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Gig economy

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By Patrick Stewart

Well known companies such as Uber and Deliveroo are examples of organisations which are part of the new ‘gig economy’. Growing numbers of people are working “gigs” where they are employed for a particular task or for a specified time, whether this be as their main occupation or as an additional job to earn extra income. People involved in the gig economy have little connection to their employer and are not protected by the same rights as an employee with a contract of employment. On the other hand, working in this industry does provide the worker with a great deal of flexibility in being able to choose the hours they work.

Under the traditional employer-employee relationship, an employee working under a contract of employment benefits from the following rights:

  • Being paid at least the minimum wage

  • Sick pay

  • Maternity/paternity pay

  • Holiday pay

  • Workplace pension

  • Job security

  • Rights under the Employment Rights Act 1996

Until recently, it has been the position that those working in the gig economy are not classed as workers and so do not benefit from such rights. However, the recent case brought against Uber by its drivers has proven to be a landmark case in recognising that such workers do have rights similar to employees under a contract of employment. The ruling by the Employment Tribunal means drivers are now classed as workers rather than self employed and entitled to holiday pay, paid rest breaks and the national minimum wage. It is not yet clear what impact this will have on the thousands of people working in the gig economy.

As a result of the increased number of people working in the gig economy, the government has announced that it is due to launch a research project to reveal the scale of gig working and the reasons people take it up. The announcement follows the Prime Minister commissioning Matthew Taylor, the Chief Executive of the Royal Society of Arts, to review the impact of these new business models. The Taylor Review into Modern Employment Practices has announced that they will travel the country talking to employees about the UK’s labour market. It is not known when the review is due to commence but is expected to take 6 months.

For further information, please contact patrick.stewart@twmsolicitors.com

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