Will Gig Economy Workers Be Guaranteed The National Minimum Wage?


The Law Of… getting fair wages

The chairman of the Commons work and pension select committee, Frank Field, has called for the Government to guarantee the National Minimum Wage for self-employed workers who are part of the gig economy operating in the UK.

He has also suggested that they should be stopped from losing work with no notice period.

Joy Drummond, Partner in Employment Law, takes a closer look at how this would create a more stable future for the self-employed.

Introducing A Fair Standard Of Work

Although around 900,000 self-employed roles have been added to the UK's workforce since 2010, the rapid rise of the gig economy in the UK has brought a number of issues with it.

This has resulted in individuals challenging their employers over their employment status and which rights they are entitled to. Uber, Deliveroo, and Hermes are amongst the employers facing legal action from their staff, with drivers for Uber managing to win workers' rights in 2016.

Frank commented that a national standard of fair work would "give the prime minister the tools she needs to craft basic humanity, decency and fairness into the bottom of Britain's labour market."

Introducing a national standard would automatically provide all gig economy workers with employment rights, and stop employment tribunals and HR Revenue and Customs from having to check whether people are really self-employed.

These rights would include:

  • Guaranteed income that would not be lower than the National Minimum Wage after expenses were taken into account, such as petrol and car insurance
  • A ban on 'sweated labour', which involves self-employed individuals working excessively long hours to make a basic living
  • Giving working people the right to challenge intimidating employment practices
  • Giving individuals 4 weeks' notice before any changes are made to their working patterns or work is withdrawn
  • Transparency about how companies calculate payments to working people

Reviewing Current Working Practices

Companies notoriously associated with the gig economy, such as Uber, Deliveroo, and Hermes, are likely to oppose the proposal as their businesses have been wrongly treating those who work for them as self-employed. Although Uber refused to comment, Hermes said that it was reviewing Frank's proposal.

Frank said:

"For some working people, the gig economy provides the opportunity of flexible work, and a supplementary income, around which they can fit other commitments."

"However, for many others the gig economy represents life of low pay, chronic insecurity and exploitation, in which all of the risks in the employment relationship are unloaded on to them by the company with whom they are working, and the gains go almost exclusively to the company in question."

He also added that Sir David Metcalf, the Government's new appointed director of labour market enforcement, should monitor the new minimum standards.

Frank's proposal is also being considered by the Taylor Review into Modern Working Practices, according to a spokesperson. Launched in November 2016, the Taylor review aims to gain an insight into modern working practices across the UK.

According to the spokesperson, the review will involve a team "considering whether employment practices need to change to keep pace with modern business models – including the gig economy and use of agency workers."

"It is also considering the implications of new forms of work on worker rights and responsibilities – as well as on employer freedoms and obligations."

Joy comments:

"In spite of the fact that Uber drivers and CitySprint couriers won workers' rights, thousands of individuals who are classed as 'self-employed' by their employers are still not sure about what employment rights they have."

"They cannot be sure about how the law will be applied in their particular case. They are often fearful that raising the issue will result in them being denied work, especially the many who are on zero-hours contracts. A legal challenge is expensive and requires time and effort, which they can ill afford. Membership of a trade union is key in securing rights for those who are very often low-paid and exploited."

"As Frank Field says, a national standard of minimum rights for all who work in the ‘gig economy’ would avoid the need for employment tribunals and HM Revenue to determine whether people are genuinely self-employed, or are in reality employees or workers, by automatically giving employment rights to them all. It would also remove wasteful uncertainty for workers and employers."

"Guaranteeing employment rights for all individuals would ensure that they are protected and have a stable income to support themselves and their families."

"If you are not sure what your legal rights are, seek advice from one of our Employment Law solicitors so that you do not miss out on what you are entitled to."

News Archive

Get In Touch