Fixing the Gig Economy – Jumping Through Loops

There are currently 100,000 so-called gig economy workers in the UK[1]. The gig economy includes the use of digital platforms to improve the matching of supply and demand, but also to bypass the responsibilities which are associated with employment[2]. This ‘uberisation’ the UK economy therefore brings with it considerable costs to social security and employment rights[3]. This article will attempt to understand the legal status of gig workers, the impact of this on individuals, and finally realistic solutions to the issues which have arisen.

 

The Legal Status of Gig Workers

Since the millennium there has been an increasing reliance amongst employers on non-standard work arrangements[4]. There is an appeal for employers to “get out of paying benefits while washing their hands of the responsibility of administering government programs or underwriting capital costs”[5]. In return, these companies purpose to offer attractive benefits from flexible hours to high wages. Some extracts taken from one large gig-based-delivery company include:

“You’ll be self-employed and free to work to your own availability. The rider app makes it easy to plan ahead”[6]

“Make as much as £120 a day” [7]

“Keep 100% of all your tips” [8]

This sort of aggressive marketing is deceptive; gig workers are becoming increasingly frustrated with their lack of rights. Most recently evidenced by Aslam and Ors v Uber BV and Ors, a high profile case in which two Uber drivers fought for their right to be considered as employees, to receive holiday, sick pay and contractual stability[9]. The Employment Appeal Tribunal cast doubt over Uber’s claims that the claimants were in-fact workers, on the basis that Uber holds considerable control over the worker’s conduct for example: demanding documents to be vetted, forcibley logging drivers out after 3 rejected trip requests and making deductions to the drivers’ wage – to name just a few examples[10]. Upon first glance, the decision appears to weigh heavily in the favour of the gig-workers, but it is not so straight forward. The attempts of workers to achieve employment status via litigation are often counter-intuative, resulting in the dismissal of other workers or an effectively lower wage[11]. Notwithstanding this, carefully considered litigation could minimise collateral damage by understanding the needs of the businesses (as well as those of the workers).

 

Impacts on Workers

The impacts of the unfair terms imposed upon gig-workers are numerous, and can result in serious consequences for individuals. Just last month, a DPD driver died after being unable to make an appointment with the Doctor for fear of being fined £150[12]. It is unclear whether DPD will face legal ramifications.

The majority of consequences arising from gig-economy are yet to be seen.  For example it is estimated that over 1 million workers being denied £22,000 each under the workplace pension scheme for being wrongly labelled as self-employed[13]. Moreover, dangers arrive where lack of internal policy and external regulation exist. For Uber, a lack of maximum working hours, resulted in (until recently) drivers working 70 hours + a week to earn a living. Uber has since implemented policy to prevent this [14].

It’s axiomatic that these conditions do not meet up to the standards of any developed countries employment regulations. It has therefore become a popular target of political rhetoric in the UK.

“We recognise the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK’s position as one of the best places in the world to do business.”[15]

This was uttered by Theresa May as part of the industrial strategy released on the 7th Febuary this year as part of the Taylor Review. The review included 53 recommendations, but for the most part they have just resulted in consultations[16]. There is still clearly work to be done, but it appears May has her hands tied up with BREXIT.

The Solution

The government is under a lot of pressure to fix the gig-economy, but they’re not the only players. Minimum standards have been introduced with success for workers of the gig economy through the use of unions in New South Wales[17]. But with the gig economy expected to be worth $63 globally by 2020 (according to the Romanian consultancy firm PWC), clearly litigation is needed.

Academics have proposed three main solutions[18]:

  • Create a new worker classification
  • Develop a new test to establish employee status
  • Broaden employee laws to include all workers

The first solution seems preferable; creating a new worker classification and associated test could allow gig-economy workers to gain protections and be subjected to benevolent regulation, whilst keeping the ‘flexibility’ that the companies require to function. Or at least workers could be given the choice to work as an employee or under the new classification. The latter of these solutions to broaden the laws in include all workers, could prove problematic in that they could reduce the profitability of the firms. And if dependence on the gig economy is increasing — as the aforementioned prediction suggested – this could put thousands of jobs at risk.

