Employment rights and the gig economy

Andra Saunders, LawWorks’ in-house solicitor leading our unpaid wages project, comments on key issues for employment rights in the gig economy following the Supreme Court’s landmark decision on Uber drivers.

It is estimated that around 5 million people work within what is commonly referred to as the ‘gig economy’: a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. This might be attractive to employers looking to cut or limit staffing costs, but leaves workers unsure as to how much they will earn. In terms of the legal structure, employers assert that these roles – and alleged advantage – of flexibility of work for a person is at the core of such working practices. However, the drafting of contracts to exclude employee rights, such as zero–hour contracts, rights of substitution, etc., has always relied on the assertion that the contract is evidence of the parties’ relationship. No more.

Uber v Aslam and Others

The landmark decision of the Supreme Court in Uber v Aslam and Others, handed down in February of this year, held that Uber drivers were workers as defined under the Employment Rights Act 1996. In essence the Supreme Court held that what matters is the substance of a relationship, not what it is called.

The Supreme Court decision in effect states that a written contract is only one part of the evidential picture of the true relationship between the parties. The reality of the working practice is what is important.

The Uber drivers will now enjoy worker status, which confers some but not all of the protection enjoyed by employees. They will be entitled to receive the National Living wage, which is currently £8.91 per hour, obtain paid holiday leave of 28 days per year, and be enrolled on a pension plan. The Court also stated that drivers should be paid from the point that they make themselves available for work and not when they pick up a customer. In 2018 Uber drivers got free insurance to cover sickness, injury and maternity and paternity pay. Many believed that other firms would follow suit and, for example, clarify the status of gig economy couriers. However, firms such as Deliveroo have said that they will not willingly make such a commitment to their workers until a change in the law obliges them to do so.

The future of worker status

The Good Work Review by Matthew Taylor, published in July 2017, called for a new category of worker. The Government’s election manifesto also stated that they would take action for workers to request a “predictable and stable contract”. The right to make such a request would arise after 26 weeks service for workers working variable hours. The second reading of the new Employment Bill however was delayed due to Covid-19. The pandemic has sadly highlighted that, for those in precarious work, there has been a major decline in their income. We must wait to see what the future holds.

You can see our previous policy responses to the Taylor review and subsequent responses below.