Another blow to the gig economy

Another blow to the gig economy

Following the recent landmark tribunal rulings for Uber and Hermes drivers, London Taxi company Addison Lee now face a £39 million bill as their taxi workers are once again classed as workers rather than self-employed.

The Employment Appeal Tribunal upheld a previous decision classing the company’s taxi drivers as workers rather than self-employed contractors. The GMB Union have said the ruling is ‘another huge win for workers rights.’’

Following the Uber and Hermes drivers rulings, the employment tribunal have yet again decided that the company’s drivers are legally entitled to certain employment rights including national minimum wage and holiday pay. The company has around 4,000 drivers and is now being called upon to extend employment rights to all their drivers.

According to the union’s solicitors, Leigh Day the decision could cost Addison Lee up to £10,285 per driver in making good unpaid holiday pay and ensuring wages were up to national minimum wage standard over the past 2 years.

Sue Harris, GMB union's legal director, said 'Other employers should take note - GMB will not stop pursuing these exploitative companies on behalf of our members.'

Liana Wood, solicitor at Leigh Day who represented the drivers of Addison Leigh stated 'We hope that Addison Lee will accept this decision; drivers shouldn't have to continue to work very long hours, often in excess of 60 hours per week, to earn just enough to meet their basic living costs.'

The taxi firm Uber has been involved in a similar legal battle for the last few years. In 2016 2 drivers won at tribunal over paid holiday, arguing they were in effect employees. But last month at the Court of Appeal Uber argued that the previous decision had 'erred in law' by ignoring its contracts, and that the relationship between the company and its drivers is 'typical of the private hire industry' and had been used for years. The decision is awaited with interest.

Hermes lost its battle with 65 drivers in another blow for businesses who have thrived thanks to the gig economy which employs more than 5million people in the UK.  A tribunal has ruled that the 65 people who brought claims should be treated as staff with perks including sick and holiday pay and paid breaks while delivering packages for customers. 

What do these rulings mean for Employers?

Classing an individual as a ‘worker’ entitles them to certain employment rights such as the national living wage, paid holiday and sick leave which evidently means increased costs for employers. It is for each an employer to consider its own situation carefully with an eye on the law as falling foul may entitle staff to retrospective compensation.

A useful guide can to determine employment status can be found following the link below.

http://www.acas.org.uk/index.aspx?articleid=5071

If you require further assistance contact one of our experienced staff at our Employment team.

New employment rights raise another red flag for employers

New employment rights raise another red flag for employers  

Who’s who on the payroll is an ongoing challenge for employers in the run up to new payslip requirements 

New payslip requirements are set to come into force, requiring itemised calculations for variable rates of pay and hours worked. Alongside, the requirement for payslips will be extended to include workers, not just employees.  

The two amendments to the 1996 Employment Rights Act will come into force on April 6 2019.  From that date, employees and workers, including those under casual or zero hours contracts, must receive correctly detailed written, printed or electronic payslips. 

The greater transparency is designed to help employees understand their pay and see if they are being paid correctly.  Also, it is hoped that it will make it easier to identify if employers are meeting  their obligations under the National Minimum Wage and National Living Wage and that holiday entitlements are correctly applied.

But while the change itself is straightforward, new payroll procedures and alternative software may be needed to satisfy the new requirements.

Alongside, a more complex question for many companies when it comes to implementing the new requirements will be whether someone is an employee, a worker or a self-employed contractor. 

Many organisations do not recognise that even where someone is not an employee, they may still be categorised as a ‘worker’ and be entitled to certain rights such as the national living wage, paid holiday and sick leave.  An employee may also be a ‘worker’, but with extra employment rights and responsibilities. 

And the boundaries as to who is a worker and who is self-employed are increasingly difficult to pin down following high-profile cases involving Uber and other so-called gig economy companies, with individuals winning the right to be treated as a worker, rather than a self-employed contractor. 

“Many employers are not meeting legal minimum requirements because they do not understand their employment law obligations when it comes to workers.  It’s hoped that this new process will be one step towards improved awareness,” explained Employment  expert  Elissa Thursfield. 

“The distinctions between an employee, a worker and a self-employed contractor may not be clear cut for some organisations, so it’s important to keep abreast of what’s going on in employment law and what legislative changes are coming up.  That way you can keep ahead of the deadlines and make sure you’re facing up to issues that may otherwise pose difficulties later.” 

What needs to be included in the written statement of wages ·       the amount of gross wages or salary ·       for any part that varies according to time worked, the total number of hours worked and the rate of pay, either as a single aggregate figure or separately for each type of work or rate of pay ·       the amounts of any deductions and what they relate to  ·       the net amount of wages or salary payable ·       if paid in parts, the amount and payment method for each part

The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018

The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No. 2) Order 2018