‘Zero-hour contracts’, ‘worker status’, ‘gig economy’, ‘self-employed contractors’ – all words and phrases you may have heard in the past year. Particularly alongside details of high profile legal cases, involving the likes of Uber, where workers are challenging their employment status.
So, what’s all the fuss about?
Modern approaches to employment are seen on one hand to offer flexible hours and better work-life balance. But on the other hand are heavily criticised for being exploitative, offering little employment protection and fewer rights.
Zero hour contracts are blamed for failing to offer a steady flow of work and income for individuals.
Self-employed gig work is criticised for failing to offer basic employment rights, including holiday and sick pay, pension and the National Living Wage.
Uber, CitySprint and Pimlico Plumbers have all seen successful claims from individuals challenging the employment rights of ‘workers’ and their ‘self-employed’ status. Courts seem increasingly disapproving of employment arrangements masking workers as being ‘self-employed’ and their failure to offer basic rights. The increasing numbers of cases creates a growing consensus that employers have too much power. Yet, there are surveys that illustrate individuals appreciating the flexibility of such working arrangements.
Matthew Taylor, Chief Executive of the Royal Society of Arts recently published a Review of Modern Working Practices for the Government. He considered the implications on workers rights and concluded that flexibility is strength of the UK labour force, but insists that this must be with fair employment in return.
Taylor’s recommendations included:
- Platform-based companies, like Uber and Deliveroo, workers should be classified as ‘dependent contractors’ and receive additional benefits.
- Zero-hour contract employees to be able to request minimum hours (after 12+ months’ service).
Taylor’s review received union and legal criticism for not being bold enough in its recommendations to make sufficient changes for gig-economy workers. Teresa May has promised that the report’s recommendations will be taken seriously, so we could see some future employment law changes. Further development is needed in this area that sees equal benefits of these contract types for both workers and employers.
We recommend that our clients remain aware of the following advice:
- Organisations should be clear on the type of employment they want to offer:
- Are you a flexible employer offering modern working practices such as the ones above?
- Or do you want to take a more traditional 9-5 route?
Furthermore they should ensure sufficient HR resource to provide oversight of these contract types.
- As the Government reviews Taylor’s recommendations, Housing Associations should keep up-to-date with any resulting employment law changes.
- If applicable, conduct a review of any zero-hour contracts – it is more likely you have these if you are from an organisation offering care.
- Housing Associations should carefully review their contractor arrangements and should protect themselves against claims of worker status. Two tests to assess the correct employment status are:
- ‘Control’ – the higher the level of control an employer has over an individual (e.g. autonomy to complete work) the more likely they are a worker, not a contractor. A self-employed person will be able to exercise independent control over how the work is carried out.
- ‘Substitution’ – self-employed individuals will have the right to appoint another to delegate work to and not necessarily complete the work themselves – a worker is expected to complete the work themselves.
- Also consider your supply chains (e.g. maintenance contractors) and if you are comfortable with the employment practices they have in place.
- Consider what you can do to support your residents who may be impacted themselves by the similar working statuses (e.g. unguaranteed employment hours from zero-hour contracts, or no entitlement to sick pay if self-employed) and therefore any difficulties paying rent during periods of sickness or low employment.
If your organisation needs any help in these or any other areas of HR Advice, please contact Kimberly Wallace on 07585 954 218 or email at email@example.com