Employment law in a tangle over self-employed in the gig economy

Legislators across Europe have struggled to keep up with protecting minimum employment rights as ‘self-employed’ jobs proliferate, writes Kyran Fitzgerald

Employment law in a tangle over self-employed in the gig economy

Legislators across Europe have struggled to keep up with protecting minimum employment rights as ‘self-employed’ jobs proliferate, writes Kyran Fitzgerald

Increasing numbers of jobs are being filled by people who are not treated as employees but cannot be described as being truly self-employed.

More and more people work for so-called internet platforms in what has been termed the gig economy.

Such informal work arrangements suit those who are topping up income from full-time employment and those with caring responsibilities who have a limited amount of time to spend outside the home.

But many employers are suspected of using such informal arrangements in an effort to avoid or evade duties imposed by them under a wide range of employment statutes.

A range of bills has been submitted to the Oireachtas with the aim of copper-fastening the position of workers caught up in such arrangements.

Those charged with framing employment and tax laws across many jurisdictions have struggled to keep up across a number of fronts. However, the courts in England, in particular, have produced decisions on cases brought on behalf of people working for Uber and Deliveroo which have attracted much comment.

In recent days, there has been a significant developments.

EU Commissioner Margrethe Vestager has moved to tackle an anomaly under the law which has had the result of preventing workers not falling within the definition of employee from getting together to negotiate improved conditions and higher wages.

In her view, collective bargaining should not be viewed as cartel-like behaviour. This represents a potentially decisive break from the approach taken by some national competition bodies.

Ms Vestager appears to promise a decisive break with pre-existing EU competition law in this area.

Competition lawyers have suggested that the EU may be planning to introduce an exemption designed to protect gig economy workers.

This could represent a significant boost for workers’ rights. It comes at a time when the protection of workers looks set to take centre stage in the Labour party campaign in the UK elections.

The Government here has moved with caution. Last March, the Employment Miscellaneous Provision Act became law. It requires employers to provide a written statement of core terms to workers with more than one month’s continuous service as part of what lawyers describe as an attempt here to regulate the gig economy.

The same month the European Parliament passed a new law designed to protect the most vulnerable employees involved in “atypical work”. The parliament has accepted that casual workers fall into a grey area.

Under the law, an employer will be required to inform the worker about the “essential aspects” of their employment on the first day.

The new rules would apply to those who work at least three hours a week over a four week period for an organisation.

According to the MEP behind the law, Enrique Calvet Chambon, it represents the first EU law setting minimum worker rights in 20 years.

Workers affected will be entitled to a description of duties, information on pay and hours, a right to compensation for late cancellation of work hours and a ban on exclusivity clauses preventing the worker from securing other jobs.

“All workers who have been in limbo will be granted minimum right thanks to this directive,” the MEP says.

As the Peninsula Law Group points out, most common law jurisdictions divide workers into those who are employed and those who are self-employed.

The traditional two way split between employee and self-employed worker remains in force in Ireland, with decisions on the status of a worker being reached on this basis at the Workplace Relations Commission.

Gig economy workers tend to rely on one organisation for the bulk of their income, yet enjoy greater autonomy and flexibility.

Young female workers participate in the gig economy, however, research has revealed a particularly high gender pay gap in this area of the economy.

In the UK, a hybrid status of worker has come into being as part of an effort to regulate the contracts of workers who rely heavily on one income source.

Despite this, many employers have fought to deny the existence of an employment relationship in many cases.

This has resulted in a series of high profile legal cases and judgements in Britan involving both Uber and Deliveroo.

The Court of Appeal ruled by two to one against Uber last December following two decisions of employment tribunals though an appeal is likely to be heard at the Supreme Court.

The judges in the majority concluded that there was a “high degree of fiction in the wording of the standard agreement between Uber and its drivers” after the company sought to argue that they were independent contractors with few employment rights.

The dissenting judge, Lord Underhill, concluded that the drivers were equivalent to standard minicab drivers. He added that it was up to the UK government to introduce statutory measures aimed at conferring greater protection on such workers.

Mark Freedland, emeritus professor of Employment Law at Oxford University, has noted the increased prevalence of service-based models in employment relations.

“We are all becoming platform workers,” he says, including universities and solicitors and even government departments.

But one result is that both employment and tax regimes have become increasingly fragmented.

Under Irish tax law, a person may be required to file an income statement under the self-assessment system where their income is still very modest.

Businesses relying shamelessly on the fiction that their workers are self-employed contractors are cheating wider society of considerable revenues. It amounts to a form of evasion of responsibilities as damaging as old-style tax evasion.

In March, Fianna Fáil’s spokesperson on social protection Willie O’Dea introduced a bill on bogus self-employment to deal with what he termed a “pernicious and growing problem”.

He has argued that the State is faced with a “substantial loss of revenues” and “the deprivation of rights of workers”.

As the Financial Times put it recently, “something is seriously wrong with the world of work and technology, deregulation and the decline of trade unions lies behind this state of affairs”.

More in this section

Budget 2022 Logo

What impact will this  year's budget have on you and your business.

The Business Hub

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up