Does Hermes’ Union Deal Predict the Future of Gig Economy Workers’ Rights in the UK?

Does Hermes’ Union Deal Predict the Future of Gig Economy Workers’ Rights in the UK?

In a deal reached earlier this month with one of the UK’s largest trade unions, the courier company Hermes is offering its self-employed drivers the option to obtain some of the rights enjoyed by regular employees, including a guaranteed minimum wage and holiday pay, the Guardian reported:

Under the agreement with the GMB union, Hermes’ 15,000 drivers will continue to be self-employed but can opt into contracts with better rights. The deal comes after almost 200 Hermes couriers won the right to be recognised as “workers” at an employment tribunal last summer in a case backed by the GMB. Under employment law, “workers” are guaranteed rights including holiday pay, the legal minimum wage, minimum rest breaks and protection against unlawful discrimination.

The GMB has been active in advocating for the rights of British workers in the gig economy, also backing similar labor tribunal cases against other companies operating on an independent contractor model, including Uber, which lost a landmark case in 2016. Other British unions and union federations have also supported claims regarding the rights of gig economy workers, with tribunals ruling in favor of the workers in most of these cases. The settlement reached this month means that Hermes will drop its planned appeal against the ruling last year, while the GMB will refrain from pursuing further litigation against the company.

The “worker” classification in UK employment law defines a space between employees and the self-employed, but the tests for classifying workers as such are primarily defined by case law and increasingly unclear as technological shifts have brought about changes in the way people work. The Taylor Review of modern working practices recommended in its 2017 report that the government relabel “workers” as “dependent contractors,” write a clearer definition of this category into law, and make it the default status for companies that have a self-employed workforce above a certain size. The government said last year that it would adopt most of the review’s recommendations, but did not commit to writing this “worker by default” model into law.

Yvonne Gallagher, A partner at the London-based law firm Harbottle and Lewis, commented to Personnel Today that the Hermes deal would raise some questions about these drivers’ tax and national insurance obligations:

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New Studies Challenge Conventional Wisdom on Gig Economy, Skills Gap

New Studies Challenge Conventional Wisdom on Gig Economy, Skills Gap

Over the past decade, particularly in the US, there has been considerable debate over whether the labor market trends we were seeing represented fundamental shifts in the economy or business-cycle responses to the Great Recession that followed the 2008 financial crisis and the long, slow recovery. In new studies, two of these trends—the skills gap and the gig economy—are reconsidered in light of new data, with researchers finding that phenomena they once thought were secular may actually have just been products of the recession after all.

Economists Alan Krueger and Lawrence Katz made headlines in 2016 when they released the results of a survey they had conducted the year before, which found a major jump in the number of Americans making a living in “alternative work” arrangements (i.e., not in regular, full-time employment), though gig economy platforms like Uber made up a small fraction of this contingent labor market. At the time, Krueger and Katz found that around 16 percent of the American workforce were engaged in this type of work, compared to 10 percent in 2005. Follow-up work indicated that alternative work accounted for almost all of the jobs created since 2005.

Now, the leading economists of the gig economy say their initial study overestimated its impact, the Wall Street Journal reported this week. In a new paper, Krueger and Katz look at new evidence and conclude that their 2015 survey overstated the size of the contingent workforce because of a weak labor market and the impact of the recession. Many of the alternative jobs they counted were stopgap jobs people took to make ends meet while they were unable to find full-time work. Once the economy and their job prospects improved, these gig workers returned to more traditional employment. The vast difference in the health of the US economy between 2005 and 2015 skewed the data.

Accordingly, the economists now revise their estimate of the growth of alternative work during that period to a 1 or 2 percentage-point increase, not 5. This brings their findings more in line with other recent studies that have painted more modest pictures of the gig economy—including the Bureau of Labor Statistics’ 2017 Contingent Worker Supplement survey, which claimed the alternative workforce had actually shrunk since the last time the survey was conducted in 2005. At the same time, Krueger and Katz argue in their new paper that the surveys used to measure alternative work arrangements, including those conducted by the Labor Department, are seriously flawed (the huge gap in the BLS data due to the dozen years when the survey wasn’t conducted is part of the problem).

