Bike Courier Wins Worker’s Rights in “GIG Economy” CaseJanuary 31, 2017
Numerous headlines in 2016 made reference to the “gig economy” and reports suggest that almost 5 million people in the UK are engaged in the “gig economy”. In early 2017 an Employment Tribunal in England issued a Decision which will have a further significant impact on this sector.
What is the “gig economy”?
The “gig economy” is a term used to describe casual work carried out on a piecemeal basis. The issue to be decided by recent Tribunals in England has focused on the employment status of individuals engaged in gig work. Many companies have classified individuals as self employed contractors and as a consequence they will be unable to avail of workers’ statutory entitlements such as holiday pay or minimum wage. In 2016, an Employment Tribunal decision in a case involving Uber ruled that drivers providing services to Uber were workers. Uber announced in December that it intends to appeal.
Dewhurst –v- CitySprint UK Ltd
The first gig decision of 2017 involved the firm CitySprint and resulted in a finding that a bicycle courier should be classified as a worker rather than as a self employed contractor.
The Claimant, Maggie Dewhurst, had been employed by CitySprint for two years and had entered into an Independent Contractor Agreement with the result that she had no entitlement to basic rights such as the right to holiday pay. However, an Employment Tribunal Judge in England held that she was in fact a worker and that CitySprint had unlawfully failed to pay her for two days’ holiday. Although the award was small, the outcome is significant in establishing the status of Ms Dewhurst going forward. CitySprint was also subjected to criticism by the Tribunal Judge and she described the contractual arrangements in place as “contorted”, “indecipherable” and “window dressing”. The Tribunal Judge focused on what was happening in practice and the degree of control exercised by CitySprint as opposed to simply relying on the written contract between the parties. CitySprint has yet to confirm whether it intends to appeal this decision.
Employers in the “gig economy” would be advised to re-examine contractual arrangements and be mindful that clever contractual drafting will not necessarily absolve them from responsibilities owed to workers. Employment Tribunals will focus on the reality of the working relationship between the parties and the existence of a self employed contractor agreement may be disregarded in certain circumstances. Although decisions in England and Wales are not legally binding on the Tribunal in Northern Ireland, they will be of persuasive authority and in the absence of a good reason to depart from the judicial trend in England, it is likely that the Tribunal in Northern Ireland would reach a similar conclusion.
This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Employment Team at Cleaver Fulton Rankin for further advice or information.