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Zero Hours Contracts and the Gig Economy

The traditional models of employment have been in decline for a number of years. In the modern economy, the ‘gig economy’ and ‘zero hours contracts’ have become widespread, and well known through being reported on in the media.

Recent employment cases involving Uber and Deliveroo have raised new questions regarding the gig economy, and have added to the need for employers to think carefully about their rights and responsibilities when providing work.

There are obvious similarities between the workings of the gig economy and the zero hours contract. Commonly, in both cases there is no obligation on thecontact us employer to offer specific types and amounts of work to the worker, whilst the worker is not obliged to accept the work offered, and is not restricted to accepting work from the one source. This offers flexibility or uncertainty, depending on your viewpoint.

The differences between the two models have related to the legal status of the worker, and the benefits they are entitled to. Employment law essentially recognises ‘employees’, ‘workers’ and ‘the self-employed’. Typically, the gig economy worker has been treated as being self-employed, meaning that if they don’t work, they don’t get paid; they have no right to claim holiday pay, national minimum wage, statutory sick pay, or a host of other rights open to the 'employee' (and in some cases the 'worker').

Some zero hours contracts lead to staff being treated as either employees (with the usual statutory rights) or, perhaps more often, workers (a ‘halfway house’, where workers have some rights but not to the same degree as enjoyed by the employee).

Uber was taken to the Employment Tribunal in 2016 by 2 of its drivers, who wished to claim status as workers rather than being self-employed, and so wished to claim rights to holiday pay and national minimum wage. The claim was successful, and Uber’s appeal was dismissed in late 2017.

The impact of the case is clearly of real importance to the interpretation of rights under the gig economy, though must be weighed against a Central Arbitrationcontact us Committee decision (also in late 2017) which found that Deliveroo staff were to be treated as self-employed rather than as workers; there is however an ongoing Employment Tribunal case which is to be heard later in 2018 which will consider further the employment status of a number of alternative Deliveroo staff.

As is often the case in Employment law, the future landscape in this area is somewhat uncertain, and the current understanding of the law subject to possible change. Employers need to think carefully about the needs of their business, and the rights of the people they provide work to. At Norrie Waite & Slater we will be happy to provide assistance through what could be a difficult decision-making process.

Please contact us for more information.

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