By Katie Ash, Head of Employment Law at Banner Jones solicitors (www.bannerjones.co.uk)
Many hospitality businesses have turned to freelance restaurant deliverers through the pandemic with takeaways the only option. Meanwhile, individuals who have found themselves out of normal front-of-house work turned to flexible jobs as their only source of income.
But where do you stand when taking on casual workers and what do you need to be aware of?
A recent case involving ride-hailing firm, Uber, highlights the need for businesses to treat certain workers as full employees. In this article, Katie Ash from Banner Jones solicitors explains the significance of its outcome for business owners connected to the gig economy.
On the 20th February 2021, the Supreme Court handed down its Judgment in the long-awaited Uber case (Uber BV and Others v Aslam and Others). All six Judges unanimously ruled that the Uber drivers were workers, not self-employed contractors and as a result were entitled to basic employment rights like National Minimum Wage, holiday pay and sick pay.
WHY IS THIS CASE IMPORTANT FOR THE GIG ECONOMY?
In 2019, it was estimated by the TUC that over 5 million people were employed in the Gig Economy and it would be fair to assume that this figure has risen because of the pandemic and the increased reliance on delivery drivers for example.This illustrates the potential number of workers who will be looking at the Uber case and questioning their own employment status. For any employers relying on casual contracts it could mean an increased risk of expensive claims where the employment relationship is not clear.
In the UK there are currently three different types of employment status:
1.Employees – they have the most employment rights and are afforded the most protection by employment law. Whilst employees have more labour security, the employer has more control over when, where and how the work is carried out.
2.Workers –they have more flexibility over how they work and some basic employment rights and protection, such as the right to be paid the National Minimum Wage, holiday pay and sick pay.
3.Self-Employed/ Contractors –they have very little employment law protection but should, in theory, have full con- trol over the terms upon which they carry out their services (and the most symptomatic of the Gig Economy).
Simply labelling someone as a self-employed contractor does not make them self-employed if, in reality, they are being treated as a worker or an employee with little self-control of how they carry out their services. Uber has found this out to its detriment and, no doubt, at a huge cost when the Employment Tribunal deter- mines how much compensation the Uber drivers should now be awarded.
The Uber Judgment comes at a key time following the recent review of the Gig Economy, in the Government commissioned Taylor Review.This review resulted in the Good Work Plan that came into force in April 2020. The aim of the Good Work plan is to secure a better balance between flexibility and employment rights. Part of this protection is to ensure that all workers are given a statement by their employer on the first day of their relationship, confirming what their status is and what their terms and conditions for undertaking work will be.
Following the Uber Judgment and in line with Taylor’s Good Work Plan employers in all industries, not just the Gig Economy should be ensuring that their contracts are up to date and that the right ‘label’ has been correctly applied to the relationship. Employers need to ensure that the contract terms are provided on day 1, as this is now mandatory in all cases, and could lead to claims for failure to provide them.
Many employers have understandably been preoccupied with the pandemic since the Good Work Plan came into force last April, so it may now be a good time for employers in all sectors to review their employment contracts.
Whether you have short-term delivery drivers or casual support from your team, the Banner Jones employment law team can help make sure your firm is fulfilling its duties as an employer.
