Update on ‘Gig Economy’ Case Law and Developments

August 25, 2017

There have been a number high profile tribunal cases this year which have kept the ‘gig economy’ making headline news. These cases explore the increasingly controversial ‘worker’ status which falls somewhere between employee and self-employed contractor. In reality the gig economy is not a new phenomenon. Taxi drivers, trades people and couriers for example have worked on a self-employed basis for years and been paid for each fare, job or delivery. Recent technological developments, online platforms and mobile apps have, however, resulted in the formation of new business models and the law is still catching up.

Recent decisions include:

Aslam and others v Uber BV and others (2017)
In one of the first high-profile cases, the employment tribunal held that Uber drivers are workers rather than self-employed, and are entitled to receive the national minimum wage and be paid for annual leave. Uber is appealing to the Employment Appeal Tribunal (EAT) against this first-instance decision. The EAT will hear the appeal on 27 and 28 September 2017.

Dewhurst v CitySprint UK Ltd (2017)
In this case Ms Dewhurst was found to be a worker rather than self-employed and was therefore entitled to employee benefits. Ms Dewhurst was employed as a cycle courier for CitySprint UK and worked for the company four days a week during which she could not reasonably have been expected to take on other work. Couriers received training during the recruitment phase and did not provide invoices but were paid each week by the company who calculated their pay. While the facts are very specific to this case this decision will only make it harder for businesses to rely on labelling on the title of “self-employed” in order to avoid providing employee benefits such as holiday and sick pay.

Boxer -v- Excel Group Services (2017)
In another case involving cycle couriers, the claimant, Mr Boxer argued he should be entitled to holiday pay as an employee rather than being viewed as a self-employed contractor. It was decided that he was entitled to the rights of an employee as although his contract specified that it was a non-exclusive agreement, he was expected to be available throughout the working day for nine hours a day five days a week and in reality the company could not have survived if their couriers were non-exclusive. The tribunal also noted that Mr Boxer could not negotiate the tariff or terms of his contract. The tribunal held that Mr Boxer was therefore an employee entitled to holiday pay rather than a self-employed contractor.

Pimlico Plumbers and Anor v Smith
Mr Smith also won his tribunal case arguing that he was a worker of the company rather than self-employed. This decision entitles him to holiday pay and the national living wage. The case has since been appealed by Pimlico Plumbers to the Supreme Court. As a more traditionally structured company this case could affect companies beyond gig economy platforms. There is not currently a date set for the appeal in this case but the decision reached by the Supreme Court will be applied by other courts and will therefore have far reaching implications.

“Good work: the Taylor review of modern practices”
In response to recent concerns about the gig economy and how worker status is functioning in practice the government commissioned a report, “Good work: the Taylor review of modern practices” which was published this month. This is a substantial report which makes a number of recommendations including proposals to:

1.    Maintain the threefold distinction between employees, workers and the self-employed but to replace the term ‘worker’ with ‘dependent contractor’ instead;

2.    Amend the relevant legislation to better reflect the principles established by the case law;

3.    Remove the requirement for dependent contractors to have a contract to perform services personally (consequently reducing the relevant/importance of substitution clauses). Instead when looking at ‘dependent contractor’ status, the focus should be on control;

4.    Dependent contractors should be treated as employees for tax purposes.

It remains to be seen which proposals, if any, the government will proceed with. As employment law is a devolved matter, it is also not guaranteed that any changes introduced in GB will make their way into Northern Irish employment law.

In the meantime, the developing case law will be as important to employers in traditional business models as it is to those operating on gig economy platforms. Those employers taking advantage of technological developments and indeed those employers who are simply seeking maximum flexibility should take care in how they engage their workers.