In Review

The gig-economy is the product of advancing technology. It cuts the barriers to employment and can, in some instances, provide anflexibility which never existed before. For many, it is ideal. While litigation and policy have not caught up with the quickly-changing job market, it is due a review shortly. However, one must be careful not to damage the profitability of these business more than necessary, the impacts will be felt most by those who depend on them for work.

Bibliography

[1] “Haider-Moranis Bulletin: When it comes to Amazon’s HQ2, Toronto should be careful what it wishes for.” Postmedia Breaking News. (January 25, 2018 Thursday ): 749 words. Nexis. Web. Date Accessed: 2018/02/10.

[2] Minter K, ‘Negotiating Labour Standards in the Gig Economy: Airtasker and Unions New South Wales’ (2017) 28 The Economic and Labour Relations Review 438.

[3] ‘The “Gig” Economy and Its Impact on Social Security: The Spanish Example – Borja Suárez Corujo, 2017’ (no date) <http://journals.sagepub.com.libproxy.york.ac.uk/doi/abs/10.1177/1388262717745751#articleCitationDownloadContainer> accessed 10 February 2018.

[4] [Cappelli, 1999; Karoly and Panis, 2004; Cappelli and Keller, 2012]

[5] ‘The Monitor, January/February 2016 | Canadian Centre for Policy Alternatives’ (no date) <https://www.policyalternatives.ca/publications/monitor/monitor-januaryfebruary-2016> accessed 10 February 2018.

[6] ‘Deliveroo’ (no date) <https://deliveroo.co.uk/apply> accessed 10 February 2018.

[7] ‘Deliveroo’ (no date) <https://deliveroo.co.uk/apply> accessed 10 February 2018.

[8] ‘Deliveroo’ (no date) <https://deliveroo.co.uk/apply> accessed 10 February 2018.

[9] Aslam and Ors v Uber BV and Ors

[10] Aslam and Ors v Uber BV and Ors

[11] Dubal VB., ‘Winning the Battle, Losing the War?: Assessing the Impact of Misclassification Litigation on Workers in the Gig Economy’ (2017) 2017 Wisconsin Law Review 739.

[12] Booth R, ‘Pressure Grows on DPD and Theresa May after Courier Dies of Diabetes’ (the Guardian, 6 February 2018) <http://www.theguardian.com/business/2018/feb/05/pressure-grows-on-dpd-and-theresa-may-after-courier-dies-of-diabetes> accessed 10 February 2018.

[13] Partington R, ‘Gig Economy Workers in UK Risk Missing out on £22,000 of Pension’ (the Guardian, 7 December 2017) <http://www.theguardian.com/business/2017/dec/07/gig-economy-workers-uk-missing-out-22200-status-workplace-pension> accessed 10 February 2018.

[14] ‘Uber Limits U.K. Driver Hours in Response to Safety Concerns – Bloomberg’ (no date) <https://www.bloomberg.com/news/articles/2018-01-16/uber-limits-u-k-driver-hours-in-response-to-safety-concerns> accessed 10 February 2018.

[15] ‘Millions to Benefit from Enhanced Rights as Government Responds to Taylor Review of Modern Working Practices – GOV.UK’ (no date) <https://www.gov.uk/government/news/millions-to-benefit-from-enhanced-rights-as-government-responds-to-taylor-review-of-modern-working-practices> accessed 10 February 2018.

[16] ‘Theresa May Still Has Work to Do to Fix Britain’s Gig Economy’ (no date) <https://www.ft.com/content/7abd2444-0d9a-11e8-8eb7-42f857ea9f09> accessed 10 February 2018.

[17] Minter K, ‘Negotiating Labour Standards in the Gig Economy: Airtasker and Unions New South Wales’ (2017) 28 The Economic and Labour Relations Review 438.

[18] Kurin J, ‘A Third Way for Applying U.S. Labor Laws to the Online Gig Economy: Using the Franchise Business Model to Regulate Gig Workers’ (2016) 12 J Bus & Tech L 193.

Leave a Reply