I wish I had a £5 note for every time I have heard the phrase “gig economy” over the past few months. The media seem to be fascinated with the idea that the “status” of the employment relationship between your business and your “employees”, or between you and your “employer” is suddenly more relevant than it was only a few months ago before the Pimlico Plumbing case. There seems to be an implied assumption that people are beginning to work in a new way which is outside the traditional understanding of the employment relationship, but this implication this is misleading and potentially dangerous.

I have already begun to receive enquiries from people who have been convinced by media reporting that the decisions in the various “gig economy” cases mean that it is now possible for them to be employed by a business without having to pay tax on the traditional PAYE model. I think that while it would be great for my own business to offer people such a solution, that reality is that this is simply not the case.

The two “early adopters” of working relationships which now seem to characterise the “gig economy” in the UK were Uber and Deliveroo (subsequently followed by other “on demand” service providers such as Pimlico Plumbers) and these businesses have optimised a working model based upon self employment. It is the use of technology which has allowed this model of work to flourish. These models of work rely upon the existence of smartphones to facilitate rapid requests and responses, GPS location and digital mapping to inform people where to go and algorithims which efficiently match consumer with service provider. This style of working does not lend itself to every job role and it would be a folly to assume that the “Deliveroo model” can be replicated and rolled out across a wide range of different jobs.

It is also worth reflecting upon the extent to which this model will suit most workers. Some people may be satisfied with the concept of “flexible” pay but for many workers set wages and set hours, together with sick pay and paid holiday have a useful purpose: they provide the predictability and stability that people need in order to plan their lives. It is unfortunate that workers with “flexible” pay cannot buy personal supplies such a food or fuel on a flexible basis and the reality is that “flexibility” of pay can be both positive and negative which may literally produce months of famine as well as months of feast during the course of a working year.

I am broadly pleased that the media focus on the “gig economy” has encouraged businesses to renew their thinking about the way in which they retain their workers and to consider whether alternative methods of organising the working relationship could offer a benefit to either the business or the worker. I have argued for a number of years that the simplest and potentially the most profound method of offering flexible employment practices would be to reconsider the terms of the employment contract. I hope that we may now see greater willingness within UK businesses to accept that a single employment contract may not be a “one size fits all” solution for each employee.

The overarching legal concern with all the above issues and ideas is that it is vital that the nature of the working relationship between the business and the worker is correctly and clearly defined by the contract. If this is not achieved there are risks to both employee and employer, not the least of which will be the possibility of adverse interest from HMRC.

If you have any concerns about your position, or the position of your business please contact me immediately for a confidential, free initial consultation.

Free employment status assessment:

For a free immediate employment status assessment on your proposed employment relationship call me now on 03302233288 or book an appointment for a discussion

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