Employers to face tougher rules on workers' rights

Issue of gig economy workers still live

Companies which fail to protect the rights of their workers will face higher fines and employee rights to sick pay and holiday pay will be more strictly enforced following an announcement by the government.

On Wednesday (7 February 2018), the government said it would be conducting a series of consultations on reforms to employment law with a view to tackling problems within the 'gig economy'. The move follows the publication of the Taylor Reiew in 2017, which examined the regulation of companies such as Uber and Deliveroo. It is expected that Westminster will take steps to crack down on companies which fail meet their legal obligations as employers while the consultations are ongoing.

Currently, gig-economy companies - which are often characterised by classifying their workers as 'self-employed' and a using a 'casual working' model through apps and online platforms - have been accused of deriving the benefits of a large and under-regulated workforce without taking any responsibility for them as employees.

In his review, Mr Taylor proposed a new employment category - "dependent contractor" - to replace the current loosely-defined category of "worker", which exists alongside the protected terms of "employee" and "self-employed".

Ahead of the government announcement, Prime Minister, Theresa May, said: "We recognise the world of work is changing and we have to make sure we have the right structures in place to reflect those changes - enhancing the UK's position as one of the best places in the world to do business.

"We are proud to have record levels of employment in this country, but we must also ensure that workers' rights are always upheld."

However, Tim Roache, general secretary of GMB - the UK's third largest trade union - said the government's response was akin to "trying to put out a forest fire with a water pistol."

Philip Richardson, Head of Employment Law at Stephensons, said: "Before we begin to understand the significance of what is being proposed, it is important to understand the terminology which is being used with regard to the gig economy.

“‘Employee’ is a term with a strict legal definition. Employees are protected from things like unfair dismissal. Equally, employees have the right to take their employer to tribunal to settle any disputes which arise.

“‘Worker’ - on the other hand - is not a strictly defined term and covers a wide range of different working practices. There is a great deal of disagreement over what constitutes a worker and often companies argue that workers are self-employed to avoid having to pay liabilities for workers such as holiday pay. Often, it takes costly legal action to settle individual disputes.

“Critics argue that this uncertainty is being exploited by some gig economy companies who are using technology – such as apps or online platforms – to connect workers to customers without taking any responsibility for the workers as they would with an employee.

“By way of example, both Uber and Deliveroo assert that their workers are self-employed. The issue here is that these workers are wholly dependent on that platform for work, much as a conventional employee is wholly dependent on his or her company for work.

“Under normal circumstances, a self-employed individual is able to look for work on his or her own terms without restriction or dependency.  However, an Uber driver, without access to the Uber platform, does not have this flexibility and would be unable to obtain work.

“Therefore, it would seem that the relationship between these companies and the workers is much more like a conventional employee-employer relationship than they would have us believe.

“One of the recommendations of the Taylor review is that the government should ensure that self-employment is a choice made by the worker, not the employer.

“As we have seen with the recent case against Uber the court will look at the substance of the employment situation, not how someone is defined by the company. It is not enough for a company to simply say that those engaged are self-employed, they must be able to demonstrate that this is the case in practice.

“If they are unable to do this, then it follows that those workers are entitled to greater levels of employment rights and protections."