ThePeopleAlchemist Edit: HR, Business and the gig economy
To Gig or not to Gig? What do we mean when talking about the Gig Economy?
Consumer demand for innovative and agile services coupled with the desire of many to work on their terms makes flexible business models a very valid proposition. Together with a viable one. The Confederation of British Industry (CBI) described the UK’s flexible labour market as an “invaluable strength that underpinned Britain’s record employment rate. And boosted the country’s competitiveness”.
There have been quite a few high profile cases in court. Uber – now granted the right to appeal – Deliveroo, CitySprint for example. Putting employment status and the whole gig economy under scrutiny. Still, the idea that all workers favour fixed employment is a dangerous and outdated assumption.
Work can be both flexible and fair. Whatever the form of contract happens to be.
According to the Office for National Statistics, 905,000 British workers are employed on zero-hours contracts, representing 2.8% of all people in employment. The majority of these workers are happy to do so. In an ever more agile world, the gig economy is thriving. 1.3 million people are now working two jobs or more.
UK’s unemployment rate currently stands at 4.5%, the lowest since 1975. The working-age employment rate is at a record high of 74.9%. The highest since records began in 1971.
The crucial point is two-way flexibility which is why people choose this way of working. Where it benefits both the individual and organisation. It’s not simply about the transfer of risk. Rather than one-way flexibility. This is not just a matter of unscrupulous employers exploiting unskilled / semi-skilled workers. But also a matter of education/change in mentality from the old fashioned ways of working to a new agile economy where the critical factor is output. Rather than control and presenteeism.
But who is in the so-called “gig economy”?
Many in this category can be classed as freelancers, a group that has increased in number by 43% in less than a decade, according to a recent survey by IPSE. The group is diverse.
Almost half are aged between 40 and 59, and 20% are over 60. One in seven freelancers is also a working mother.
Many, of course, work this way out of necessity. Still, many do so by choice and love having several jobs to fulfil different interests and pursue their passions. Not being defined by a single position and without a hierarchical work, more flexibility and freedom to learn, innovate and explore.
A self-employed person doesn’t fit into the worker category and is genuinely in business on their account, providing professional or business services to their clients or customers.
Self-employed workers are also responsible for running their own business. This means keeping accounts in order, searching for new business. And ensuring they stay up-to-date with the law.
I can see how though the recent tribunal cases have highlighted that, sometimes, companies are using this as a disguise for workers/employees who should have (some limited) rights, like the right to the national minimum wage, protection from discrimination, working-time rights (e.g. holiday pay, rest breaks), health and safety. And statutory sick pay.
AN INDEPENDENT REVIEW OF THE GIG ECONOMY
To address this type of incident, the Prime Minister commissioned an Independent Review of Employment Practices in the Modern Economy on 1 October 2016. Matthew Taylor (Chief Executive of the Royal Society of the Arts) led this review to consider how employment practices need to change to keep pace with modern business models.
The review considered the implications of new forms of work driven by digital platforms, for employee rights, responsibilities. And employer freedoms and obligations. Including our existing regulatory framework surrounding employment (Gov.UK).
The review (now published Good work: the Taylor review of modern working practices) covered six main areas:
- Security, pay and rights
- Progression and training
- The balance of rights
- Opportunities for underrepresented groups
- New business models.
The CBI RESPONSE
“The Taylor Review rightly recognises that labour market flexibility is a vital strength of the UK economy. Driving better outcomes for everyone. Businesses agree that flexibility must be matched with fairness. But building on our current approach, as the report concludes, is the right way forwards. The CBI is ready to work in partnership with the government to address the challenges the report raises.
“Spreading good practice, not just focussing on new laws, is something the CBI has long supported, given the link between good employee relations and higher productivity. This is the only sustainable route to rising wages and better living standards. So there is much for firms to like and some valid challenges in the seven steps the Taylor team has outlined.
“Several proposals in the report will be of significant concern to businesses. For example, changes to the application of the minimum wage rewriting employment status tests. And altering agency worker rules could have negative consequences for individuals and affect firms’ ability to create new jobs.
“The Government will need to consider these aspects extremely carefully, alongside proposals for any future tax changes, to ensure our labour market retains the flexibility and entrepreneurship that has made it the mainstay of the UK economy.”
In summary, what do Employers need to be aware of?
- ‘Worker’ status could be scrapped.
- You might need to get the calculator out for minimum wage
- Companies dragged before tribunal might face more significant consequences
- Zero-hour workers might soon be requesting a more regular schedule
- Agency workers might be asking for more stability too.
So employers, start by reviewing your company’s working practices. If in doubt, seek advice.