What’s the future of the gig economy?

City Sprint | HR Solutions

Following the recent employment tribunals of City Sprint, Uber and Deliveroo workers, what is the future of the gig economy?

For several years, the gig economy and self-employment in the UK has seen a steady rise. Self-employed people make up about 15% of the UK workforce. Between July and September 2016, an extra 213,000 people registered as self-employed, compared to the same time in 2015.

In the gig economy, workers become consultants, contractors or freelancers. Working in this way means people can enjoy more flexibility and be able to decide when and where they work.

For employers, using self-employed workers means they can avoid paying benefits like minimum wage, holiday and sickness pay.

Uber, City Sprint and Deliveroo

But although self-employed people enjoy more flexibility, they don’t benefit from the same rights as standard employees. Employees and workers have a different level of rights under the current law. Because of this, many people do not have a clear idea of their true legal status.

Uber, Deliveroo and City Sprint recently found themselves the subjects of high profile tribunals. Their drivers and couriers accused them of imposing the expectations of normal employees, but denied them employment rights and benefits. Their workers won their case, being awarded full employee status.

Taylor Review

In November 2016, the Department for Business, Energy and Industrial Strategy (BEIS) launched the Taylor review.

The review will explore how clearer information and better support might enable people to understand and enforce their rights. PM Theresa May wants the review to find solutions to the implications of the gig economy after cases like Uber.

It will also examine the grey areas of freelance employment and establish a fair, flexible and sustainable employment framework.

The future

The gig economy may have come under a lot of scrutiny lately, but it is growing steadily. Once thought of as mainly work for the creative or IT industry, it now encompasses a huge variety of industries and job roles.

For employers, on-demand hiring can lower costs and creates more competition for talent. Having ‘gig’ positions in an organisation will help it to be more agile and responsive to the changing market. Employers can also onboard new talent and off-board unneeded skills easily, without the worry of additional costs, paperwork or legal implications.

But the lack of a legal default position on employment status will no doubt see more cases like Uber and City Sprint in the future. Especially as if someone cannot reach an agreement with their employer, the only way to get a resolution is through a tribunal.

Perhaps we should be looking towards the US for inspiration. Over there the default status is employed and it’s down to employers to pursue legal action if they believe otherwise. To protect the gig economy and people’s employment rights in the UK, could this be the answer?

 

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