The UK government has announced a package of labor market reforms to respond to changes in working patterns including those driven by the rise of gig economy platforms and apps like Uber and Deliveroo.
It’s billing the move as an expansion of workers rights — saying “millions” of workers will get new day-one rights, as well as touting tighter enforcement of sick and holiday pay rights.
“We recognise the world of work is changing and we have to make sure we have the right structures in place to reflect those changes, enhancing the UK’s position as one of the best places in the world to do business,” said prime minister Theresa May in a statement.
“We are proud to have record levels of employment in this country but we must also ensure that workers’ rights are always upheld. Our response to this report will mean tangible progress towards that goal as we build an economy that works for everyone.”
The reforms — which the government has dubbed a ‘Good Work Plan’, saying it will for the first time be “accountable for good quality work as well as quantity of jobs” — follow rising criticism of conditions for workers in the gig economy, and a number of legal challenges including by a group of UK Uber drivers who used an employment tribunal in 2016 to successfully challenge the company’s classification of them as self-employed contractors.
It also follows a government-commissioned independent review of modern working practices, conducted by Matthew Taylor and published last summer. The government says it’s acting on all but one of the Taylor report recommendations.
(The one exception being changes to tax rates which, unsurprisingly given its prior U-turn, is confirmed as entirely off the table. “The employment status consultation makes very clear that changes to the rates of tax or NICs for either employees or the self-employed are not in scope,” it emphasizes on that.)
“The Taylor Review said that the current approach to employment is successful but that we should build on that success, in preparing for future opportunities,” said business secretary Greg Clark in a supporting statement. “We want to embrace new ways of working, and to do so we will be one of the first countries to prepare our employment rules to reflect the new challenges.”
The government claims it’s going further than Taylor’s recommendations — specifically by planning to enforce
- vulnerable workers’ holiday and sick pay for the first time
- a list of day-one rights including holiday and sick pay entitlements and a new right to a payslip for all workers, including casual and zero-hour workers
- a right for all workers, not just zero-hour and agency, to request a more stable contract, providing more financial security for those on flexible contracts
The 2016 employment tribunal judgment that reclassified the group of UK Uber drivers as workers gave them entitlement to benefits such as holiday pay and sick pay.
The ruling also paves the way for other legal challenges to be brought by gig economy workers. And while Uber continues to appeal against it the company has also responded to rising legal risk and political pressure over gig economy working conditions by introducing some subsidized insurance products for workers on its platforms. So, in case law terms, the direction of travel for legal liabilities in this area seems fairly clear.
As well as tightening up the enforcement of workers rights, the government said it will be raising fines for employers that show “malice, spite or gross oversight”, as well as considering raising penalties for employers who have previously lost similar cases.
It will also be introducing a new naming — and, clearly, shaming — scheme for employers who fail to pay employment tribunal awards.
While the government is very clearly signaling an intent to bolster gig economy workers rights, plenty of questions about its reform plan remain at this stage — such as, for example, how it intends to define “vulnerable” workers, and how explicitly it will codify the planned changes and/or write them into law.
Responding to its announcement today unions were generally critical, arguing it’s not going far enough.
Some also accused the government of seeking to kick the problem into the long grass. In a response statement, IWGB union general secretary, Dr Jason Moyer-Lee, added: “Similar to the Taylor review itself, the announcement is big on grandiose claims, light on substance.”
The reforms certainly lack detail at this stage — not least because the government has announced no less than four consultations to, as it puts it, “inform what the future of the UK workforce looks like” — so it’s not possible to determine what will be the final shape of employment law in this area. (Nor, therefore, assess impacts on gig economy platforms.)
Among the consultations announced today is one on employment status, and another on measures to increase transparency in the labor market — with the government committing to define ‘working time’ for flexible workers who find jobs through apps or online “so that they know when they should be being paid”.
How to define working time for gig economy workers who may be simultaneously logged onto multiple apps has been a bone of contention in legal challenges in this area. So the government providing clarity would certainly be welcome. Though how exactly it will clear up that issue when platforms and apps can be so variable remains unclear.
