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Ministers order HMRC crackdown on ‘Gig Economy’ exploitation

Ministers order HMRC crackdown on ‘Gig Economy’ exploitation

Anna Lovett reports on the Employment tribunal verdict which saw Uber drivers win the right to be classed as workers rather than self-employed.

Following the October Employment tribunal verdict which saw Uber drivers win the right to be classed as workers rather than self-employed, ministers have called upon HMRC to investigate the emerging UK ‘gig economy’.

Just this week a further case saw the Employment Tribunal rule in favour of a bicycle courier, who had taken against the UK’s leading same day courier company, CitySprint UK Ltd, in late 2016 regarding her employment status. The judgment, written by employment Judge Jo Wade, described CitySprint’s business model as "contorted, "indecipherable" and "window-dressing".

‘Gig economy’ is a term used for people who do not have full time positions with an employer. Instead they get paid for the work they carry out, whether it be delivering a parcel or a takeaway, they get paid for ‘gigs’ rather than a fixed salary and are usually classed as self-employed.

This style of working can be beneficial for many, it gives control and flexibility to individuals who may need to arrange working around other commitments such as studying or childcare. However, following the Uber ruling, employers need to ensure that they are not paying less than the national minimum wage, or national minimum wage depending on their age.

The Uber ruling does not mean the end for the gig economy or for businesses’ who use this style of service. The tribunal found that Uber could have classed their drivers as self-employed, but they failed to adopt a model which achieved this aim. Uber was found to be to be too much ‘in control’ of the business and the drivers were held to be too economically dependent on them.

This ruling places the onus on to employers to ensure that their working practices allow people to be classed as legitimately self-employed if that is the aim, or to be aware of the right of workers otherwise to holiday pay, sick pay and the national minimum wage.

For further advice on employees and the national minimum wage please contact Anna Lovett on 01228 552220 or email alo@burnetts.co.uk.

About the author

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Anna Lovett

Anna is an Associate Solicitor in the firm's Employment & HR team.

Published: Thursday 19th January 2017
Categorised: Employment, International, Legal Services in Newcastle, Penrith, Regulatory, West Cumbria

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