NUMEROUS recent headlines have made reference to the “gig economy”, a term used to describe casual work carried out on a piecemeal basis. Probably one of the most publicised was when an employment tribunal decision in a case involving Uber ruled that drivers providing services to Uber were workers. Uber announced in December that it intends to appeal.
Reports suggest that almost five million people in the UK are engaged in the “gig economy”. The issue to be decided by recent tribunals and courts in England has focused on the employment status of individuals engaged in gig work. Many companies have classified individuals as self-employed contractors and, as a consequence, they will be unable to avail of workers’ statutory entitlements such as holiday pay or minimum wage.
Last week the English Court of Appeal issued its decision in the case of Pimlico Plumbers v Charlie Smith. Mr Smith had worked exclusively as a plumber for Pimlico for six years. He was engaged under a self- employed contractor agreement which meant that he could not avail of workers’ rights.
The Court of Appeal found that although Mr Smith was technically self-employed, in reality he was a worker. As a result, he was entitled to workers’ rights such as the right to be paid the National Minimum Wage and paid holiday. This is yet another example of the Courts looking behind contractual documentation and examining the reality of the working relationship.
This come just shortly after a decision in January, when an employment tribunal in England issued a decision having a similar impact. The case involved the firm CitySprint and resulted in a finding that a bicycle courier should be classified as a worker rather than as a self-employed contractor.
The employee in question had been employed for two years and had entered into an Independent Contractor Agreement meaning she had no entitlement to basic rights like holiday pay. However, an employment tribunal judge held that she was in fact a worker and that CitySprint had unlawfully failed to pay her for two days’ holiday. Although the award was small, the outcome is significant in establishing the status of the employee going forward.
CitySprint was also criticised by the tribunal judge, describing the contractual arrangements as “contorted”, “indecipherable” and “window dressing”. The tribunal judge focused on what was happening in practice and the degree of control exercised by CitySprint, as opposed to simply relying on the written contract between the parties. CitySprint has yet to confirm whether it intends to appeal this decision.
So what does this mean for employers in the “gig economy”? It would certainly be advisable to re-examine contractual arrangements and be mindful that clever contractual drafting will not necessarily absolve them from responsibilities owed to workers. Employment tribunals and courts will focus on the reality of the working relationship between the parties, so the existence of a self-employed contractor agreement could be disregarded in certain circumstances.
Although decisions in England and Wales are not legally binding on the tribunal in Northern Ireland, they will be of persuasive authority and in the absence of a good reason to depart from the judicial trend in England, it is likely that the tribunal in Northern Ireland would reach a similar conclusion.
:: Aisling Byrne is an associate at Belfast law firm Cleaver Fulton Rankin, specialising in employment law. She is a regular speaker at the Chartered Institute of Marketing and Women in Business events and has lectured at Ulster University.
