The Gig Economy: The New Entrant in The Employment Market

There are three main types of employment status’, namely employee, worker and self-employed/independent contractor, with each type determining the associated rights and employer’s responsibilities (Citizen’s Advice, 2020).

The phrase “gig economy” was invented in response to the 2007/2008 financial crisis (Financial Times, 2020), as a flexible way for the newly unemployed to make a living; this new term has somewhat blurred the lines between the different categories of employment status, as we move further away from traditional work arrangements. In the gig economy, individuals receive renumeration for each “gig” they complete (BBC, 2020); for Uber drivers, this is the car journey they have undertaken, and for Deliveroo drivers, the food delivery. In 2016, it was estimated that almost five million people could be classified as gig economy workers (BBC, 2020).

The term employee is defined by the Employment Rights Act 1996 as ‘an individual who […] works under […] a contract of employment’, further defining ‘contract of employment’ as ‘a contract of service’. Over time, the courts have attempted to interpret the legislation to provide clarity, and have concluded that in order for a contract of service to exist, certain conditions must be met; the individual must personally undertake the work in return for payment, the employee is subject to the control of the supplier of work, and all contractual terms are consistent with a contract of service (GOV, 2016).

In December 2019, Uber lost its battle, yet again, arguing that its drivers were self-employed, independent contractors, rather than workers, with their claim being that the company simply acts as an intermediary (Financial Times, 2020). Uber are now appealing the decision at the Supreme Court, the final court of appeal in the United Kingdom, attempting to deny its workers’ access to basic rights such as holiday pay, paid rest breaks, and the national minimum wage (BBC, 2020). Since the Uber drivers initial win in courts, individuals wanting formal recognition of their rights gained traction. This lead to Deliveroo couriers taking legal action to reinforce their status as workers, and not self-employed contractors, granting them the associated employment benefits (BBC, 2020).

In 2017, Matthew Taylor was appointed by the UK government to conduct a review of the employment law framework, and propose recommendations with the overriding goal of “good work for all” (GOV, 2020). Within the 115-page report produced, ‘Good work: the Taylor review of modern working practices’, Taylor recognised that having secure employment was not only beneficial for health, well-being, and happiness, but had a more community-wide outreach. No doubt the gig economy has raised the government’s profile in supporting the low unemployment rate of 3.9% (Office for National Statistics, 2020), however it is those who make up the gig economy workforce who do not benefit from secure employment, and the benefits it brings, and have undoubtedly felt the full brute force of the impacts of COVID-19 due to the fragility of their employment status, and being denied any protection during this period.

Some individuals turn to gig economy work for its flexibility (BBC, 2020), some to supplement their existing income (BBC, 2020) and others out of desperation, having been left with no other choice, opening them up to exploitation and a lack of job security. Whether this business model is reflecting society’s attitudes and developing new trends to suit a work-life balance, accommodating childcare and other family and caring responsibilities, or simply a way for employers to circumvent the employment protections that every individual should be entitled to, it is now in the hands of the court to finally arbitrate.

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