living in a “gig economy” – a world where temporary jobs are common and it’s not unusual for people to be employed on short-term contracts.
But is there a changing tide against flexible working practices due to the apparent cost to people’s basic employment rights? Several key events recently are indicating that there could be.

The taxi app firm Uber lost a landmark battle with its drivers when an employment tribunal confirmed that despite Uber treating its drivers as self-employed, they were in reality employees. This means they should be entitled to the rights employees receive such as the National Minimum Wage and paid holidays.

The BBC has also highlighted working practices for self-employed Amazon delivery drivers following an undercover investigation. The broadcaster claimed drivers worked an illegal amount of hours and earned less than the minimum wage following deductions. 

Then Her Majesty’s Revenue and Customs (HMRC) launched a specialist unit to investigate companies that use large numbers of self-employed or agency workers following an investigation by the Guardian newspaper into low pay at the delivery company Hermes. 

And finally, the Government has launched an independent review into what it calls ‘modern employment practices’. The brief is to consider whether emerging business practices are undermining people’s basic employment rights and whether the definitions of employment status need to be updated to reflect new forms of working. 

FBC Manby Bowdler employment specialist Amber Bate examines what all of this means for employers: 

“There does appear to be a growing backlash against organisations that are adopting flexible working practices. Last year a report by the Citizens Advice Bureau estimated that one in 10 people classified as self-employed could in fact be employees.

“It also noted an 18 per cent increase in those seeking help to determine their employment status, suggesting people are becoming more aware of their rights if they have been falsely classified. 

“Simply labelling people as self-employed doesn’t make it so. If you get it wrong and classify anyone in your workforce incorrectly, then you are at risk of costly tribunal claims, outstanding tax liability and penalties, and damage to your business’s reputation.

“It is really not worth employers getting it wrong and it seems you are now more likely than ever to get picked up on any errors in the employment status of those working for you. 

“We can help you assess any risks associated with employment status of your casual workers, employees and self-employed contractors in your organisation to ensure your business is protected from such risk.”

Click here to find out more about the Employment Law Services offered by FBC Manby Bowdler.

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