UK Lawmakers Push Gig Economy Workers’ Rights, Deliveroo Wins Classification Ruling

UK Lawmakers Push Gig Economy Workers’ Rights, Deliveroo Wins Classification Ruling

The Work and Pensions and Business Committees in the UK Parliament have unveiled a bill meant to close what its supporters call loopholes in current law that let employers misclassify employees as self-employed as a means of saving labor costs and evading their legal responsibilities to those workers, Sky News reports:

It says personnel should be classed as a “worker by default” to ensure access to basic rights such as sick pay because hundreds of thousands are currently being “burdened” by risks associated with flexible working. …

Labour’s Frank Field, who chairs the Work and Pensions Committee, said: “The two committees are today presenting the Prime Minister with an opportunity to fulfil the promise she made on the steps of Downing Street on her first day in office.” He said the draft Bill “would end the mass exploitation of ordinary, hard-working people in the gig economy.”

Opponents of the bill, such as the Confederation of British Industry, say it is shortsightedly cracking down on all forms of flexible employment. As the CBI’s managing director for people and infrastructure Neil Carberry put it to Sky News: “Based on a very limited review of the evidence, the committees have brought forward proposals that close off flexibility for firms to grow and create jobs, when the issues that have been raised can be addressed by more effective enforcement action and more targeted changes to the law.”

Over at Personnel Today, Jo Faragher digs deeper into the bill, which also recommends:

  • Clearer statutory definitions of employment status: “This legislation should emphasise the importance of control and supervision of workers by a company, rather than a narrow focus on substitution, in distinguishing between workers and the genuine self-employed.”
  • Pay premiums for those with non-guaranteed hours: The committees recommend that the Government works with the Low Pay Commission to pilot a pay premium on the national minimum or national living wage for those with non-contracted hours.
  • Guaranteed rights after a longer break in service: This would mean extending the time allowance for a break in service while accruing employment rights from a week to a month.
  • Written statement of employment particulars: Employees and workers should have the right to receive, from day one, a clear written statement of employment conditions, within seven days.

The bill comes at a time when the rights of workers in the gig economy have become a hot-button issue in the UK and the subject of some major, controversial rulings in employment tribunals. Just last week, Uber, which considers drivers using its platform to be self-employed independent contractors, lost its appeal of a tribunal ruling that said the drivers were employees and therefore entitled to a minimum wage, overtime and holiday pay, and other protected benefits. Another tribunal ruled similarly regarding the courier platform CitySprint.

Not all UK authorities have come down against gig economy companies, however. Deliveroo, an Uber-like platform for restaurant takeout deliveries, won its case before the Central Arbitration Committee last week when the committee ruled that delivery workers who use Deliveroo are indeed self-employed and not employees of the company, barring them from minimum wage and holiday pay entitlements as well as union representation, Faragher reported last Wednesday:

The CAC, the non-departmental Government body that resolves collective worker disputes, decided that because the riders had the right to allocate a substitute to do the work for them in their contract, they were self-employed contractors.

The case was brought by the Independent Workers Union of Great Britain (IWGB) on behalf of couriers in the Camden and Kentish Town districts of North London. But the right to substitution was “fatal to the union’s claim”, according to the judgment. “In light of our central finding on substitution, it cannot be said that the riders undertake to do personally any work or services for another party,” it said.

At SHRM, Martin Chitty and Connie Cliff, attorneys at Gowling WLG, explain the significance of this ruling, which is not subject to appeal:

It is the finding that the substitution clause was not a sham that is crucial in this case. The CAC state that the factual situation in the Deliveroo case was very different from that in Excel, CitySprint and for Uber private hire drivers. In the case of Dewhurst v CitySprint, the tribunal specifically found that the substitution clause in that case was a sham as the only real option was for a courier to swap jobs with another approved CitySprint courier. In particular, the insurance provisions in the documentation meant a freely chosen substitute could not be used.