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London Eye: UK goes both ways on the economy

London Eye: UK goes both ways on the economy

London Eye: UK goes both ways on the economy
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By Sanjay Suri  Oct 7, 2021 6:23:38 PM IST (Updated)

The gig economy in the UK has grown substantially through the pandemic

It’s clear that the gig economy in the UK has grown substantially through the pandemic. It’s less clear what the future of gig workers will be given the conflicting legal paths that courts have taken over moves to bring greater protection to gig workers.

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The gig economy simply means “jobs done in exchange for a fee rather than a regular salary,” Gabriel Morrison from the solicitors firm Leigh Day tells CNBC-TV18. Leigh Day has been leading the legal moves to protect workers. In the UK, those workers typically are couriers, carers, taxi companies and the logistics sector, says Morrison.
The last official estimates from 2019 put the number of such workers in the UK around five million, about 10 percent of the workforce in the UK then. The expansion of that workforce through the pandemic is considerable, though no reliable numbers have been put to it, even by estimation.
“There are two aspects to this,” says Morrison. “First, those labelled independent contractors, that give these people no employment rights, so that can mean no rights or minimum wage, no protection. The second aspect is what is known as zero-hours workers, who are actually employees for the companies, but they have no minimum obligation in terms of the number of hours or weeks, they don’t know if they are working one day to the next.”
The consequence, either way, is that the workers have “no employment rights, they don’t have rights to national minimum wage, the right to holiday pay, the right to protection from discrimination, the right to claim that you’re not unfairly dismissed. So a worker who may raise a complaint about their working conditions lives in fear that their work is removed.”
The very nature of such work means that those doing it are scattered and unorganised, and lack therefore a platform from which to seek rights collectively. The old unions express themselves over these workers but have failed to become an effective voice for them. That campaign has been taken up by some legal firms acting more for a cause than a fee.
That has brought some remarkable successes. The legal firms Leigh Day, Bates Wells and Braithwaite took the lead in acting for Uber drivers. The case was taken up before the Employment Tribunal in 2016 which ruled in favour of the drivers. That decision was upheld by the Employment Appeal Tribunal, the Court of Appeal and finally the Supreme Court last year.
“Uber, having fought that case for a number of years in the court have now affirmed their drivers’ status and introduced minimum wage and holiday pay for the workers along with some other rights,” says Morrison. That covers about 70,000 workers in the UK. Following Uber, successful cases were brought by workers against the courier company Hermes and the taxi company Addison Lee.
Flip Side
“The flip side is that there have been companies that have been successful in defending their business model,” says Morrison. “The most classic case being Deliveroo, who have maintained the status as independent contractors.”
Deliveroo has successfully fought back an appeal by the IWGB union. The court upheld the case of Deliveroo that its staff were rightly classified as self-employed, and therefore not eligible for a string of rights.
One reason that the Deliveroo judgment went a different way to Uber was that the food delivery service operates differently, for example by allowing riders to use a substitute to fulfil a shift. Such details over the level of flexibility appear to have made a difference to the outcome of the case.
The union sought to make a case for the right of Deliveroo staff to form a union but the court held that they have no right guaranteed to do so under the European Convention on Human Rights.
These concerns are being fought out in the UK courts in the absence of a law. “We would like to see tough penalties for companies that avoid their obligations, where a company that is found to have breached the law and not provided their workers their rights to face tough penalties and that can act as an incentive for them to change their models and operate more fairly towards their workers,” says Morrison.
The way that can finally be ensured is through law, says Morrison. “I think it would help for their status to be a bit clearer,” he says. “The present law allows companies to use contracts which avoid certain obligations, so if that could be changed, that may bring about change.”
— London Eye is a weekly column by CNBC-TV18’s Sanjay Suri, which gives a peek at business-as-unusual from London and around. 
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