I am considering taking a job as a delivery driver – what are my rights in the gig economy?

This article was first published by This is Money.

Over the past five years, the UK has seen the rise of a new way of working called the ‘gig economy,’ fuelled by the rise of mobile apps and on-demand services. 

Under this system, workers are paid for the specific jobs – ‘gigs’ – they undertake rather than the hours that they work. These tasks could be anything from transport or delivery to odd jobs or beauty treatments.

While this way of working can be convenient and flexible, it is also uncharted territory in terms of employment rights. Here, a solicitor explains how the employment landscape is changing in the UK and what you need to consider when taking up a role in the gig economy. 

Clare Gilroy-Scott, senior solicitor in the employment team at law firm Goodman Derrick LLP, replies: As a delivery driver you may well find that the company that has hired you treats you as a self-employed independent contractor as opposed to a traditional employee.

This is a particularly common scenario for delivery, courier and transport businesses which tend to offer work on a ‘gig’ basis, as flexible, temporary assignments, instead of permanent employment.

In fact, some businesses operating in today’s gig economy will now only offer work on this basis.

These ‘self-employment’ models have been criticised as a means of avoiding employment rights. This is because self-employed contractors do not have the same protections and rights as company employee for example in terms of holiday pay, sick pay and the national minimum wage.

Why was the Uber decision important?

The employment rights of gig economy workers have been under considerable scrutiny since a landmark employment tribunal decision in October last year, involving popular transport app Uber.

Some of Uber’s drivers brought claims for the national minimum wage and the right to paid holiday. Uber insisted that its drivers were not entitled to these employment rights because they were self-employed and had signed contracts to confirm this.

The tribunal disagreed, holding that the drivers were ‘workers’ and therefore entitled to paid holiday and the national minimum wage.

As a result, Uber is now having to compensate the drivers who brought the claims for unpaid holiday and wages. Uber is likely to face similar claims by its other drivers, at some cost given that Uber has around 40,000 drivers in the UK.

This has paved the way for other workers in the gig economy to claim basic employment rights. In January 2017 the employment tribunal held that a bicycle courier working for CitySprint was a ‘worker’ entitled to holiday pay and the national minimum wage.

Deliveroo, the food delivery service, is facing action by its couriers who are seeking union recognition for workers’ rights and in February 2017 a plumber working for Pimlico Plumbers was held by the Court of Appeal to be a worker entitled to these basic employment rights.

How can I find out what my rights are? 

In order to assess employment rights you need to know whether you are an employee, a worker or a self-employed person:

Employee

‘Employees’ perform work personally and are under the employer’s control, principally when and how to do the work. Traditional employment is often compared to a master/servant relationship.

Employees generally have most employment rights, including protection from unfair dismissal and statutory redundancy payments after two years’ service.

Gig workers are not usually taken on as ’employees’ – although it is possible to have very short-term employment.

Self-employed

‘Self-employed’ individuals are basically operating their own business. If you are self-employed you will usually negotiate commercial terms yourself, have numerous clients and have control over how and when you work – rather than answering to an employer.

The genuinely self-employed do not have employment rights, making them are an attractive option for businesses operating in the gig economy.

Worker

‘Worker’ status falls somewhere in between the two. They must undertake the work themselves but will not be under the same direction as an employee or have the same freedoms as the self-employed. This was what the Uber drivers were held to be by the tribunal.

Workers do not have protection from unfair dismissal or the right to a redundancy payment after two years.

However, they do have some limited employment rights including:

· paid annual leave

· national minimum wage

· protection in respect of whistleblowing

What should you consider when taking on a gig economy role?

You first need to understand how the business is offering to engage you. Are they suggesting you are self-employed? If so, is this really the case in practice?

You will need to read your contract carefully and you may want to take legal advice. If you do not offer your services as a professional delivery driver to several clients, with control over how and when you work for each, and you will be under their management then you are likely to be a worker, not genuinely self-employed.

As a worker, you will need to check that you will receive the national minimum wage for the hours that you work and you should be entitled to paid holiday of 5.6 weeks each year.

Check whether they will be deducting PAYE tax from your salary. If not, are they expecting you to pay your tax as a self-employed person? HMRC has its own tests for whether you should pay PAYE tax and there is a useful tool on its website to check your tax status.

You should also check whether they are trying to limit you from taking other work as this is likely to be unlawful.

Will there be changes to employment law because of the rise of gig economy working?

There are concerns that current employment law does not offer sufficient protection for gig economy workers.

As a result, the BEIS committee of parliament has launched an inquiry called the ‘Future world of work and rights of workers’ and the Government has commenced review of employment practices in the modern economy.

It seems likely that the legal definitions of employee, worker and self-employed will be clarified in light of gig working models but this may not be until after the tribunals have heard appeals in the Uber case later, and other similar actions.

The tax implications of gig working are also being considered by HMRC. In the meantime, workers can report complaints about the national minimum wage and work rights via an online form on the gov.uk website. 

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.