Employment Status Reviewed – Gig Economy Revisited

By Till Sommer, Associate Director, London

The degree to which gig economy companies have challenged the UK’s employment policy framework has been made clear by an internal Whitehall “Employment Status Review” which was conducted in 2015 but only published last week.

Most strikingly, the 2015 review fails almost entirely to touch on the policy problems raised by the gig economy. While the review looks at the challenges posed by ‘atypical working arrangements’ and considers issues such as zero hours contracts, it seems mainly concerned with solving the policy problem of distinguishing workers from employees. However, it does not properly engage with the dominant gig economy policy problem of deciding whether gig economy riders/drivers/partners are self-employed or workers.

Within the space of less than two years, the gig economy has made an already highly intricate policy problem – how to make UK employment status definitions fit for purpose – even more complex, but also turned it on its head. Though excluded from it in name, a number of points raised in the 2015 Review can be appropriated for the gig economy debate. Of most relevance is the section on ‘freelancers, contract actors, consultants and interims etc.’ on page 25. While it is concerned with ‘skilled individuals providing a service’, it interestingly mentions “legal professionals, project managers, IT professionals, members of the entertainment industry” - people who are usually highly paid and whose skills are in demand; the exact opposite, therefore, of your typical gig economy service provider.

The current direction of travel, as marked by recent court cases (e.g. Uber, CitySprint) indicates that some gig economy companies may have to start treating their riders/drivers/partners as workers; and comments by Matthew Taylor (who heads the PM’s Modern Employment Review) further suggest that the definition of workers might need to be updated to reflect the gig economy.

Some gig economy companies have suggested they would welcome such reform. As ever, though, the devil’s in the detail and it remains to be seen what any new worker status will look like. Once the reforms are implemented, many gig economy service providers will probably benefit from being treated as workers. Some, however, might long for the days of flexibility that were traditionally afforded only to their highly paid (and skilled) counterparts.

If nothing else, Whitehall’s 2015 Employment Status Review was bang on the money when it concluded that “there are no quick wins” and it will be interesting to see whether Taylor and the various other inquiries will find a solution that offers an appropriate level of rights without undermining flexibility.

For further reading on this, have a look at:

• Employment Status Review
• Review of Employment Practices in the Modern Economy (Taylor Review)
• The 'Gig' economy: an OTS focus paper
• BEIS Committee Inquiry into the future world of work and rights of workers inquiry
• Work and Pensions Committee Inquiry into Self-employment and the gig economy inquiry

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