This story was submitted by Greenaway Scott
The so-called ‘gig economy’ is characterised by short-term contracts or freelance work and has coined its name from individuals being paid for each job or ‘gig’. The phrase has become more well-known following the recent high profile rulings in cases involving Uber, Deliveroo and more recently the case of ‘Pimlico Plumbers.’
Gary Smith’s case against Pimlico Plumbers, which has been running since 2011, is the latest in a long line of legal challenges on employment status. The Supreme Court upheld the previous decision by the Court of Appeal that Gary Smith, who worked for Pimlico Plumbers, could be described by a worker despite signing an agreement with the company describing himself as self-employed.
Rebecca Hilsenrath, chief executive of the Equality and Human Rights Commission (who have been funding the case on behalf of Gary Smith since 2015) commented that:-
“If you wear the uniform, if you drive the branded vehicle, if you only work for one business, you are employed. That means you are entitled to the appropriate protections and adjustments which go with the job, to enable you to work safely and productively. Everyone has the right to a healthy working environment, and to that end businesses need to recognise their duties to their workers.”
Worker status means entitlement to a national minimum wage, holiday pay and protection from discrimination. This case highlights the weaknesses in businesses labelling individuals ‘self-employed’ when in practice, the level of control that they are able to exert over the individual is more indicative of a worker or employer/employee relationship.
The ruling however, did not provide further guidance or add anything to the current test for establishing whether someone is a worker and difficulties continue to be prevalent for businesses distinguishing between an employee and a worker or between a worker and an independent self-employed contractor.
Further guidance is expected when the Court of Appeal hear an appeal in the Uber case in October 2018.
In addition to upcoming case law, the 2017 Taylor Review of modern employment practices made recommendations that included that people who work for platform-based companies, such as Deliveroo and Uber, be classed as dependent contractors.
The government formally responded to the Taylor review in February 2018, and acknowledged that there is a lack of clarity over employment status and have begun consulting over how the test for employment status could be defined, clearly and certainly, within legislation. In addition, and alongside their responses to the Taylor review, the government launched a Consultation on Employment Status which, among other things, asked for responses on whether to introduce an online tool to help determine employment status (this could be in addition to or as an alternative to legislative change).The consultation ended on 1 June 2018.
The above rulings, and proposed changes, do not mean that a business cannot legitimately engage individuals on a self-employed/worker basis, however, due to the recent case law evidencing that employment tribunals are taking an ever more pragmatic view on employment status, we would recommend that businesses that engage individuals on a self-employed or worker basis seek legal advice to determine whether there is a risk that their status may be challenged at a later date.
The employment team at Greenaway Scott are more than happy to assist with any clarification or further information regarding employment status. Please contact us at [email protected].