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Good Work for the Gig Economy?

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This article has been submitted by NewLaw Solicitors

With a press release promising that millions of workers will get new day-one rights and boasting that “the UK will become one of the first countries to address the challenges of the changing world of work in the modern economy” the government lunched its “Good Work Plan” earlier this month with the intent of curing the ills of the “gig economy”. The question for us becomes whether their boasts stand up to scrutiny.

Here, I could examine the question over the course of this article, balancing the relative merits, making witty asides as we go but (spoiler alert)… the answer is no. The press release itself confirmed the proposals were “to ensure workers know their rights and receive the benefits and protections they are entitled to” and while this is a laudable aim in and of itself it is not a promise of fundamental legal change.

As a result much of the plan is simply the enforcement of current law or the promise of further consultation. In culinary terms it is the equivalent of breaking up a Greggs pasty (other pasties are available), covering it in edible flowers then calling it deconstructed and selling it to the public as the cutting edge of molecular gastronomy.

Gig Economy arrangements have existed in one form or another for decades (Tony Blair gave a speech in 1995 promising an end to zero hours contracts). I am of the view, that unlike marmite and people who talk at the cinema, they are not inherently evil. They are not the plague on workers’ rights as made out in the media and banning them is not going to create some form of magical utopia where no one is treated unfairly in the workplace. Demonising the arrangements themselves lessens the culpability of those exploiting workers under them, makes fair employers look bad and causes employees who want to work in this fashion feel like they have a lower status job.

Arguably it is the lack of clear rules, penalties and the complexities of enforcement through the Employment Tribunal system that have given those employers not looking for commitment and the less scrupulous an easy way round employment status. So in that sense, I agree with the government but banning them is not the answer.  However, they do need better rules to govern when and how they should be used to prevent exploitation.

The Good Work Plan drafted in response to the Taylor Report was the government’s chance to tackle these issues head on. Here key suggestions within the plan include;

  • Changing the rules around what constitutes a “break in continuity”

Under current rules a gap of employment of one week or more is capable of breaking continuous service meaning it is very difficult for gig economy workers to attain the service necessary for many employment rights. Extending this to up to one month (as proposed) would mean those who work in more sporadic fashion stand a much greater chance of reaching the elusive 2 years’ service needed for many rights.

  • The right to request a stable contract

Here the current proposal is that all workers, not just zero hours and agency workers, will have the right to request a more stable/predicable contract. Again how effective this proposal is will depend on when such a request can be made and in what way employers are required to respond. The proposal is a right to “request” it does not imply there will be an automatic right to have such a request granted as such there is no real indication as to how affected this will be.

  • Enforcement by HMRC of lowest paid workers’ rights

Here the HMRC would become responsible for enforcing worker’s rights to national minimum wage, holiday pay and sick pay for the first time. This would give workers a faster, less costly mechanism for enforcement.

Alongside this the government has also proposed;

  • Extending the right to a written particulars of employment
  • A clarified definition of “working time” for gig economy workers
  • A list of day-one rights including clarification of rights to holiday & sick pay, as well as a new right to a payslip for all workers, including casual and zero-hour workers
  • Increasing the pay reference period for holiday pay to 52 weeks (to account for seasonal variations)
  • A new naming and shaming scheme for employers who fail to pay employment tribunal awards
  • Increasing the level of fines for employers showing ‘malice, spite or gross oversight’ to £20,000 (from £5,000).

However, whether the plan will bring real change to those at the wrong end of the gig economy will depend on the final detail which is notably lacking in respect of almost all the proposals many of which come with the caveat that further consultation is needed. This is no more evident than in the government’s approach to any changes in the law in respect of employment status or the enforcement of employment rights where any suggestions were notably absent in favour of a decisive move straight to further consultation.

Arguably the government would likely accomplish more by simply not tabling a replacement to the fee system, but the Good Work Plan could not even leave that alone stating that the government is reviewing the decision that led to fees being outlawed very carefully. But don’t worry gig economy workers, if the government does decide reintroduce fees to the tribunal system they will, you’ve guessed it, consult further on whether to charge for proceedings to determine employment status.

It is almost like there is another massive change pending that could affect employment rights and the economy and the government thinks they would be better keeping their options open depending on how well that goes.

Much like the A-Team, I love it when a plan comes together and there is some content here that could, (detail dependent) help those being exploited in the gig economy.  But again not unlike the A-Team this plan feels hastily cobbled together in shed with whatever material came to hand. The “Good Work Plan” is less a fundamental shift in thinking, more a tactical rebranding that has been subject to so much upselling we are now at the point where the product bears no resemblance to the advert.

While I can’t say I agree wholly with many of the unions’ approach to the gig economy I do agree with UNISON general secretary Dave Prentis who stated “the government’s good work plan looks set to fall at the first hurdle. It’s no good, it won’t work and it isn’t a plan”.