Gig Economy Update
18th December 2018
Increased protection for ‘gig-economy’ workers as UK Government introduces its biggest package of workplace reforms in over two decades.
The reforms, announced yesterday, will see vulnerable workers – including gig-economy workers, agency employees and zero-hour contract workers – enjoy greater workplace protections including a ‘day one’ statement of rights detailing their pay entitlements and leave eligibility.
Incorporating 51 of 53 recommendations made by Matthew Taylor, chief executive of the Royal Society of Arts, in his Review of Modern Working Practices, the new legislation is intended to clarify the obligations and rights of firms and workers, respectively.
At the heart of the ‘substantive’ reforms lies a commitment to protecting under-represented groups, as platform based working – such as ridesharing network, Uber- becomes more prevalent.
In addition to introducing a ‘statement of rights’, guaranteed to all employees on their first day of work, the new legislation will:-
1. Quadruple the maximum employment tribunal fines, for employers who have demonstrated malice, spite or gross oversight, from £5,000 to £20,000;
2. Dispense with the ‘Swedish Derogation’, a loophole which allowed employers to pay their agency workers less than their permanent staff;
3. Lower the threshold required for a request to set up Information and Consultation arrangements from 10% to 2%; and
4. Increase the holiday pay reference period from 12 to 52 weeks, allowing seasonal employees and atypical workers to receive the holiday pay to which they are entitled.
Unveiling the new reforms yesterday, Business Secretary, Greg Clark, commented: “Today’s largest upgrade in workers’ rights in over a generation is a key part of building a labour market that continues to reward people for hard work, that celebrates good employers and is boosting productivity and earning potential across the UK”.
Whilst the reforms will undoubtedly clarify the rights of vulnerable workers, whether they will fully shift the balance of power in favour of the gig economy remains a point of debate. Many union leaders are disappointed with the failure to improve an outright ban on zero-hour contracts but most commentators recognise that, if used properly, the proposals can offer genuine flexibility for both parties.
It should be stressed that the proposals are just that and, as yet, there is no draft legislation nor is there a stipulated time period for its implementation. We shall provide further updates as more details become available.
For more information, see Upgrade to workplace rights
By WJM Partner Martin Stephen, with thanks to WJM Trainee Alyson Shaw. Call 0141 248 3434 if you would like to discuss this ruling or any other employment issues.
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