Vedder Thinking | Articles A View From Across the Pond: The Gig Economy and Its Implications for UK Employment Law
If you use a smart phone, you’ve most likely contributed to the paradigm shift that is taking place as the modern workplace transforms to accommodate the preferences of consumers and those who provide service to them. Whether you prefer Gig Economy, Sharing Economy, Freelance Economy, On-Demand Economy, Networked Economy, Collaborative Economy, Platform Economy or Peer Economy, there is no shortage of terms used to describe the brave new working world in which many employers now find themselves. With traditional roles and responsibilities blurred, the law struggles to keep up as individuals look to earn a living without tying themselves to a specific employer, and businesses look to capitalize on the ever-growing desires of consumers to get what they want, when they want it, simply by tapping a few buttons on their smart phones.
Such businesses increasingly rely on technology platforms and algorithms to link people to services, and revolve around self-employed people doing “gigs.” A “gig” is a short-term, casual piece of work or stint, and is often sought through mobile apps on an “on demand” basis. Consumers can get gig workers to drive them to work, assemble their flat pack furniture, walk their dog, sort out their clutter, deliver their takeaway, produce corporate presentations, write articles and blogs, translate documents, do copywriting…. The list is ever expanding.
The accompanying rise in self-employment is a striking trend, in both the US and the UK, and one that is likely to continue. In the UK, self-employment is at a record level 15% of the workforce. To many of these individuals, the traditional concepts of permanent employment and career progression are completely alien. Instead, these “solopreneurs” are moving towards working from anywhere and portfolio careers.
The Gig Economy offers pros and cons to those working in it. Is it a question of choice or necessity? Security or excitement? Freedom and flexibility or uncertainty and insecurity? Independence or risk? Solopreneurism or self-exploitation? Freedom to create work or a license to exploit?
Certainly, the Gig Economy and its implications for employment law and protections are currently hot topics in the UK.
One key question raised by these new atypical working arrangements is whether the way in which a person’s entitlement to employment rights is determined by their status (employee, worker or self-employed) is fit for purpose in the Gig Economy. Or is it, as some argue, a technicality being exploited to deprive a large group of low-paid individuals of basic statutory rights?
In several closely watched cases, the parties have grappled with such issues, including matters involving Uber and a number of courier companies, with more expected during the course of this year. So far, the Employment Tribunal has found in favor of the individuals, scrutinizing these relationships and stepping in to dismiss claims by the businesses that individuals are self-employed independent contractors and conferring legal rights on them as workers. For some, these cases have served to show that our employment law needs overhauling if it is to remain relevant and workable in the new reality of the Gig Economy.
Focused on these questions, the UK Government recently launched several inquiries to consider how employment practices need to change in order to keep pace with modern business models. The implications for employee rights and responsibilities and employer freedoms will form a large part of these reviews. We await the Government’s findings later this year, together with more interesting cases on worker status. Watch this space!
If you have any questions about this article or any matters in relation to employment law in the UK or EU, please contact Jonathan Maude +44 (0)20 3667 2860 or Esther Langdon +44 (0)20 3667 2863 of the London office or any Vedder Price attorney with whom you have worked.
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