The Government and the Gig Economy: What happens next?

Remember last year’s Taylor Review of modern working practices?  The study was focused on the emerging gig economy, and commissioned by the government to help them understand the impact of casual working, self-employment and working through digital platforms on workers, and what measures – if any – were needed to protect these workers.

The unions and those from the left felt the Review was a damp squib.  Nevertheless, the government has now launched four consultations on the back of it, looking at different but related areas of employment:

1. Employment Status
2. Increased Transparency in The Labour Market
3. Agency Workers
4. Enforcement of Employment Rights

The Consultation Documents run to between thirty-eight and fifty-five pages each and pose dozens of questions, with deadlines for those who wish to comment and respond occuring in May and June.

Having ploughed through the paperwork myself, I’m left with the overwhelming sense that ‘consultation’ or not, the government has already made up it’s mind on which way it is going with this.

Quite simply, it is too big a job to start from scratch and create legislation that suits the modern 24/7 economy.  So instead, the plan is to tweak rules that were created back when most people worked set hours on factory production lines.

It means the government finds itself occupying a narrow strip of land:  being eroded on one side as it attempts to maintain the UK’s ability to deploy a modern and flexible workforce and on the other by accusations that a lack of action is allowing the value of that workforce to be diminished through a loss of employment rights.

Introducing the dependent contractor

The consultations herald a new, beefed-up version of ‘worker’ status called ‘dependent contractor’ which will sit between employed (full rights) and self-employed (no rights).   The overall ambition is to improve the rights of those in insecure and/or casual work.

Dependent contractors will be entitled to a higher minimum wage, holiday pay and the right to ask for regular hours.  Status will move away from two of the three key tests – personal service and mutuality of obligation – towards supervision, direction and control (SDC).  Contractual arrangements will need to be clearer, enforcement of Employment Tribunal awards more simple, and bad employers who break the rules will be named and shamed.

The TUC has already delivered its verdict:  the shake-up doesn’t come anywhere close to the benefits and protections the unions believe those who choose to work in the gig economy should receive.

Hudson Contract’s view

Given that we have always been clear about our contractual terms, that we introduced a Plain English declaration more than ten years ago, implemented SDC tests in 2014, and make payments to operatives who, on average, demand more than double the national minimum wage I don’t anticipate any of these consultations will have much impact on us, our clients, or the thousands of operatives who choose to sell their services through us.  Yes, there will probably be more red tape, but that’s about it.

As always, we will monitor developments, assisted by our team of specialist advisors, and will keep you informed as events unfold.  In the meantime, if you have any questions or concerns, don’t hesitate to contact us.

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