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UK Unveils Labor Reform Package Based on Taylor Review Recommendations

UK Unveils Labor Reform Package Based on Taylor Review Recommendations

The UK on Monday enacted a sweeping series of reforms to its labor laws, raising fines on employers for deliberately harming their workers and obliging them to give employees details of their legal rights from their first day on the job, among other changes. Based on the findings issued last year by the Independent Review of Employment Practices in the Modern Economy, led by Matthew Taylor, a former advisor to Tony Blair, the reforms are intended to strengthen the rights of agency workers and those participating in the gig economy, as well as to step up enforcement of existing labor protections. According to Personnel Today, the new legislation will:

  • repeal the Swedish derogation, which allows organisations to pay agency workers on cheaper rates than permanent staff;
  • extend the right to a written statement of rights from a person’s first day in their job to workers, going further to confirm their eligibility for sick leave and pay, as well as other types of paid leave including maternity, paternity and shared parental leave;
  • quadrupling the maximum fines handed out at employment tribunals to employers that have shown malice, spite or gross oversight from £5,000 to £20,000;
  • extending the holiday pay reference period from 12 to 52 weeks to ensure that those in seasonal roles are able to take the time off they are entitled to; and
  • lowering the threshold required for a request to set up information and consultation arrangements from 10% of employees to 2%.

In a report called the “Good Work Plan,” the government also pledged to enact further legislation so that employment classification tests “reflect the reality of the modern working relationships.” The Taylor Review had recommended that the employment status currently known as “worker” be renamed “dependent contractor” and that workers in this category be entitled to employment protections like the minimum wage, sick leave, and holiday pay. It also recommended enacting legislation to clarify the legal tests for different employment classifications, rather than relying on case law as the UK currently does.

The government’s reform package did not, however, ban the controversial practice of zero-hour contracts. Taylor had concluded that abolishing these contracts would do more harm than good, though his review also recommended that workers in zero-hour arrangements be entitled to request guaranteed hours after working for their employer for 12 months. The government of Ireland, in contrast, has said it plans to end most zero-hour contracts with a bill expected to pass the legislature in the spring. Whitehall’s decision not to ban zero-hour contracts drew criticism from unions, the Guardian reported on Sunday, with Trades Union Congress general secretary Frances O’Grady saying the government had missed an opportunity to strengthen the rights of a vulnerable segment of the workforce:

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ReimagineHR: Gig Economy Strategies for Mobilizing Talent Inside Your Organization

ReimagineHR: Gig Economy Strategies for Mobilizing Talent Inside Your Organization

When we think of the “gig economy,” we usually think of platforms like Uber, Deliveroo, Fiverr, or Freelancer.com, which offer users flexible, contingent work on a piece or project basis. Taking a broader view, however, the advent of the gig economy has also had an impact on the way traditional employers think about meeting their talent needs. In our research at Gartner, over the past several years we have seen a number of organizations experiment with new models of hiring, engaging, and assigning workers, inspired by the gig economy. At our ReimagineHR event in London last week, Gartner Practice Leader Thomas Handcock walked HR leaders through several of these models and discussed how they might leverage them in their organizations as well.

Internal Career Marketplaces

Compelling career paths and opportunities to learn and grow within the organization are increasingly important aspects of the employee value proposition, particularly—though by no means exclusively—for Millennial employees. The stereotype of the Millennial job-hopper reflects the notable desire among employees of this generation for a greater variety of experiences in their careers. If your organization can’t offer employees this range of experiences and opportunities to acquire new skills, they are likely to seek them elsewhere: Lack of development opportunities is among the leading drivers of attrition for employees worldwide, Gartner’s Global Talent Monitor data show.

To address this demand for development and variety, innovative employers are making it easier for their workers to find their next job within the company rather than outside it, through internal career marketplaces. These marketplaces, which at companies like HCL Technologies operate through digital platforms, can help employees plot their career paths and understand what internal moves they need to make to reach the position they desire. This allows them to develop their careers more rapidly or grow in new directions more easily without changing employers. For the employer, these internal labor markets offer an effective way to retain and develop high-potential employees. Internal hires for new roles also require less onboarding and come with the benefit of pre-existing institutional knowledge and alignment with the organization’s culture. (Gartner Corporate Leadership Council members can learn more about HCL’s Career Connect portal in our case study.)

