Rights and wrongs of the gig economy

GIG was once a word that musicians or bands used to describe a performance. When I was a student, it was a word used to describe waitressing or bar work at evenings or weekends.

You might work a few of these gigs a month alongside your studies to earn a bit of cash. You worked hard for a night, got paid, then promptly spent the money on a night out of your own.

These were not jobs. They were short-term engagements, with no commitment on either side, that you did before you got an actual job.

According to companies like Uber and Deliveroo, this is precisely the flexible arrangement that the people who work for them have.

As little or as much work as people want, when they want it, with no commitment, on a self-employed basis. Technology makes this kind of working arrangement viable.

Gigs can be offered and accepted or refused with just a few swipes on a smartphone and the end-user notified that the service they have requested is on its way.

But gig work has turned into the gig economy. This means people working full-time but always on a selfemployed gig basis, getting paid on the basis of each piece of work they do but never getting an actual job. Which means never becoming entitled to benefits such as holiday pay or the minimum wage.

However, it’s been a confusing recent period for the gig economy.

At the start of this month Uber lost its appeal in the Employment Appeal Tribunal (EAT) against a decision of the Employment Tribunal that their drivers were workers. “Worker” is a different status to “employee”, but workers get holiday pay and minimum wage.

Uber argued that the drivers were self-employed, doing the work for the passengers, and that all Uber did was act as agent. The EAT agreed with the Employment Tribunal that the drivers worked for Uber, having no direct contact with passengers.

While they could refuse gigs, they would lose their account status if their acceptance rate fell below 80%. Further, they had to undertake the work personally, with no right of substitution.

Uber drivers are now entitled to minimum wage and holiday pay but Uber has announced it will appeal.

On November 14, the Central Arbitration Committee (CAC), a different forum to the Employment Tribunal, decided that Deliveroo drivers were not workers but self-employed.

The the Independent Workers of Great Britain Union (IWGB) had asked that Deliveroo recognise them as the union, but Deliveroo had refused on the basis that the drivers were not workers but self-employed.

The CAC agreed with Deliveroo that the drivers, who sign a supplier agreement with the firm, are self-employed. The terms of the agreement include being able to refuse gigs and the right to substitute others to do the work. The CAC found some riders do very little or only intermittent work for Deliveroo, while others take as much work as possible. Drivers are not penalised for refusing work.

The CAC also found that the right to substitute, even though not often used in practice, was not a sham and this was key to its decision that Deliveroo drivers, unlike their Uber counterparts, are self-employed.

I don’t act for any gig economy businesses. But I do act for lots of firms with self-employed consultants and for lots of self-employed consultants who provide those services. What I take from these two decisions from a legal point of view is that every consultancy contract should include the right of substitution.

From a personal point of view, I consider people deserve to get paid at least the minimum wage for the work they do and get paid holiday. Deliveroo had said before the CAC decision that it would cost £1 more per delivery if drivers were found to be workers and not self-employed.

To me, that doesn’t seem too high a price to pay to be able to look in the eye the person delivering your meal to your desk or to your home.

Bethan Darwin is a partner with law firm Thompson Darwin.