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Self-employed contractors and the gig economy – keep watching this space!

Pimlico Plumbers has now been granted permission to appeal to the Supreme Court. The decision reached by the Supreme Court will be significant as the highest authority on the employment status of purportedly self-employed contractors. It is likely to have implications for the so-called "gig economy".
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Self-employed contractors and the gig economy – keep watching this space!

Another triumph for cyclists

Following in the tracks of CitySprint, Deliveroo and Excel, Addison Lee is the latest company to wrongly classify its workforce.

In a claim again supported by the Independent Workers Union of Great Britain (IWGB), an employment tribunal has held that Addison Lee wrongly classified Christopher Gascoigne as an independent courier. The judge hearing the case, Ms Joanna Wade, was the same judge who made the damming finding against CitySprint in January (see http://www.ukemploymenthub.com/citysprint-courier-delivered-employee-status-by-employment-tribunal). As in the CitySprint case, Judge Wade was critical of the construction of the contract that Addison Lee had put in place in an attempt to avoid a finding of worker status. Further, Judge Wade criticised an indemnity included in the contract against any liability Addison Lee may face based on any employment-related claim. Not only was it thought to be an attempt to frighten the worker off litigating, it also suggested that Addison Lee knew the risk it faced in portraying Mr Gascoigne as self-employed.

The IWGB has been supremely active in fighting for rights for those working in the gig economy. In another claim that it has supported against The Doctors Laboratory (see http://www.ukemploymenthub.com/gig-economy-couriers-delivering-emergency-blood-are-workers), it is asking the Central Employment Tribunal to make a finding that five couriers are in fact employees. Such status gives more rights, including the right not to be unfairly dismissed. The IWGB also awaits a decision by the Central Arbitration Committee over the employment status and union recognition case it brought against Deliveroo.

We also await the Government’s considerations of the Taylor Review (see http://www.ukemploymenthub.com/good-work-taylor-review-on-modern-working-practices). The evidence appears to be overwhelming that a contracting company should categorise any worker under its control and supervision with a new status which entitles them to holiday pay, sick pay and the minimum wage.

Mr Gascoigne’s status of worker entitles him to holiday pay and the national minimum wage. The employment tribunal will list a separate hearing to decide the amount of holiday pay owed to Mr Gascoigne.

Another triumph for cyclists

Good Work: Taylor Review on Modern Working Practices

The much anticipated independent review of modern working practices by Matthew Taylor, Chief Executive of the Royal Society of Arts, was published this week (11 July 2017).

The review suggests a national strategy to provide good work for all “for which government needs to be held accountable”.  It takes the following into consideration when it talks about “good work”: wages, employment quality, education and training, working conditions, work life balance, consultative participation and collective representation. Its key message is that everyone should enjoy a “baseline” of protection and be given routes to enable progression at work.

The full review can be accessed via the following link:


Some of the key recommendations are set out below. It remains to be seen whether and when the government might implement any of them:

Worker status

  • Updating legislation to lay out exactly the legal tests for types of worker; this should no longer be by reference to case law.
  • Keep the distinction between employees and workers but rename workers who are not employees ‘dependent contractors’.
  • In relation to ‘dependent contractor’ status, the requirement that someone perform work ‘personally’ for an employer should not be relevant.
  • Place more emphasis on control in the definition of dependent contractor status. This should be “not simply in terms of supervision of day-to-day activities”.

Terms of employment

  • All employees and dependent contractors should receive a written statement of employment particulars at the outset of their job. This must cover their entitlements, how these are calculated,  and the method of payment.
  • Failure to provide such a written statement should entitle  all employees or dependent contractors to bring a claim for compensation.
  • Workers on zero hours contracts should have a right to request a contract that guarantees their hours after 12 months in the job.


  • The National Minimum Wage should be increased for hours that are not guaranteed.
  • The government should explore ways in which workers can negotiate for more guaranteed hours.
  • The twelve week reference period for holiday pay should be extended to 52 weeks;  to be fairer for those who have inconsistent work patterns.
  • Workers should have greater flexibility with their annual leave entitlement, including being able to receive ‘rolled-up’ holiday pay in real time.

Employment rights

  • It should be made easier for gig workers to demonstrate continuous service in respect of employment rights which demand a period of continuous employment before an individual is eligible.
  • Statutory sick pay (SSP) should become an employment right for all workers, and should accrue in the same way as holiday pay.
  • Returning from time off for sickness should be given the same protection as returning from maternity. This is conditional on the individual having engaged in the Fit for Work service.
  • The government should decide whether temporary changes to contracts could be requested by individuals, in particular where they have caring requirements.

Agency workers

  • Agency workers who have worked for the same hirer for 12 months  should have the right to request a direct employment contract with the hirer.
  • ‘Swedish derogation’ contracts should be banned.

