Employment Law and the “Gig Economy”

There’s been lots of talk recently about the so-called “gig economy” – the situation where individuals work as and when for companies based on their availability and on demand from the company, without any of the security or protection of being an employee. It’s led to a call from many that there should be a “third” status of worker – someone who is neither a traditional employee nor self-employed. In the UK matters have been considered by the Government’s Office of Tax Simplification  and in the US there have been several articles on the subject following court cases featuring Uber, the “disruptive” taxi firm. (As an aside, here’s why I don’t think Uber are as radical as they seem)

But do we need to add in a new legal definition of worker? I remain unconvinced, for the following reasons

  • Despite the changes in the economy, it’s still clear in the overwhelming majority of cases whether an individual is an employee or self-employed. And the existing “tests” to determine employment status are capable of reflecting a wide range of relationships and working practices
  • No-one seems very clear on what this “third status” would be – how exactly would it differ from being an employee or being self-employed?
  • The “gig economy” has worked well for decades in industries as diverse as construction, hair dressing and graphic design without the need for additional legislation.
  • As the debate about zero hours contracts has shown, trying to legislate to control employment relationships creates as many problems as it allegedly solves.
  • Is the “gig economy” here to stay? In other words, is it a fundamental change to the world of work or just a reaction to the economic issues of the last 10 years? After all, as any current or recent CIPD student could tell you, the Flexible Firm Model has been around for well over 30 years.

Successful people management is all about recognising that there is little that is black and white, we are always dealing with shades of grey (many more than 50!!). Until we know what the problem actually is (and indeed if there really is one) legislation is unlikely to be the solution.

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