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Gig economy in the news today

Today the government has announced their “Good work plan”, a sort of nod in the direction of the 1.2 million gig economy workers in Britain, toiling away for companies such as Uber and Deliveroo. The challenges presented by this new style of working are numerous, and cases around them continue to grab headlines as it’s considered whether or not these workers are being denied their rights by being categorised as “self-employed”. Today, many are disappointed to hear that Theresa May has said she’ll aim to “improve rights” for these workers but hasn’t committed to anything concrete. The government intends to carry out four consultations to “inform what the future of the U.K workforce will look like” but have not yet said when these will take place.

Deliveroo and Uber cases last year

Last year you may have heard about two different outcomes to similar gig economy cases: the Uber drivers (who were confirmed as workers by the EAT – Employment Appeal Tribunal) and the Deliveroo drivers (confirmed as self-employed by the Central Arbitration Committee). Both cases hung on the distinction between a self-employed person and a worker. Whilst these cases didn’t make the situation any clearer, they certainly raised awareness of the changing face of self-employed work. Despite the amount of reporting on the subject today (and it does all sound contradictory), in fact, little has actually changed since these cases last year.

It boils down to this; a new way of working, such as gig economy, demands new laws to support both employees and employers and the current legal definition of what a self-employed person is, simply doesn’t cut the mustard with this modern way of working. But a solid one-size fits all definition between a self-employed person and a worker has yet to be made (if it can be made at all).

As an employer you need to be aware of the complex issue of whether someone you are working with is your employee, a worker (as in our zero-hours contract), or self-employed. With the issues gaining traction, and business models evolving, it’s a good time to consider which status best reflects the relationship you are trying to achieve and how to choose the most appropriate written contracts for your staff (but don’t panic!).

Deciding factors

The distinction between employee, worker and self-employed person is very important because this status will determine (1) how you manage tax and national insurance; (2) what responsibilities you have and (3) which employment law rights apply (e.g. the right not be unfairly dismissed; the right to a redundancy payment; minimum wage; sick pay etc). In order to identify the correct status for your staff, you need to ask yourself a number of questions about the working arrangements you have with them. Below is an extract from our table which prompts you to ask the right questions and shows the main differences.

All employees are workers, but not all workers are employees. The third category – the genuinely self-employed – have very few employment rights.

Watch out for further updates on this subject, and if you have any questions at all, or are unsure what category your staff members fall into, please get in touch for some advice today on 0333 444 0165 or email help@citrusHR.com

Further reading >> The Taylor review – and independent review outlining 7 principles to address the challenges facing the U.K labour market