Platform working

  • Companies using technology to commission work should use data so that workers can be given a guide as to their potential earnings. In this way workers can freely choose lower paid jobs knowing what they are likely to earn.
  • Piece-rate legislation should be altered so that workers who are rewarded on output should earn at least 20% more than the National Minimum Wage.

Employee voice

  • There should be a review of information and consultation regulations. These should be extended to include all types of worker and the threshold for implementation reduced from 10% to 2% of the workforce making a request.
  • Companies over a certain size should have to disclose their employment model. This would include information such as their proportion of zero hours contracts.

Tribunals and enforcement

  • Individuals should be able to have their working status determined by an employment tribunal without having to pay any tribunal fees. In addition, the burden of proof should be on the employer, rather than the worker.
  • Where employers have repeatedly ignored law, tribunals should be required to consider imposing “aggravated breach” penalties and cost orders.

Tax and national insurance

  • National insurance contributions for employed and self-employed workers should be moved “closer to parity”.
  • An increase in National insurance contributions from the self-employed should be accompanied by an associated improvement in both pension provisions and family-friendly rights for the self-employed.
  • Electronic platforms (e.g. Paypal) should replace cash-in-hand payment for jobs.

Career progression

  • The government should endeavour to work alongside employers who employ a high proportion of gig economy workers to see how they can benefit from the apprenticeship levy.
  • More workers in the gig economy should use ‘digital badges’ or other forms of accreditation in order to carry verified approval ratings with them if they work for someone else.


Good Work: Taylor Review on Modern Working Practices

Gig economy: Couriers delivering emergency blood are workers

In March 2017, five cyclists, motorcyclists and van drivers who carry emergency blood to hospitals and samples to laboratories launched a claim challenging their self-employed status, backed by the Independent Workers Union of Great Britain (IWGB).

Last week The Doctors Laboratory (TDL) conceded that these five couriers are in fact workers, however notably did not confirm whether they would repay holiday pay owed to the workers. This concession of worker status follows a similar concession by eCourier, which recently admitted to wrongly classifying couriers as self-employed contractors rather than workers.

This is the latest development in the increasing number of gig economy employment status cases. The recent moves by eCourier and TDL in conceding worker status show the momentum that is gathering behind such cases and that companies are now seemingly prepared to pre-empt a tribunal ruling of worker status. The general secretary of IWGB, Jason Moyer-Lee, went as far as saying that it shows that “worker status is an inevitability in the gig economy”. Interestingly IWGB is going to continue its case against TDL and will argue that the couriers are in fact employees, not just workers, in an attempt to secure them the guaranteed additional benefits (such as protection against unfair dismissal) that such a classification would bring.

Gig economy: Couriers delivering emergency blood are workers

The Taylor Review: a new right to request fixed hours?

Zero-hours contracts remain controversial and, last month, fast food chain, McDonald’s, confirmed that it will offer its workforce of 115,000 a choice as to whether to work fixed hours or remain on their zero-hours contracts. McDonald’s had previously trialled this arrangement and they found that only around 20% of staff chose to move to fixed hours, with the majority preferring the flexibility of the zero-hours arrangement.

There has been speculation that, inspired by the McDonald’s arrangement, Matthew Taylor’s highly anticipated review on the gig economy is likely to recommend a new right for workers on zero hours contracts to secure a guaranteed number of hours. It is expected that the right will be structured in a similar way to the right to request flexible working, with the employer maintaining the right to refuse the request for specific statutory reasons only.

The Labour party has pledged to ban zero hours contracts completely but the McDonald’s experience suggests that there may still be a place for them in the modern working environment.

The Taylor Review: a new right to request fixed hours?

The gig economy: “Free-riding on the welfare state”

Due to the calling of a snap general election, the Work and Pensions Committee has curtailed its inquiry and has now published its report on the gig economy and its use of self-employment. The report is somewhat damning of companies that utilise the gig economy model. The report concludes that:

“Self-employment is neither inherently good nor bad. It can represent entrepreneurial zeal and a highly desirable culture of self-reliance. It can also be deeply negative, allowing companies to evade responsibility for their workers’ wellbeing and increase their profits. It is incumbent on Government to close loopholes that incentivise this behaviour.”

The main points that the report raises are:

1. Welfare safety net

Employee status and its corresponding rights help to protect (1) individuals from personal hardship and (2) the welfare state from incurring costs in relation to such individuals. On the other hand, self-employed individuals do not have such rights and therefore neither they nor the welfare state are protected. The report argues that self-employed status is being used to deprive individuals of their rights in the name of “flexibility”, and in doing so companies are refusing to contribute to society by protecting those individuals and by contributing substantially less by way of National Insurance contributions (NICs). This is a vicious circle as NICs then bring in less revenue to the welfare pot but there is a larger demand for support as a result of such pseudo-self-employment.

