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Knowing your employment rights: the case for reforming employment status law

27 June 2017

Most of us know, roughly, what our rights at work are: that our pay is a certain amount, that we should get sick days and holiday, and can't be arbitrarily fired.  But for people working in the ‘gig economy’ or other less conventional working arrangements, understanding whether you're an employee with all those rights, genuinely self-employed and so must fend for yourself, or that grey "worker" area in between, is complicated.

You need to wade through complex law spread across many acts of parliament and decisions of judges to even begin to decipher it.

So there's almost universal agreement that the different employment statuses should be simplified. Many in the union movement have campaigned for easier to understand employment rights. At the same time 75 per cent of the Institute of Directors members say that they would support clear legal definitions. Unfortunately, while everyone agrees that the law should be made clearer, they also all agree that doing so is fiendishly difficult, if not impossible.

Undaunted by the scale of the challenge, in our recently published report - Better employment law for better work - we propose some clearer definitions for what it is to be an employee, a worker, or self-employed.

The main principle underpinning our attempt to clarify the law was the balance between amount of control an organisation has over someone working for them and what obligations they owe that person.

In February 2017 Travis Kalanick, who at the time was CEO of Uber, was filmed having a blunt conversation with one of Uber's drivers.  The driver had complained that Uber was making him bankrupt because “You’re raising the standards, and you’re dropping the prices.” to which Kalanick responded that “Some people don't like to take responsibility for their own s**t."

The problem with Kalanick's assertion was that Uber does not allow drivers to take responsibility for their own situation. The Employment Tribunal case into the status of Uber drivers showed that Uber is in complete control of the financial arrangements - including being able to arbitrarily reduce fares. Uber allocates rides to drivers without telling them the location of the journey or how much the driver will earn, nor does Uber allow the driver to form a relationship with passengers.

The Law Society does not take a view as to whether certain business models are positive or negative. Uber's ability to create a distinct brand and standardise the service offered is undoubtedly attractive to potential passengers. Our interest is in making sure that the employment laws decided by parliament work in the modern economy. If Uber insist on having such control over the way their drivers work then it must take responsibility to make sure their drivers receive at least the national minimum wage, plus holiday and sick pay.

If the definitions of each employment status can be made clearer there will be fewer disputes as to what employment rights different types of workers are owed. Both businesses and workers can get on with the job, with greater confidence that everyone is getting the rights and obligations they are entitled to.

Tags: employment law

About the author

Nick Denys is the policy adviser who leads on employment and family law matters at the Law Society.

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