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Study Reveals Difficult Work Conditions Among Freelance Platform Workers

Study Reveals Difficult Work Conditions Among Freelance Platform Workers

A newly-published study from scholars at Oxford University investigates the situation of the estimated 70 million people around the world who make their living in the gig economy through freelancing platforms like Freelancer.com and Fiverr. Through a combination of face-to-face interviews and a remote survey of digital freelancers in Southeast Asia and Sub-Saharan Africa, the authors gauged how workers in this substantial segment of the global economy felt about the advantages and disadvantages of this kind of work. TechCrunch’s Natasha Lomas outlines the study’s key findings:

The study paints a mixed picture, with — on the one hand — gig workers reporting feeling they can remotely access stimulating and challenging work, and experiencing perceived autonomy and discretion over how they get a job done: A large majority (72 percent) of respondents said they felt able to choose and change the order in which they undertook online tasks, and 74 percent said they were able to choose or change their methods of work.

At the same time — and here the negatives pile in — workers on the platforms lack collective bargaining so are simultaneously experiencing a hothouse of competitive marketplace and algorithmic management pressure, combined with feelings of social isolation (with most working from home), and the risk of overwork and exhaustion as a result of a lack of regulations and support systems, as well as their own economic needs to get tasks done to earn money.

Augmenting the competitive nature of the digital gig economy, the study found, is an imbalance of supply and demand for these workers’ labor: More than half the workers surveyed said there was not enough work available to them. People performing low-skilled tasks on these platforms must take a large number of gigs to earn an adequate income through them.

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New York Caps New Ride-Share Licenses, May Establish Minimum Wage for Drivers

New York Caps New Ride-Share Licenses, May Establish Minimum Wage for Drivers

The New York City Council passed legislation on Wednesday to put a one-year cap on for-hire vehicle licenses and to empower the city government to set a minimum wage for ridesharing drivers, in a crackdown on the largely unregulated growth of platforms like Uber and Lyft, the New York Times reported:

The proposal to cap ride-hail companies led to a clash among interest groups with taxi industry officials saying the companies were dooming their business and Uber mounting a major advertising campaign to make the case that yellow cabs have a history of discriminating against people of color.

Mayor Bill de Blasio and Corey Johnson, the City Council speaker, said the bills will curtail the worsening traffic on the streets and improve low driver wages. … But Uber has warned its riders that the cap could produce higher prices and longer wait times for passengers if the company cannot keep up with the growing demand.

New York is the largest market for Uber in the US, but already regulated ridesharing more stringently than many other American cities. To address concerns about unfair competition from the local taxi industry, New York requires drivers to obtain special licenses from the city’s Taxi and Limousine Commission, along with commercial liability insurance and special plates for their vehicles, which must meet certain eligibility criteria.

The new will not affect Uber and Lyft drivers who are already licensed to operate in the city, but will pause the issuing of new licenses immediately while the city studies the effects of the rise of ridesharing on traffic, driver wages, and the local economy.

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India’s Agile Talent Market Grows as More Professionals Seek Project-Based Work

India’s Agile Talent Market Grows as More Professionals Seek Project-Based Work

Short-term assignments are becoming more popular among skilled professionals in India, the Economic Times reported this week, with an emerging “white-collar gig economy” in IT implementation, marketing, design, and other fields reflecting these professionals’ desire for more flexibility and control over their careers:

It’s early days, but as more Indians opt for new work arrangements, interest is growing across age and experience brackets. Leading the charge are young employees with five-plus years of experience, confident in their abilities to do well even without the cushion of a permanent job, and mid-career people who have built up a nest egg and now want more flexibility and a work-life balance. …

Three months ago, EY launched GigNow, a tech platform that connects people seeking short-term employment options or flexibility with EY in India. Sandeep Kohli, national director for HR at EY, told ET that over 70 such jobs are on offer on the platform and almost 700 people have applied. Initially, it started with consulting and now it has added finance and HR gigs. The next step is to launch a GigNow for women.

While Indian professional culture has historically put a premium on strong ties between employees and their employers, times are changing. Indian Millennials, like young professionals around the world, are putting greater emphasis on autonomy and work-life balance. Greater flexibility is also seen as a key tool for encouraging Indian women to remain in the workforce after having children. To that end, Indian entrepreneurs are establishing online recruiting platforms and coworking spaces specifically geared toward connecting women with flexible work or facilitating the launch of their own businesses.

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