Gig Economy Employment Rights FAQ

Portrait of Joy Drummond
Joy Drummond
Partner, Employment Law Solicitor

Gig economy jobs in the UK are normally paid per short term piece of work, such as a set rate to deliver a package or to drive a passenger to a particular location, rather than paid by the hour or by the day. Examples include: - Uber Drivers, Deliveroo Riders, Addison Lee Couriers and Pimlico Plumbers.

The employment rights of someone working in the gig economy depend on the exact arrangements. This article outlines how to tell which level of rights you have.

For free initial guidance on the legal issues and next steps get in touch with our Employment Law Solicitors.

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Gig Economy Employment Rights FAQ

How are Gig Economy Roles Different from Zero Hour Contracts?

Gig economy jobs differ from zero hour contracts where pay is by the hour or by the day but with no set fixed minimum hours. Employers use both to retain maximum flexibility to only pay for work when they need it and to cut or limit staff costs. Although in some cases the flexibility also suits the person doing the work, often they have no real choice and are forced to accept the financial insecurity of not having any guarantee of regular pay.

Companies operating in the gig economy often use contractual documentation which labels those who carry out work on their behalf as “self-employed” in an attempt to avoid giving them employee or worker rights.

My work contract says I’m self-employed and I pay self-employed Tax. What’s the problem?

If you’re genuinely self-employed, running your own business, with your own customers there may be no problem. On the other hand, if the reality is that you’re working for another company as part of their business, you may be missing out on your rights.

To benefit from the full range of employment rights, including unfair dismissal and statutory redundancy pay, you need to be classed as an “employee”. However, even if you’re not a full employee, many other employment rights, such as the right to claim for unlawful deduction of wages, holiday pay and the right to claim discrimination at work and whistleblowing detriment (including the detriment of dismissal) apply to workers who do not qualify as employees.

How do I tell if I’m an employee, a worker or self-employed?

There’s no clear test or dividing line between employees and workers and between workers and the self-employed. Just because your contract says you are self-employed and you pay self-employed Tax, that doesn’t necessarily mean you’re self-employed.

In a recent case involving Uber, the company had a number of contractual documents that set out that the drivers were not workers or employees. The Courts, however, didn’t take these documents at face value. Instead, the Courts took a rather scathing view and were quite critical of Uber for putting complex documentation in place that made it difficult and very confusing for the drivers to understand.

In deciding whether someone is an employee, a worker or self-employed, Employment Tribunals and Courts look at the reality of the working arrangements and consider various factors.

For both employees and workers, there must be a legally binding contract to provide work, whether or not it is written down. All employees are workers but not all workers are employees. Some of the relevant factors are the same but the bar for employee status is higher.

To qualify as an employee, you have to provide work personally and be under an obligation to carry out work offered and the right to be paid for it and the employer must have control over the work. The employer must have right to give instructions, to more or less control your time and place of work and how the work is to be carried out.

If the company you work for has to provide you with work, you have to do that work yourself when and where the company wants, in the way the company requires, and the company has to pay for it, you are probably an employee with full employment rights.

What if I don’t have to take the jobs offered and the company doesn’t have to offer the work?

If, in between the jobs, your relationship with a company means there’s a strong enough expectation that you’ll be given some work and that you’ll take at least some of those jobs and do them yourself, you may be an employee working under what is known as an “umbrella contract”. An example of this could be if you are working on a zero hours contract.

What if there’s no legal obligation for the company to provide me with any work between jobs?

Even if there isn’t a sufficiently strong expectation that the company will provide you with work and that you’ll carry it out so there is no legal umbrella contract, you may still be a worker.

Case law has found that when, for example, an individual working in the gig economy is logged on to an app to say he/she is ready, willing and available to work, they are a worker while logged on to the app and that the time while logged on is working time for the purposes of rights under the Working Time Regulations. If you are in fact running this as a business of your own, you’re not either an employee or a worker. 

What if I can ask someone else to do the job for me?

To be an employee or a worker generally you must do the work personally yourself.

Does that mean that to be a worker, I can never ask someone else to do the job, even if I’m ill?

In certain limited circumstances, you can ask someone else to do the work and still be a worker. For example, you may be able to substitute someone else occasionally when you’re unable to carry out the work because you are sick without losing your worker status.

If you are allowed to substitute someone else to do the job whenever you like without having to get the company’s consent, provided only that the substitute is qualified to do the work, you are probably not a worker.

If you’re allowed to appoint someone else to do the role, then this is more likely to point to you being genuinely self-employed, although each case will be assessed on its own merits.

There has been a fairly recent employment law case involving a plumber where the Courts considered how an individual’s right to appoint a substitute impacted on his employment status. In this case, the claimant was allowed to appoint a substitute but this required the company’s prior approval. This was a factor that the Courts took into account in finding that the claimant was a worker. 

What factors support a claim that I am a worker rather than self-employed?

You are more likely to be found to be a worker rather than self-employed if:

      • You cannot negotiate higher payment from the customer
      • You cannot grow the business or establish a business relationship with the customer
      • You cannot substitute someone else to do the work except if you are ill and then only with the consent of the company
      • You are integrated into the company’s business and marketed as such
      • You wear the company uniform/dress code and operate under the company’s logo
      • You are penalised for not taking jobs when you say you are available to work.

What rights do I have if I am a worker but not if I’m self-employed?

If you’re found to be a worker, you’re entitled to:

        • 5/6 weeks of paid annual leave
        • The National Minimum Wage
        • The right to claim for unlawful deduction of wages
        • Whistleblowing rights
        • Working time rights
        • Part time worker rights
        • The right to claim for workplace discrimination

I think I could be a worker. How do I get help and advice to secure my rights?

Trade Unions are at the forefront of making sure employers give workers their rights by supporting individuals and groups of individuals both in legal claims, which clarify the law for everybody, and industrially.

If you’re a member of a union, you should contact them first. If you’re not a member of a union, you should consider joining one. You can also get help from the Citizens Advice Bureau on this.

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