The Gig Economy: A Legal Opinion

The term "gig economy" is one that's thrown about regularly in the context of the courier and transport industry. There's no doubt that the trend towards temporary positions and short-term contracts with independent workers is on the rise and, no matter what side of the fence your opinion falls on, its potential ramifications should not be ignored.

Understanding the Gig Economy

As a particularly hot topic in the courier industry, it's important to understand just what it means for operations of your business, regardless of whether you're a self-employed courier driver or a commercial fleet manager. While the subject garners more than its fair share of negative publicity, it can actually provide a lucrative source of work for the self-employed courier driver. With a number of high-profile cases in the news recently, gaining a legal insight can be very helpful when navigating the minefield of information and opinions on the gig economy.

A Legal Insight

Philip Richardson is Partner and Head of Employment Law at Stephensons, a national law firm. With 14 years' experience as an employment solicitor, Mr. Richardson has extensive expertise across the board, specialising in negotiating terms and agreements, advising on performance issues, grievances, disciplinary and dismissal matters, restructuring, redundancy and defending tribunal claims. As a regular guest speaker at business network seminars, Mr. Richardson has opined on the gig economy in order to redress some of the negativity and offer a legal perspective.

Please note: The following is simply a summary of Mr. Richardson's legal perspective and personal opinion, and is in no way to be considered individual legal advice.

Scrutiny of the Gig Economy

A number of high-profile cases against companies like Uber and CitySprint have been reported on extensively in the media. The negative publicity surrounding the effective use of freelancers as a workforce, therefore skirting legislation requiring the implementation of the national minimum wage, has recently culminated in a successful claim by a bike courier against her employer.

Even if these companies are utilising freelancers on what equates to a full-time job, a loophole in the law means that they are not required to offer those workers any of the benefits of the traditional employment model. The Work and Pensions Committee insist that the government must work to close such loopholes as a matter of urgency, because not only does it allow for the exploitation of workers, but it also has the potential to reduce tax contributions and create pressure on the welfare state.

However, Mr. Richardson does not believe that affording a self-employed courier driver the same benefits as a full-timer (like holiday pay and sick leave) will actually have a huge impact on the financial operations of large companies like Hermes, ASOS and other online retailers that use a workforce of freelancers. He says that, for the majority of consumers who use operations with this kind of online business model, convenience – and not solely price points – can play a major role. He's of the opinion that many are willing to pay a higher price in return for the convenience of receiving goods delivered to their doorstep.

Case-by-Case

Despite recent tribunal decisions being seen by some as a landmark, Lord Justice Underhill (who oversaw the aforementioned case) has recommended caution, warning businesses and individuals against making generalisations, and stressing that all future cases will be taken on their own merits. But Mr. Richardson says that it is also vital that businesses take recent case rulings into consideration if they intend to engage workers on a freelance basis while seeking to place restrictions – such as set hours/set rates – on them.

Whatever your personal opinion on the gig economy, knowledge is power; it's important to arm yourself with as much information as possible from both sides of the argument to gain a genuine insight into its potential ramifications.