Discussing the overall reform plan, Sean Nesbitt, a litigator on employment issues at law firm Taylor Wessing, told us: “The government is looking to make a big statement about their commitment to reforming and making fit for purpose modern work for the 21st century but, although there’s a broad commitment and a big statement, there’s not too much detail as to what they’re proposing.
“I don’t think they are booting it into the long grass… I think there’s still a desire there to make a large correction. I don’t think it’s necessary a big change but a large correction to make sure the market understands how work is to be run in the UK.
“But I also think that, as is characteristic of this government, they’re cautious about rocking the boat and they’re trying to build consensus — so four separate consultations is a way of managing the risk that they take too strong a position and can’t deliver it.”
“Keeping up momentum is good,” he added. “But it’s hard for business to judge when implementation will occur and precisely what.”
Also today the government said it will work with industry “over the coming months” to look at ways to encourage the development of online tools for self-employed people — to “come together and discuss issues that are affecting them”. So more details should emerge soon.
While the full implications of the reform are not yet clear, Nesbitt believes case law gives a strong steer — perhaps especially in the instance of Uber. Given that judges in Europe have pretty consistently ruled against the company’s claims it’s just a tech platform or a dispatching agency in recent years.
“It is hard to see the detail of the shape. What we can see is that the government, like Taylor and like the parliamentary committee that made 11 recommendations recently, all intend to keep the three statuses of employee, worker and dependent contractor. So that shape we can see staying,” he told TechCrunch.
“There is then intended to be clarification as to how you tell the difference. That isn’t clear what that clarification will look like but I believe it will be based on existing case law — including of course, notably, the Uber litigation.”
“I feel there is quite a lot of certainty around the determining features of those three [employment] statuses are already,” he added. “Where I think the really useful piece could come is if the government regulates to define what working time is for platforms. They say they’re going to.”
Nesbitt points out that many platforms don’t accept the view that a worker being logged onto their app and waiting time constitutes ‘working’. So if the government were to legislate on it it could help inject a little more certainty into the gig economy — for players on both sides.
“The government could find a way forward and say well it isn’t necessary being logged on that’s the determining feature — you have to be actively working or at least committed to the exclusion of other opportunities,” Nesbitt suggested. “So they could find a way to do it — but it’s not clear when and how they’re going to do it.”
“The judge in the Uber case said… working time is when the driver for Uber is logged onto the app and is available for a ride. Now lots of other apps — your Deliveroos, your JustEats, your healthcare or beauty services apps, catering apps — will say obviously if they’re logged onto five of us, being logged on or available on its own can’t be working,” he continued.
“If you’re on JustEast or Deliveroo or a restaurant’s own waiting app, you’re not doing anything and you’re not excluding the others — especially if their terms of service don’t punish you for logging out or for not taking a job.
“It’s quite possible the government could legislate to say… it isn’t necessarily being logged on that’s the determining feature. You have to be actively working or at least committed to the exclusion of other opportunities. And I think that would enable both views to be upheld.”
“The judge in Uber basically said the key reason I say that being logged on for Uber counts as working time is essentially that they are so dominant in the market that it makes it very hard to take any other jobs without risk of falling foul of their benching provisions that log you out if you don’t take jobs. And because they are so dominant. Where there is more competition it may be that logging on is not to be considered working time,” he added.
The government’s timeframe for running its four consultations and firming up the shape of the reform isn’t clear. But such consultations rarely take less than three months — if not six.
By which time the next round of Uber’s appeal against the 2016 tribunal ruling will have reached the UK Appeals Court and there will likely be more case law for it to draw on to feed its thinking.
“What I don’t see in the government press release is any attempt to short circuit or override the litigation process,” added Nesbitt. “It’s almost as if this consultation process is designed to run in parallel to the court process — the sort of privatized testing of what the law is that Uber and the unions are engaged in.”
So don’t expect a more finely detailed employment law reform plan to emerge before fall.