Have you heard of the Gig Economy? It is a term used to describe an economy where independent workers make a living from short term employment contracts with organisations.
The rise of the Gig Economy
According to financial software company, Intuit, 40% of American workers will be independent contractors by 2020. This trend will likely be reflected here in the UK, as workforces around the globe become increasingly able to complete work from anywhere with an internet connection.
A stereotypical view of the British labour market could be described as heavily unionised public sector workers, with ample pay and bountiful pensions. However, the wave of tech-savvy millennials entering the workforce has led to a fall in traditional jobs, as new software can now automate tasks and replace employees for a fraction of the cost. Unfortunately, this poses a threat to job security which may explain the increase in freelancers and self-employed workers in this digital age.
What can employers expect to see?
The cultural shift towards a more independent workforce has given rise to companies such as Uber, Deliveroo and Etsy. They provide platforms for customers and providers to exchange products and services for money.
One of the main attractions for employees is to improve their work-life balance. Therefore, employers may expect to see more requests from their staff to reflect this economic transition, particularly regarding more flexible working hours. This new demand reflects the natural evolution of our working practices, as the millennial generation reportedly value flexibility over status and income.
What are the legal loopholes?
As more individuals choose to operate as self-employed contractors, freelancers may be exposed to exploitation from large companies. Many could expect them to work to their terms, yet provide no employment benefits.
However, after the recent employment case between Uber and its drivers, it is clear that the law will look to protect workers’ rights. Now that the ‘gig’ is up for Uber, and their contractors have been granted holidays and the National Minimum Wage, the future of contractors in the gig economy looks remarkably brighter. Employers who offer ‘peer-to-peer’ services like Uber should now stay vigilant for future developments of the law. As we move forward contractors may be granted further employment rights when new cases are brought before the Tribunal.
Another example of the gig economy contractors involves the courier firm, Deliveroo. They recently hit the headlines by, allegedly, requiring couriers to sign contracts which not only confirm that they are self-employed but also provide that they will pay Deliveroo’s legal fees if they challenge the contract or their rights in the Employment Tribunal. In this sense, it is important that potential gig workers are aware of their employment rights. They should seek legal advice if they are unsure about the consequences of waiving their privileges.
The next step
It is clear that changes to the current legislation will be necessary to meet the demands of our evolving economy. However, employers should not lose sight of the fundamental principle – always treat employees fairly. Whether they are employed or contracted, applying this strategy to your workforce should be the best course of action.
This blog has been written by one of our Legal Apprentice, Jack Kelly.