The Gig Economy

You may have heard the ‘gig economy’ being thrown around in recent articles and on the news but what does it mean? What do gigs have to do with the economy? Has there been an increase in concerts lately? Have One Direction finally gotten back together?*

Although you would be forgiven for assuming so, the gig economy actually has nothing to do with the musical type of gigs. The gig economy is defined as a labour market characterised by short term contracts or freelance work, as opposed to the traditional ‘permanent’ jobs. It gets its name from each job being an individual ‘gig’ - rather than receiving a regular salary for a long term job, workers get paid for one off jobs - aka ‘gigs’. Uber, Hermes and Deliveroo are key examples of gig economy companies.

Proponents of the gig economy laud the flexibility and freedom it gives to workers whilst critics deride the lack of workplace protection, claiming it to take advantage of workers. There isn’t a clearcut answer as to whether the gig economy is good or bad, with both views having value. However, the rights of people in the gig economy have recently come under scrutiny by courts. Broadly speaking, disputes have centred on the difference between workers and self-employed contractors.

To go through the definitions:

Worker

A worker generally has to carry out the work personally and is unable to send someone else in their place. They often have to wear a branded uniform.

Workers are entitled to some employment rights including:
  • the National Minimum Wage
  • holiday pay
  • protection against unlawful discrimination
  • the right to join a union
  • health and safety protection

Self Employed

Self employed people are contracted to provide a service for a client. They are free to decide when, for whom and how they will do work.

They don’t have the same employment rights as workers.
Gig economy companies tend to classify their operators as ‘independent contractors’. This is true in the sense that many can accept or reject work, whether through the ability to reject a passenger on Uber or take on 7 deliveries a night for Deliveroo. However, whether these ‘‘independent contractors’ are really all that independent is contentious. They are often subject to direct management and supervision about the work that they carry out.

Here are some of the key cases involving the gig economy and employment:

Pimlico Plumbers

Gary Smith worked for Pimlico Plumbers for six years until 2011 where his contract defined him as a ‘“self-employed operative”. As an operative, he was required to wear the company uniform, rented the branded van and had to work a minimum number of hours a week. However, Smith supplied his own equipment and could choose which jobs he took.

In 2011, Smith had a heart attack and then claims that his request to go part time was denied by Pimlico Plumbers. The van he rented was taken away and he was dismissed. Pimlico Plumbers disputes that they denied his request, saying that they had asked for details of his medical condition but only received a sick note.

This case was heard by many courts. First, in an employment tribunal, which ruled in Smith’s favour. Pimlico Plumbers appealed to the Employment Appeals Tribunal and were rejected. They didn’t stop there, and went to the Court of Appeal - which was, again, rejected. Not one to give up, in 2018, Pimlico Plumbers went all the way to the final court of appeal in England - the Supreme Court.

The Supreme Court’s decision upheld the judgments from the lower courts, to clarify that Gary Smith was indeed a worker.

Uber

Uber has long argued that, as a company, they act as an ‘intermediary’ between the driver and the user of the app - therefore the contract is technically between the driver and app user. However, in 2016 two Uber drivers, James Farrar and Yaseen Aslam, took Uber to court, arguing that they were employed by Uber rather than working for themselves. The tribunal ruled that the two drivers were indeed ‘workers’ during the time they had worked for Uber. Indeed the tribunal stated that the the terms of the contract between Uber and the drivers "did not correspond with the reality" of the relationship.

Not taking a no for an answer (am I sensing a theme among these companies?) Uber appealed to EAT and were quickly dismissed.

Did they stop there? What do you think? Not on your life. Uber took the case to the Court of Appeal in 2018 who, again, upheld the previous decision.

Uber says it will appeal the decision in the Supreme Court so - who knows? Anything can happen. Well. Probably not. But we can let Uber dream.

Deliveroo

You’ll be thankful to hear that the story of Deliveroo has a slightly different ending.

In 2017, The Independent Workers of Great Britain (IWGB) union attempted to have Deliveroo drivers in Camden and Kentish Town recognised as workers. Remember, this is a hugely important step as it grants drivers those all important rights of minimum wage and sick pay - and significantly, the right to unionise. The union wanted to represent riders to order to negotiate issues of hours, pay and holiday with Deliveroo.

However, the Central Arbitration Committee declared that since drivers have the ability to allow other riders to take their place on a delivery (to ‘substitute’) they could not be defined as workers. As mentioned before, the inability to send someone else to do your work instead of you is a key criteria of being a worker. Critics claim that Deliveroo used this differentiator as a ‘get out of jail free card’ as it changed its contract to include the substitution clause just 11 days before the CAC hearing.

Despite Deliveroo’s case, from looking at these companies, it is clear that there is a strong judicial line of cases in which gig economy operatives have been found to be workers. With the gig economy growing, it is apparent that we will soon need greater legal protections for individuals working in the gig economy, whether in the form of amending legislation or developing new law.

**

*The answer is still no. It’s 3 years into the hiatus and I’m still waiting boys.

Sienna is a member of TCLA's writing team. She is a graduate of Politics and Sociology from the University of Cambridge. Sienna is interested in race issues, such as the issue of diversity and underrepresentation within corporate circles. She hopes to educate both herself and others on the topics.

You can reach out to Sienna in our forums by clicking here.

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