EMPLOYMENT STATUS AND THE GIG ECONOMY
The issue of employment status is one which has long tried both employers and employment lawyers alike.
Recent developments in the world of work have added complexity to an already complicated legal issue.
The ‘gig economy’ which has become our new reality means that you can open an app on your phone and in a few easy swipes have a cyclist deliver lunch from your favourite restaurant or a handyman come over to assemble your new Ikea book shelf. For relatively little cost, you can purchase a great deal of convenience.
It’s just that simple… Unless you are an employer.
Because just as we face changes in the ways we do things as technology impacts on our daily lives, employment tribunals must evolve to ensure that they consider how the legal principles that have been developed over a very long time apply in a very different workplace.
In practical terms, there are probably four categories of employers:
- those who have assessed their risk and believe they understand who in their organisation, are employees, who are workers, and who are self- employed contractors and then treat them accordingly;
- those who have assessed their risk and believe they understand who in their organisation, are employees, who are workers, and who are self- employed contractors but would like to pretend some of them do not have employee or worker status;
- those who aren’t sure whether people working for them would be categorised as employees or workers because they haven’t undertaken the exercise (and therefore do not understand the risk); and
- those who are oblivious to employment status and the risk it causes them as an issue.
So why does it matter?
In short, both the cost and risk to the business, and where that costs and risk sits in the business, may be affected by the employment status of the individual concerned. In simple terms, an employee may have more entitlements (and therefore more potential claims against the company) than a worker. A worker, in turn, may have more entitlements (and therefore more potential claims against the company) than a self-employed contractor. And, unfortunately, the label which a company gives to an individual is not necessarily determinative of the case as far as the courts and tribunals are concerned.
Over the course of this blog series we will set out the legal issues at play and provide practical suggestions which might sway a legal case on determining employment status should one arise in your organisation.
