Rise in “gig” economy causes confusion for employers

A recent Employment Tribunal ruling highlights the dangers of getting the employment status of your staff wrong. In considering the employment status of an individual i.e. employee, self-employed or worker the tribunal will look at the substance of the relationship between the employer and employee.

A bike courier who was employed by logistics firm City Sprint under a self-employed contract won her claim for holiday pay as the tribunal considered that she was a worker rather than genuinely self-employed. The status of “worker” has evolved in recent years to cover individuals who are required to provide personal service under a contract but do not meet the other basic requirements of an employee and are not in business for themselves (self-employed). Workers are entitled to basic rights such as holiday pay, sick pay and the national living wage. It is likely that City Sprint will now face a large number of claims for back pay from staff engaged on similar contracts.

This follows the similar successful claim by Uber drivers in October 2016 that they were not genuinely self-employed and should also be considered “workers”. These cases, although relating to the “gig” economy are of wider relevance and demonstrate the importance of getting the employment status of your staff right.

For more information or advice please contact us and a member of the employment team can help you.