‘Self employed’ or ‘worker’ and why is it so important?

With the ‘gig’ economy growing rapidly, as employers we need to be clear on our responsibilities or it could cost us dearly.  There has been so much in the news recently but do we really understand what it all means?

The gig economy tends to refer to people using apps to sell their labour. The most commonly used examples are Uber and Deliveroo, but there are a growing number of platforms facilitating working in this way.

Uber have been arguing that their drivers are ‘self employed’ .  This Employment Appeal Tribunal decision in November, in a case originally brought by two of the drivers said they are in fact ‘workers’ when the app is switched on and not as the US owner of Uber claimed, ‘self employed’.  What that means is they could have the following rights:

  • Rights to the minimum wage
  • Sick pay
  • Paid holidays

So this could cost a considerable amount of money, especially as recently the European Court of Justice decided that if ‘workers’ had been mis-classed as self employed they were entitled to be paid that holiday (potentially going back almost 20 years!)

In some ways it doesn’t matter what is written in a contract, if it doesn’t reflect reality it will be overruled. It comes down to a number of factors, including the obligations on the individual when they are available for work. If these are sufficiently onerous then the relationship is one of a ‘worker’.

So what next? Well, there is a feeling that as more people become active in the ‘gig’ economy, people are not having access to employment rights as they did when they were employees.  The independent Taylor Review was commissioned to look into this for the Government.  It considered the implications of these and other new forms of work on worker rights and responsibilities, as well as on employer freedoms and obligations.  It made a number of recommendations including that workers for firms such as Uber and Deliveroo should be classified as ‘dependent contractors’, with extra benefits.

So watch this space for the latest development but in the meantime check whether your self employed contractors really are ‘self employed’.


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