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COVID-19 and the gig economy. Are more status claims on the horizon?

Online deliveries are up due to COVID-19, so many businesses are expanding their flexible workforces to meet customer demand. With the continued engagement of self-employed contractors within the gig economy, should we expect more status claims in the future?

Background

As a result of lockdown, we’ve seen an increased need for home deliveries in respect of a whole host of items, and from a very wide range of retailers. These retailers will either have their own delivery services secured internally or will contract out their delivery needs to an array of logistics providers to ensure the delivery of their products within the expected timeframe. From a food delivery perspective, Ocado reported a 40.4% increase in its second quarter results when compared to a 10.3% increase for the same period in 2019. Some readers may also recall the fact that Ocado had a virtual queue of 9,000 people on 18 March 2020 resulting in it temporarily closing down both its website and app. Deliveroo deliveries in March 2020 were also up 57% when compared to the same period in 2019. A Yodel survey also found that 70% of people plan on buying a larger variety of items online post-lockdown; another new-norm for us all.

Even before lockdown the gig economy continued to grow. In fact, the TUC has confirmed that the UK gig economy workforce has doubled in size since 2016. The ONS reported that 4.4% of the population in the UK worked in the gig economy in 2019, and while we are yet to receive updated figures, it is expected that that number has already increased this year as a result of COVID-19.

Case in the courts this year

Not only do we have the impact of COVID-19, but the Supreme Court also considered earlier in the month (w/c 20 July 2020) whether or not two former drivers for Uber should be classified as workers or self-employed contractors. At the Court of Appeal stage, it was held that these two drivers were in fact workers, and were therefore entitled to basic rights such as national minimum wage and paid holiday. Uber however continues to deny this is the case, claiming that it is not a traditional taxi firm, but a ride-hailing app which engages freelance drivers who like the flexibility that comes with being self-employed. It claims also that these drivers have much more control over the way in which they choose to work in their freelance capacity, in particular because they can choose whether or not to accept rides and because they have no obligation to log onto the booking app if they don’t want to.

Earlier this year, the European Court of Justice also provided some clarification when determining whether or not an individual is a worker or a self-employed contractor. In that case the status of a delivery driver, who used his own vehicle and mobile phone when carry out deliveries for Yodel, within certain time windows, albeit with the ability to accept or not accepts jobs, set his own working hours and delivery routes, and who had the right to engage substitutes and work for competitors, was called into question. The European Court, following a referral from the Watford Employment Tribunal, was specifically asked to consider whether the fact that an individual had a right to engage substitutes meant that they were not to be regarded as a worker, either at all, or only in respect of the period of time when they used their substitute.

Having considered the questions posed, the European Court held, somewhat helpfully for employers, that the Working Time Directive should be interpreted such that a person engaged by an organisation under an agreement which states that they are self-employed, cannot be classified as a worker where that person has discretion in the following areas:

  • the ability to use substitutes to perform the services that they would ordinarily undertake;
  • the ability to accept or reject various tasks or ‘gigs’ offered, whether in whole or part;
  • the ability to work for competitors, as the case may be; and
  • the ability to fix their own hours of work, to suit their own personal circumstances – albeit noting that while some self-employed contractors are bound to some extent by time slots, and flexible delivery routes, this should not always be an indication of worker status, as it may actually suggest that the individual has been given quite a bit of latitude with regard to his independent choice of working arrangement.

What do these cases mean for employers?

The elements of control, personal service and mutuality of obligation obliviously continue to be important considerations in all of these status determination cases, and it remains the case that a particular individual’s status requires assessment of the particular facts in each case. We await the decision in the both the Yodel and the Uber cases to see if additional clarity can be provided to employers and will report further in due course. In the meantime, status claims are not something of the past and employers should be mindful of this when engaging individuals on a self-employed basis.

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

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