Onus is on the employers to get job status right
5th May 2017
COURIER companies and the high-tech Uber transport business are in the spotlight over so-called "gig economy" legal battles which could have serious implications for other businesses.
Nicola Barrass, partner and employment law specialist at Bridge McFarland, said the cases highlight the potential cost of confusion over employment status, with the onus on employers to get it right.
There have been a number of recent, high-profile cases about worker status, including claims by a number of drivers against Uber for minimum wage and holiday pay.
Nicola said: "The term 'gig economy' applies to such situations as odd-jobbing or freelancing.
"It's not just businesses in the tech sector that are caught by this. If businesses don't get it right they could be hit with backdated claims for minimum wage and holiday pay and they could face serious tax implications – all adding up to brand and reputation damage."
Uber's defence – that the people hired were all self-employed and therefore running their own businesses – is consistent with other claims against Pimlico Plumbers, and against courier operators including Citysprint.
But the claims against those businesses succeeded and Nicola warns that employers should check their own arrangements now to avoid problems in the future.
She said: "Individuals categorised as 'workers' have some legal rights but not the full range of rights that apply to traditional employees. Workers cannot claim they have been unfairly dismissed but they do have rights under discrimination, minimum wage and working time legislation. Self-employed individuals have no employment rights.
"Over the years the employment law team at Bridge McFarland have helped many local businesses prepare contracts for self-employed individuals as well as workers. What's key is thinking through how the arrangement will work in practice and making sure that's properly recorded. A well drafted document can save a lot of headaches further down the line."
Nicola added: "Uber have appealed the Employment Tribunal decision but I can't see the appeal succeeding.
"However, the appeals process may take many years, by which time Uber workers who haven't already made a claim may be out of time to make a claim. If Uber hadn't appealed they could have been a flood of claims.
"Looked at in that way, Uber's decision to appeal makes sense."
Nicola warned that the claims signal how difficult it can be to establish a genuine case of self-employment where a business has a personal relationship with an individual who is providing services.
She said: "This is a general trend which has been developing over several years. The Uber case and other decisions have raised awareness of the issue and at Bridge McFarland we have been contacted by a number of businesses who are being threatened with similar claims.
"As awareness has increased, employers who have these sorts of relationships should review them to ensure the arrangements and documentation are consistent with self-employed status, because there are significant risks for businesses in getting the status wrong."
News Courtesy: www.humberbusiness.com