90 seconds on … The Gig Economy – back to the future?

What is the ‘gig economy’? This is the new world of workers without employers, putting together an income from a series of ‘gigs’ or tasks. It contrasts with the world of traditional employee jobs.

A Blue door

Is this new?

Talk of Uber and zero hours contracts is very much in the news but historically London was one big gig economy, with people hired intermittently and paid by the ‘piece’ or task. For instance, the carpenters working on the timbers of London Bridge were paid per tide.

Why does it matter?

If you are an independent contractor, you have few employment rights. Compare this to a ‘worker’ who is entitled to the minimum wage, sick pay and holiday pay or an employee, who has the most rights of all. Often it’s a grey area as to which category you fall into. As a business you need to know your legal responsibilities and costs. As an individual, you also need to know your rights and restrictions.

What for the future?

McKinsey Global Institute estimated that in the US and Europe, of those ‘gigging’, some 70% are working independently because they like it. They want the flexibility to work when and how they want. That leaves 30% who are ‘gigging’ as a last resort. These can be vulnerable and the government is reviewing their rights, to ensure appropriate protection. The recent landmark tribunal ruling on Uber drivers being found to be workers, with associated rights, could be a wake up call to companies. Perhaps the future gig economy could mean companies letting workers themselves choose: one scenario where the company exerts some control in return for some protection; or another where the person working has more freedom but bears more risk. This could provide a fair balance of power and responsibility.

Please note the contents contained in this article are for general guidance only and reflection the position at time of posting. Legal advice should be sought before taking action in relation to specific matters.

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