To Gig or not to Gig? Is this the way forward in a uncertain economy?

  • By The Alchemist About Town
  • 20 Jul, 2017

The Gig Economy and Employment Status

To Gig or not to Gig? What do we actually mean when talking about the Gig Economy?

Consumer demand for innovative and agile services coupled with the desire of many to work on their own terms make 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 right to appeal -  Deliveroo , CitySprint ), putting under scrutiny employment status and the whole gig economy but the idea that all workers favour fixed employment is a dangerous and outdated assumption.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 Statistic s   905,000 British workers are employed on zero-hours contracts, representing 2.8% of all people in employment,  and the majority of these workers are happy to do so;  in a ever more agile world the gig economy is thriving, estimating 1.3 million people are now working two jobs or more.
UK's unemployment rate currently stands at 4.5%, the lowest since 1975, while 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 the why people choose this way of working) where it benefits both the individual and organisation and it's not simply about the transfer of risk, rather than one way flexibility (this is not just a matter of unscrupulous employers trying to exploit 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 important factor is output rather than control and presenteism).

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 the age of 60. One in seven freelancers is also a working mother.
Many of course work this way out of necessity but many do so by choice and love having several jobs which allows them to fulfil different interests, pursuing their passions, not being defined by a single job and without having the restriction that a hierarchical work would give with more flexibility and freedom to learn, innovate and explore.

A self-employed person is someone who doesn’t fit into the worker category and is someone who is  genuinely in business on their own account, providing professional or business services to their clients or customers.
Self-employed workers also have the  responsibility for running their own business, which means keeping accounts in order, searching for new business, and making sure 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 minimum national wage, protection from discrimination, working-time rights (e.g. holiday pay, rest breaks), health and safety, and statutory sick pay.

To address this type of incidents, an Independent Review of Employment Practices in the Modern Economy was commissioned by the Prime Minister on 1 October 2016 and Matthew Taylor (Chief Executive of the Royal Society of the Arts) led this review to consider how employment practices need to change in order to keep pace with modern business models.

The review considered the implications of new forms of work, driven by digital platforms, for employee rights and responsibilities, employer freedoms and obligations, and our existing regulatory framework surrounding employment (Gov.UK).

The review ( now published  Good work: the Taylor review of modern working practices covered  6 main areas:
  1. Security, pay and rights
  2. Progression and training
  3. The balance of rights 
  4. Representation
  5. Opportunities for under represented groups
  6. New business models
The CBI has responded as such :

“The Taylor Review rightly recognises that labour market flexibility is a key 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, which is the only sustainable route to rising wages and better living standards. There is much for firms to like, as well as some valid challenges, in the seven steps the Taylor team has outlined.

“A number of proposals in the report will be of significant concern to businesses, however. Changes to the application of the minimum wage, rewriting employment status tests and altering agency worker rules could have unintended consequences that are negative for individuals, as well as affecting 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
  • Might need to get the calculator out for minimum wage
  • Companies dragged before tribunal might face bigger consequences 
  • Zero-hours workers might soon be requesting a more regular schedule
  • Agency workers might be asking for more stability too

So employer, start by reviewing your company's working practices and, if in doubt, seek advice.

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