The gig economy and the Employment Tribunal

The gig economy and the Employment Tribunal

The relationship between the gig economy structure and employment rights has been highlighted frequently in recent news. With the landmark case of the Uber drivers ruling in October 2016 that, despite being treated as self-employed workers in line with the gig economy, Uber drivers were in fact workers and were entitled to the rights that accompany this status.

But what is the gig economy?

At the heart of the gig economy is the desire to create a labour force which promotes shorter term contracts and freelancing rather than permanent employment. This promotes flexibility, more control over where and when you work, unlimited earning potential and allows you to be your own boss. For employers it allows the expense of paying employees when there is no work for them to be saved and takes away the worry or hassle of having control of the workforce. Given the flexibility of their workforce, the gig economy essentially allows businesses to scale up quickly and keep any potential losses and risks low.

Whilst there are countless theoretical positives to the gig economy there have also been some major concerns raised over what it could mean for the workforce. The workforce lose employee status and the rights that accompany this. For example, if there is no work to be done then the workforce would not be paid which highlights the minimal job security for the workforce with no guarantee of a minimum wage.

However, this should not be confused with zero hour contracts, which have been in the news recently following employer's like Sports Direct using them for factory workers. The gig economy only allows the workforce to work when they want to, without any contractual obligation to take on work.

Dewhurst v CitySprint UK Ltd

In the most recent case with delivery drivers, Dewhurst v CitySprint UK Ltd, the Employment Tribunal ruled that the self-employed driver was again a worker under the Employment Rights Act 1996 and was entitled to the rights associated with this status. The Claimant, Ms Dewhurst, had worked as a delivery driver for CitySprint for over two years but was classified as a self-employed driver. Ms Dewhurst commented that like many of her delivery colleagues she earnt under the minimum wage and was finding it difficult to take holiday as she would not be paid for any time off. Ms Dewhurst believed she fell within the definition of a worker and took her claim to be decided by the Employment Tribunal.

The Central London Employment Tribunal followed the Judgment in the Supreme Court case Autoclenz Ltd v Belcher and ors, in which the Supreme Court gave the Tribunal powers to divert from the terms written in an employment contract if in reality the terms were contradictory to the situation. The Tribunal relied heavily on the substitution clause contained in the contract which only allowed a substitute to be another CitySprint driver. This helped to determine the element of control which was ultimately found to be with CitySprint. Ms Dewhurst was described as being integrated into CitySprints business and was therefore deemed to be a worker.

This case highlights the Employment Tribunal's willingness to override written contracts if it contradicts the reality of the situation. For many, the original Uber decision has opened the floodgates on these cases and has showed a trend that in relation to gig economy relationships, the Employment Tribunal is favouring the worker not the employer.

If you require any further information on the gig economy and how it could affect you or your business, our Employment Law team can offer legal advice and support. Please call us on 01603 693500 or email us using the 'make an enquiry' form. Offices at Norwich, North Walsham, Sheringham and Brooke.