The gig economy: beneficial or exploitive?

The gig economy is ‘a labour market characterised by the prevalence of short-term contracts of freelance work, as opposed to permanent jobs’. Depending on who you speak to it is either a great new way of offering workers flexibility or it is an environment which gives way for the exploitation of vulnerable workers who often have no choice but to except this type of job. Those who say that it gives people flexibility often emphasise the fact that many people who choose to enter the gig economy may not have time to commit to a regular job. They may have other commitments that mean should they be given fixed hours, they might leave the jobs market altogether.

Those who argue that the gig economy is exploitive often point to the fact that some people who participate in the gig economy have no choice in the matter. Some areas of work are dominated by the gig economy. For instance, many delivery services are dominated by the gig-economy and those who wish to find stable employment in this area may struggle. There is a debate currently being played out both by judges and politicians over whether these workers should be classed as ‘self-employed’. The recent death of Don Lane, who was fined for taking a day off to see his doctor, has only contributed to the feeling among many that classing workers in the gig economy as ‘self-employed’ is exploitative.

Prime Minister Theresa May has promised to improve the rights of these workers and hired Matthew Taylor to produce a report on this area of the economy. If implemented the report would see companies like Uber being able to retain some level of flexibility overpaying the minimum wage of £7.50 an hour for 25-year olds and over whilst having to pay tax, holiday and sick pay. Self-employed workers do not receive the same protections as those who are employed. This has led many in the gig economy bringing action in court to try to gain recognition as ‘workers’. However, last November, a tribunal ruled that Deliveroo riders in north London were not workers and were therefore not entitled to basic employment rights. The Central Arbitration Committee came to their decision because the riders could find substitutes to perform their job. Under current UK law, anyone who has this right is self-employed and therefore not entitled to collective bargaining rights.

Following this decision, Deliveroo was criticised by a solicitor at Leigh Day, (the firm which brought the legal challenge) Anne Powell, who argued that the ‘only reason they brought in the new contract was to defeat the union’s case’. The substitute clause in question was added by Deliveroo just 11 days before the hearing. Nevertheless, Deliveroo maintains that they regularly update their contracts. Ultimately, it appears most politicians agree that the gig-economy is on some level exploitive. For real change to take place, the government and parliament must change and update the regulations over what employment and self-employment look like. This will ideally empower the courts to take more drastic action against a practice that, while beneficial to some, sees many workers without basic employment right.

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