What does the gig economy mean for your business?
Does this freer, more fluid way of working mean your business can source the manpower it needs in a cost-effective way, enabling you to scale your workforce according to business demands? Or is it a way of avoiding some of the cost burdens associated with permanent staff, such as the right to statutory sick pay and paid annual leave?
When approached in the right way, the gig economy can give individuals the flexibility to structure work around their personal lives. However, several high-profile cases involving well-known employers in recent months have highlighted how the self-employed classification of such workers may work to their detriment.
Earlier this week, Margot James, parliamentary under secretary at the Department for Business, Energy and Industrial Strategy, invited HM Revenue and Customs (HMRC) to consider investigating working practices at Hermes, including pay levels for its couriers.
Her actions follow concerns raised by MP Frank Field, who on 12 September also published a report co-authored by Andrew Forsey, which included testimonies from 78 current and former Hermes workers, and stated that some couriers, who are classified as self-employed, are paid an hourly rate below the national living wage which is set at £7.20 an hour for those over 25.
As the couriers are classified as self-employed, they are not entitled to certain employment rights and it is not mandatory for them to be paid the national living wage.
Hermes is not the first organisation to be taken to task over such issues. Uber, for example, has seen legal action brought against it to establish whether drivers should be classified as self-employed or as workers, which would ensure they are entitled to employment rights.
While it is a positive step that such issues associated with the gig economy are starting to be recognised and addressed, time will tell how these will play out in tangible actions.
As working patterns become increasingly flexible, due to technological developments, business needs and employees’ preferences around work-life balance, shouldn’t supporting employees in the gig economy be a natural extension of organisations’ people strategies, rather than something that individuals have to fight for?
After all, surely there will be few that argue against the fact that establishing minimum protections around employment rights and entitlements in a gig economy will benefit employers and employees alike.