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Managing a flexible workforce

With Christmas on the way (a busy time of year in many sectors – including hospitality) Big Hospitality has published our article on three key ways to manage a flexible workforce.  Please do have a read here – the principles can be applied to other types of flexible workforce too.

Managing a flexible workforce

Uber loses appeal on worker status

In the continuing worker status saga, Uber's recent appeal against the Tribunal ruling that its drivers are workers, rather than self-employed individuals, has been dismissed by the EAT.
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Uber loses appeal on worker status

People Management article, featuring Michael Bronstein

As you may have seen, People Management recently published an article on some of the big developments in employment law in 2017, particularly Brexit and the Taylor review. The discussion featured Michael Bronstein, a partner here at Dentons. Michael gave some insight on the potential effects of withdrawing from the EU on employment legislation, acknowledging that there is 'a common misconception that all employment rights are created by the EU'. In the lead up to triggering Article 50, the government maintained that there would not be any change to workers' rights following Brexit, so it would be brave to take away key protections, many of which derive from UK law anyway. Other commentators suggested there may be reforms to TUPE, although agreed that it will stay, but perhaps in a slightly amended form. As for a new visa regime for workers, the outcome is unclear. The uncertainty has already caused many workers to leave at a time where we are beginning to see a shortage of labour. This has not been helped by the recent leaked Home Office post-Brexit Immigration Policy which has confirmed the fears of employers with respect to the future of EU workers in the UK.
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People Management article, featuring Michael Bronstein

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.
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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.
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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?