2. NICs

Our welfare state is founded on the principle that everyone contributes. In the past, self-employed individuals received less support than employees, which is why their NICs were substantially lower. However, the reality today is that access to the services that NICs fund is substantially the same for both the employed and the self-employed. The report therefore recommends that the new government consider how it can equalise NICs to ensure that the welfare pot is sufficiently funded.

3. Low levels of retirement saving by the self-employed should be tackled

The report argues that the current framework does not do enough to encourage self-employed people to save for retirement, which, in turn, increases the likelihood that they will need to depend on the welfare state in the future. This could lead to a welfare state crisis whereby there are not enough funds to meet demand. The report suggests looking at tax reforms to encourage greater contributions to pensions by the self-employed.

4. Assumption of worker status

The report recommends that the default position should be an assumption of worker status. The onus would then be on employers to provide basic rights and benefits (for example, national minimum wage and paid holiday). If they wanted to argue that individuals were self-employed the burden of proof would rest with them rather than the individuals.

5. Encouraging real self-employment

Job centres focus on getting individuals into employment (rather than self-employment). The report suggests that whilst employment may be suitable for most individuals, more support should be available for helping people launch (or re-launch) self-employed careers. This would avoid stifling genuine entrepreneurs and viable new businesses.

It will be interesting to see how the findings of this report and the findings of the upcoming Taylor review of modern working practices compare. However there seems to be increasing pressure on government to ensure that gig economy workers are afforded at least basic rights. This, along with a growing body of case law from the employment tribunal that is critical of the gig economy model, means that employers utilising such a model should start to look at ways to address these problems before they are forced to.

To read the report in full click here.

The gig economy: “Free-riding on the welfare state”

The zero-hours contract debate: is the end in sight?

It was reported yesterday that McDonald’s is set to offer employment contracts containing fixed hours to its 115,000 employees employed under zero-hours contracts. This follows a trial offer across 23 restaurants, following which 20% of employees at those restaurants elected to switch to contracts containing fixed working hours.

McDonald’s 115,000 zero-hours employees represent a significant proportion of the 905,000 that the Office of National Statistics reported last month were employed on zero-hours contracts for their main job between October and December 2016. This, therefore, is a significant move. It remains to be seen how many of the 115,000 will in fact take up the offer of fixed hours. However, the 20% figure from the trial suggests that the debate over zero-hours contracts is not over yet – it is notable that 80% of those included in the trial elected to stay on zero-hours contracts (although we do not know how the terms otherwise compared).

What is clear (and has been for some time now) is that, disregarding the benefits of zero-hours contracts for employers, whilst many employees prefer the certainty and security of contracts containing fixed hours, many value the flexibility of a zero-hours working arrangement. It seems McDonald’s has now found a way of putting this debate to bed within their organisation, by giving staff the ability to choose between the two, but otherwise it remains on-going. Research by the Trade Union Congress, also released yesterday, has found that the number of employees in the UK in insecure employment (including, but not limited to, zero-hours contracts) continues to grow.

Perhaps the solution McDonald’s has found would help address the debate elsewhere. It may be that the answer is not to ban zero-hours contracts but to change the law so that all employees who would otherwise be given zero-hours contracts, are offered the choice of a zero-hours arrangement, or a fixed hours arrangement on comparable terms. This is certainly something that larger employers, at least, may want to consider. For now though, the debate looks set to rumble on.

The zero-hours contract debate: is the end in sight?

Matthew Taylor’s report on the gig economy – emergent themes

Matthew Taylor, former head of Blair’s Number 10 Policy Unit, is due to publish a report on the gig economy this summer. A number of themes have emerged from his interviews and discussions with the press to date.

His report will look at the following issues:

  • Security, pay and rights
  • Progression and training
  • Balance of rights and responsibility
  • Representation
  • Opportunities for under-represented groups
  • New business models

The report will emphasise that it is not just quantity of work that matters but also the quality of work. Mr Taylor wants to ensure there are greater opportunities for progression and fulfilment in the self-employed and worker economy. He wants to strengthen employee voice in the workplace.

His research will recognise that employers want clearer rules on how to determine self-employed, worker and employee status. To that end, it is likely to foreground the idea of the “dependent contractor” (a term currently used in Canadian law) as an indicator of worker status.

His investigations look into a diversity of self-employment roles, and will take account of differences between, for example, the construction and healthcare industries.

Finally the report will also disclose the extent to which tax treatment and social security rights are a big influence on employment trends. We can assume that Matthew Taylor saw the now cancelled tax reforms to self-employed workers as a step in the right direction. Although he cannot make recommendations on tax, he is likely to want to nudge tax treatment in an employee-friendly direction as well as recommend a strengthening of pension entitlements for those working in the gig economy.

