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Uber Update - What's happened since?
15 November 2016

Following the recent Uber judgment where their drivers were held to be workers and not self-employed contractors, we now see Deliveroo riders taking a similar stance and seeking union recognition and workers’ rights.

Two casual working arrangements that have become ever more popular are the ‘gig economy’ and zero hours contracts. In the gig economy an individual is a self-employed contractor and paid ‘per gig’ with no entitlement to holiday or sick pay (the model operated by both Uber and Deliveroo).  On a zero hours contract an individual is engaged as a worker (with no guaranteed work) and will receive holiday pay. Both bring little job security but maximum flexibility.

As workers, the Uber drivers will have more rights than previously, but not equivalent to if they were found to be employees.  The drivers will be entitled to receive benefits such as paid holiday, the national minimum wage, the maximum working week, and the protection of whistleblowing but they will not be entitled to claim unfair dismissal or other rights that come with employment status. This was a first instance decision and so it is not yet binding on future cases but even so, it has blurred the lines between workers in the gig economy and those on zero hours contracts. There is no strict definition of the gig economy and as the two have been brought closer together it is anticipated that the latest government inquiry will help to clarify the position.    

The Business Energy and Industrial Strategy Committee has launched a review of working practices in response to two of the Committee’s previous inquiries - the working practices at Sports Direct and the Digital Economy. Media coverage from agency workers at ASOS and couriers at Hermes has also played a role in highlighting the lack of protection for certain workers. The inquiry will look at job security, pay and workers' rights and conditions. The inquiry will be open to written submissions until 19 December 2016. You can find the Terms of Reference for the inquiry here.

The Independent Workers Union of Great Britain (IWGB) has written to Deliveroo for recognition for the union to bargain on behalf of the group and negotiate pay and terms and conditions. Whilst this method will be a much more cost effective way of challenging their status than going to Tribunal, if Deliveroo refuse to enter into a collective consultation the union may feel it has no other choice.

The reaction to the Uber decision has been generally positive; however the reality is that many individuals enjoy the flexibility that the gig economy affords. This ruling increases the cost to organisations of operating with gig workers, which could make this model less attractive and there could be less positions available.

Uber are planning to appeal the decision so this is not the last we have heard from this case or this issue, so watch this space for further updates.

For more information about this issue or to find out more about how the Employment team can help you, please contact the team on 0118 952 7284 or email [email protected].

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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