Last week the Labour government made an announcement that they would boost the employment rights of the ‘gig economy’ workers.
In the release by Shadow Chancellor John McDonnell, they promised to “restore the balance of power in the workplace”.
But what is gig economy?
Gig economy workers usually receive payment for the ‘gigs’ they do, rather than a regular wage. This can include drivers that are paid to drop off goods, people or food. In a recent report, it was found that 2.8 million people had worked in the gig economy last year and the age of those people that were most commonly in that bracket was 18-34 year olds within London.
What is an employee and a worker?
When discussing what the rights are of an employee versus a ‘worker’ we first need to know what the definition is. (It is worth noting that there is another category – Employee Shareholder whose rights also differ, please contact us for further advice)
Employee – is someone that works under an employment contract. All employees are workers, but an employee has extra employment rights and responsibilities that don’t apply to workers who aren’t employees. Some of these rights require a minimum length of continuous employment before an employee qualifies for them.
A worker – is generally someone who has a contract or arrangement to work or do the services for a reward (the contract does not necessarily need to be in a written form. They are rewarded by money or a benefit in kind – IE promise of work in future. They have limited rights to ask someone else to do their work for them (subcontract). They are required to attend work, even if they don’t wish to. Their employer has to have work for them to do as long as the contract or arrangement exists and they are not doing any work as part of their own limited company, in an agreement where the ‘employer’ is actually a customer or client of theirs. The term ‘Gig Economy worker’ is characterised by the short-term contracts (such as drive A-B) or freelance work, rather than a permanent role.
What are the rights of the worker?
Whilst it has been established that many workers in the gig economy are entitled to paid holidays (e.g. Pimlico Plumbers) – only employees are entitled to sick pay and maternity pay and in some instances, paid time off to attend appointments. Additionally, workers are also not entitled to termination periods, written statement of dismissal, not to be unfairly dismissed, redundancy pay or collective redundancy consultation.
The issue as to whether a person is a worker, an employee or neither is often blurred. Here is a chart as to what the differences are between Employees and workers.
If the Labour government were to introduce fairer working arrangement, it could see workers given similar rights to those in permanent work, including eligibility for sick pay, maternity pay and similar benefits.
Additionally, a Labour government would also ban zero-hour contracts and introduce a living wage of £10 per hours. (A zero hour contract is the name given to a contract where an employer has the rights to vary the working hours, usually anywhere from full to zero hours. The employer has no obligation to provide work for the employee.)
What does it mean to you?
If these new proposals go ahead, it would mean big changes in Employment Law. So if you’re currently an employer with zero-hour contracts, or potentially employing gig economy workers, you will most likely need to review your contracts of employment to ensure you remain compliant.
If you unsure whether you’re currently catering for these types of contracts or are faced with an issue and require some legal support, please do not hesitate to contact one of our Employment Solicitors.
We have been operating for over a century and there is unlikely to be anything our Employment Solicitors have not dealt with before.
We can support you with your contracts of employment, Dismissal, drafting HR policies and procedures, employment tribunal services, TUPE, redundancy to name but a few areas.Find out more about our Employment department