Matthew Taylor’s report on the gig economy – emergent themes

Uber and the Gig Economy – is the law keeping up?

After a preliminary hearing spanning seven days (including reading the five-volume bundle and time for deliberation), an Employment Tribunal has handed down its much anticipated ruling that Uber drivers are workers rather than independent contractors. The drivers can, therefore, benefit from statutory protections, such as 5.6 weeks’ paid annual leave each year, a maximum 48 hour average working week (in the absence of an opt-out), rest breaks, the National Minimum Wage, potentially the National Living Wage, and the protection of the whistleblowing legislation.

The Tribunal examined in detail Uber’s business model but rejected Uber’s assertion that it is a provider of technology services rather than transportation services. Passengers can order a taxi via Uber’s smartphone app and Uber’s drivers can then decide (with the extent of the autonomy of such decision one of the factors questioned in this case) whether to drive that passenger to their requested destination and, if they do, the route to be taken. The passenger pays the fare to Uber by credit or debit card, Uber takes a 25 per cent service fee, and pays the balance of fares to the driver on a weekly basis.

The Tribunal looked at various aspects of the arrangement as it operates in reality, rather than as described in Uber’s contracts, to determine whether the drivers are workers as opposed to truly independent contractors. For example, the Tribunal noted the fact that, if a driver declines three trips in a row whilst logged on to the app and so ostensibly available to work, he will be forcibly logged out of the app for 10 minutes. The Tribunal also took note of the fact that Uber prohibits drivers from agreeing with the passenger a fare which is higher than that set by Uber and that Uber usually bears the cost of any cleaning necessitated by a passenger soiling a vehicle.

In summary, the Tribunal concluded that Uber is a taxi service and employs drivers to provide that service in a way which, in a number of key respects, Uber controls. Consequently, the Tribunal held that each of the drivers in this case fell squarely within the statutory definition of a worker as an individual who works under a contract to personally perform services for another party to the contract (Uber) which is not a customer of a business undertaking carried on by the individual. However, we note that this contract did not actually exist (in the sense that no such express agreement had been put in place) but had to be inferred by the Tribunal from the facts as found by it. It may be that the scope for doing so will be one of the grounds on which Uber appeals against the Tribunal’s judgment.

The Tribunal went on to find that, whilst the drivers are under no obligation to switch on the app through which their instructions are received and there is no prohibition against dormant drivers, once the app is switched on, the driver is in the territory where he is licensed to operate and he is able and willing to accept assignments, he is then on working time until one of those conditions ceases to apply.

For the purposes of the National Minimum Wage Regulations, the Tribunal stated that the work carried out by drivers does not constitute “time work” or “output work”, as the driver’s entitlement to pay is not limited to when he is carrying a passenger and does not depend on him completing a particular number of trips. Accordingly, the work was classified as “unmeasured work”, so it is likely that the relevant rate of pay will be calculated by reference to the periods of time when the driver is logged on to the app in his licensed territory and ready to accept passengers, rather than just the time spent driving passengers to their destinations.

This decision is extremely fact specific. Furthermore, Uber has already announced its intention to appeal against it. The outcome is likely to have wide-ranging implications for the concept of the gig economy, the proponents of which claim that it benefits individuals who want the flexibility to work how, when and for whoever they please, in an increasingly interconnected and digitally virtual employment sphere.

The employment landscape is changing rapidly and the challenges to the existing statutory framework presented by the Uber case could be seen as demonstrating that the law also needs to change in order to keep up. In support of its decision, the Tribunal cited an earlier judgment which identified the underlying policy behind the definition of “worker” as the need to extend statutory protection to individuals who are vulnerable to exploitation in the same way as employees. Whilst this is clearly not a new issue, as is evidenced by some of the previous case law referred to in the Uber judgment, perhaps in light of the rise of the gig economy, such policy needs to change and the law, therefore, needs to change with it.

Uber and the Gig Economy – is the law keeping up?

Former head of Blair’s policy unit appointed to review workers’ rights

Theresa May has appointed Matthew Taylor, the former head of Tony Blair’s Number 10 policy unit, to conduct a review of workers’ rights and practices. The review comes in light of concerns over the “gig economy”,  zero-hours contracts and several high profile investigations into working practices of large companies. The aim of the review is to create a new framework of rights for workers who do not work in traditional “nine-to-five” roles. Employers should keep an eye on this review, which may mean that changes must be made to their business hiring practices in due course. We also predict a sizeable impact on self-employed contractors and freelance workers, as well as tech companies operating apps which connect contractors directly with customers. Please check our blog for more insights into this review, as and when they become available.

Former head of Blair’s policy unit appointed to review workers’ rights