Technology has driven huge changes in the nature of work, and the rate of change shows no signs of slowing. As one aspect of this, the web and ubiquitous mobile computing has created whole new models of the relationship between demand and supply, as exemplified by the Uber (or Airbnb) business model.
In some ways the Uber model makes perfect sense – convenient and flexible, an efficient use of resources. The problem that emerged was the treatment of the drivers – are they contractors or workers? A landmark decision clarifies this question in the UK and sets a very useful precedent:
Uber loses right to classify UK drivers as self-employed
Landmark employment tribunal ruling states firm must also pay drivers national living wage and holiday pay with huge implications for gig economy
Uber drivers are not self-employed and should be paid the “national living wage”, a UK employment court has ruled in a landmark case which could affect tens of thousands of workers in the gig economy.
The ride-hailing app could now be open to claims from all of its 40,000 drivers in the UK, who are currently not entitled to holiday pay, pensions or other workers’ rights. Uber immediately said it would appeal against the ruling.
Employment experts said other firms with large self-employed workforces could now face scrutiny of their working practices and the UK’s biggest union, Unite, announced it was setting up a new unit to pursue cases of bogus self-employment.
The Uber ruling could force a rethink of the gig economy business model, where companies use apps and the internet to match customers with workers. The firms do not employ the workers, but take commission from their earnings, and many have become huge global enterprises. Uber now operates around the world, with the company valued at more than £50bn.
The decision of the employment tribunal comes amid mounting concern within government about the growing trend towards self-employed workforces. The government has recently announced a six-month review of modern working practices and HMRC is setting up a new unit, the employment status and intermediaries team, to investigate firms. …
A victory for workers and their rights. See also: Uber ruling is a massive boost for a fairer jobs market.
It is worth noting once again that the only party in NZ actively monitoring and exploring issues like this is Labour with its Future of Work Commission.