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More news on ‘Gig Economy’ business models and how it affects employment law.
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  3. More news on ‘Gig Economy’ business models and how it affects employment law.

The gig-economy is often in the news and most recently we have seen two conflicting outcomes on the employment status of drivers working for companies in this area.

The Uber drivers were confirmed as workers by the EAT and the Deliveroo drivers were confirmed as self-employed by the Central Arbitration Committee (‘CAC’). So similar business models with different outcomes…

So why the different outcomes?

It may appear that the different courts are taking different views on the same subject. However, Deliveroo recently changed its business model substantially to a more commercial and less controlling type of arrangement with its drivers, and these differences between the Uber and Deliveroo business models justify the different decisions.

How do they compare?

Shortly before the case, Deliveroo had lawyers put together a new business model and create new contracts which make it clear that the drivers are self-employed and not workers. On hearing evidence from drivers, the new documentation was found to reflect what actually happened in practice.

On the other hand, the Employment Appeal Tribunal reiterated that the level of control Uber has over its drivers when they are using the drivers’ app and driving for Uber means they are workers and not self-employed.

These two cases are important and newsworthy because they relate to the gig economy which is shaping the way business works today. While they do not change the current law, both rulings stand as a reminder to all employers; especially those who are utilising technology to improve the efficiency of a relationship between the business and the consumer.

Here are some pointers to be aware of…

  • If someone who works for you is labelled self-employed but in fact you have control over how, when and where they work and you require them to carry out the role personally (i.e. you don’t want anyone else doing it in their place), then you will need to think carefully about whether they are in fact workers.
  • Adding into the contract a carefully worded clause which says someone can use a substitute to do the work is not enough. It will need to reflect what happens in practice or what could happen in practice.
  • The more flexible ways of working and modern business models continue not to fit easily with the current legal tests on whether someone is a worker or self-employed. There will continue to be cases on this into the future.

Uber may well appeal the EAT decision and the Pimlico Plumbers case is due to be heard in February 2018. We have yet to hear whether the recommendation in the Taylor Report to give clear guidance in law on which category to put working people into, will be acted upon.

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


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