The gig economy has grown significantly over the last decade which has resulted in substantial changes to the EU and UK labour market. The EU has recently announced that it will be creating new law to help millions of gig workers gain the status and rights of an employee, rather than being considered self – employed. The EU has two main categories of workers: employees or self employed individuals. However under UK law, there is middle category of ‘worker’ between an employee and a self employed individual. Workers have certain employment protections in the UK such as the right to minimum wage and paid holidays, however they are not entitled to all the legal rights that an employee has such as the right to not be unfairly dismissed and the right to redundancy pay after two years’ continuous service.
Since Brexit, the UK government has no obligation to follow changes made to EU laws as such changes no longer have a direct impact on UK law. Instead UK judges now have the ability to clarify this complex area of law on a case by case basis. For example in February 2021 the UK’s Supreme Court upheld Uber drivers were considered to be workers rather being self employed individuals.
Despite EU law no longer being directly applicable in the UK, if the EU changes its stance on gig economy workers, it is likely that there will be more pressure within the UK from trade unions to take additional measures to protect the gig economy workers and to allow them to gain more employment rights. There will however be objections from gig economy companies and there is a risk that many businesses may potentially leave the UK market if there are significant changes to working status in the UK. For example in 2021, Deliveroo ceased operating in Spain and one of the main reasons for Deliveroo’s decision was due to the change in Spanish law where workers were presumed to be employees rather than self-employed contractors.
The UK government previously carried out a consultation on employment status in 2018, where the majority of the responses received indicated that the worker category remained helpful and should be retained, with some citing the flexibility it allowed individuals and businesses in an evolving labour market. Following this consultation, the UK government recognised that the current employment status framework worked for the majority, and the benefits of creating a new framework for employment status was outweighed by the risk associated with legislative reform.
If the UK government is minded to reform employment status in the UK based on the changes now happening within the EU, there will not be an easy solution, and any reform will be complex. It may also create cost and uncertainty for businesses, at a time where they are focusing on recovering from the pandemic.