The 'gig economy' speaks of freedom to hire who you need when you need them, or to take whatever job suits your personal preferences. However, the reality is somewhat different for many people. Often low-skilled low-paid workers, desperate for work, take positions without any job security because these are the only jobs that are available. Many of the 15% of working people in the UK who are self-employed do not choose to work on a self-employed basis.
This situation is a creation of the law, not employers or the people who work for them. Don’t blame the people or companies that work within the law. The wider problem is that employment law is not keeping up with changes in the workplace, which is perhaps hardly surprising given the pace of social and economic change when compared with the process of creating and changing laws though parliament or the courts.
The problem is well-illustrated by the recent employment tribunal ruling that Uber drivers are 'workers' eligible for a range of statutory rights and protections not available to the self-employed, such as national minimum wage and paid annual leave. It found the idea that "Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ …faintly ridiculous”. Legally the tribunal may be right or wrong, but purely factually it seems difficult to say that this is a ridiculous characterisation of the way Uber works. These are fine margins for an important issue.
English employment law rests on the theory that parties enter into contracts to determine their rights and obligations, save to the extent that parliament imposes rights and obligations that supersede what has been agreed. The majority of things most working people and businesses consider to be their rights and obligations are creations of statute, not contract. And yet how the law categorises that contract still determines whether and the extent to which statute confers rights and obligations on the parties. So even statutory protections such as unfair dismissal nonetheless deny all workers except employees the right not to be unfairly dismissed.
But should an employee be more entitled to this protection than a worker or a self-employed contractor? The accepted wisdom is that there is not true freedom of contract between employers and employees because of the disparity in bargaining power, and employment terms are in practice imposed and not negotiated. However, the idea that there is such equality of bargaining power just because the contract that has been concluded is called something other than a contract of employment is completely misguided.
There are large numbers of people asked to either take or leave increasing varieties of contract that are not employment contracts, and while some are protected others are not. Try providing professional services to large multinational organisations and there will usually be very little room for deviation from their standard terms, but there is rarely employment or worker protection. Meanwhile drivers choosing to turn on an app and pay for its use are protected.
If the problem with the gig economy is that there's an inconsistency between the categories of people who are protected and those who are not, this problem is entirely a creation of the law. We need a different basis to determine who is and is not protected by the wide range of statutory protections than outmoded labels.
Dan Peyton is managing partner and employment lawyer at McGuireWoods
