Wednesday, 1 March 2017

Tribunal rulings threaten bogus self-employment in the gig economy!

City Sprint courier - Maggie Dewhurst
Derek Pattison - President Tameside TUC (in a personal capacity)

The Government has come under pressure to clarify the law on 'self-employment' following a huge increase in the number of so-called 'independent contractors' being employed in the gig economy. As 'independent contractors', workers do not get a regular wage but are paid for the 'gigs' they do, such as delivering food or making a car journey. Typically, contractors are on short-term contracts or freelance work and do not, as independent contractors, qualify for the living wage, sick-pay, pensions, holiday-pay or basic employment rights. They also have to pay their own NI and tax contributions.

Last year, an Employment Tribunal ruled in a case brought  by two Uber drivers, James Farrar and Yaseen Aslam, members of the GMB Union who were represented by the firm 'Leigh Day', that workers who accept these 'gigs' were  not independent contractors but "workers to who certain employment rights are due." In what is seen as a landmark ruling, the tribunal found that they were entitled to the same rights as full-time employees. Uber is currently appealing against the decision on the grounds that it is a technology company and not a taxi firm.

In February, an Uber driver speaking to MPs on the House of Commons work and pensions select committee, told them that although he worked 90 hours per week, he still needed to claim state benefits. Minicab drivers working for Uber, have also stated that after Uber's 20% cut and car expenses have been deducted from their pay, their earnings fall below the minimum wage. It was also revealed at the select committee that the courier 'Deliveroo',  had included a clause in its contracts that forbade riders from challenging their employed status in the courts.

An investigation by the Guardian newspaper, found that some 10,000 so-called "life-style couriers" working for the company Hermes, who deliver parcels for retailers such as 'Next' and 'John Lewis', were earning less than £6 an hour. In January, the delivery firm 'Jinn', based in East London, told its couriers that it was scrapping its hourly rate of £8 an hour for its self-employed contractors and introducing a piecework system based  on payment per delivery. A Jinn courier based in Leeds told the Guardian that he'd been paid £125 for a 72-hour week.

Two other legal challenges are also likely to impact on the gig economy. In January, a London  Employment Tribunal, found that Maggie Dewhurst, a 29-year-old bicycle courier from South London who worked for City Sprint, who have 3,500 couriers, should be classed as an employee rather than self-employed and was entitled to basic employments rights such as the minimum wage, holiday pay and sick pay. The tribunal ruled that the company had acted unlawfully when they failed to pay Ms. Dewhurst two day's holiday pay. Tribunal Chair, Joanna Wade, said that City Sprint's contractual arrangements were: "contorted", "indecipherable" and "window dressing".

Another case that has been widely reported is that of Gary Smith vs Pimlico Plumbers. Having worked as a plumber for six-years until 2011, Mr. Smith was dismissed by the firm when he suffered a heart attack and he sued Pimlico for sick pay. The Court of Appeal recently ruled that Mr. Smith was entitled to basic employment rights such as sick pay in spite of being technically self-employed.

Other legal challenges are already in the pipeline and are being taken against companies such as Addison Lee, Excel and eCourier. What all these cases have in common, is that they consider the real relationship that exists between independent contractors and the companies that they work for. Although the meaning of "worker/employee" is defined in section 230 of the Employment Rights Act 1996, in employment law, what it seems to boil down to is this: who is really in control? Clearly, there are certain distinct advantages for many employers to maintain the fiction that the people who do the work are not workers but self-employed. But as Maggie Dewhurst pointed out at her tribunal hearing, she was not a genuinely self-employed person because she could not "pick and choose" which jobs to accept:

"We spend all day being told what to do, when to do it and how to do it. We're under their control. We're not a mosaic of small businesses and that is why we deserve basic employment rights like the national minimum wage."

Maggie Dewhurst, who was represented by the law firm Bates Wells Braithwaite and backed by the Independent Workers of Great Britain (IWGB), believes that workers need to wake up and take action to stop this "on-demand model" of employment spreading. She said:

"Unless we take drastic action, we will all wake up in five years time on bogus contracts, with no employment rights, paid per task, and managed by a smartphone."

The Government have announced that a review led by Matthew Taylor, CEO of the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), is to investigate the gig economy and the rise in self-employment and zero-hour contracts. It is expected that the review will lead to recommendations for the law to be changed.  It has also been disclosed that the exchequer is facing a £6bn shortfall in NI revenue by the beginning of the next decade as a result of the rapid growth of self-employment in the UK - up by around 1 million since 2009.

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