EPL and the "gig" economy

At the heart of all issues between the gig economy and employers is the question of whether those working as freelancers or on short-term contracts should be considered workers.

For every official statement, ruling, or report suggesting they are not workers is another statement, ruling or report saying they are workers.

The implications are significant. If those working in the gig economy are workers, then they are entitled to the rights that all workers have. This includes protection under employment law. In 2016, two drivers for Uber successfully argued that they were employed drivers (workers) and were entitled to receive the national minimum wage, paid holidays and other employment rights. In April 2017 Uber was granted the right to appeal this Employment Tribunal decision.

Recently, in the UK, the Pimlico case gained a lot of attention and in that instance the court found in favour of the plumber and not the company. Many companies are now relying on the courts to make a determination. Similar cases are pending, with appeals likely to follow any ruling.

Although a clear and binding definition of those in the gig economy is likely to be a long way off, the implications for companies hiring in this manner are clear. If you hire through the gig economy, you may be still be at risk of liability under employment law. Simply put, an EPL policy protects a company from the impact of employment actions such as damages, settlements, and judgments brought by employees or in some cases a third party. Further, it will cover the defence costs for such actions.

On the up

Data shows a consistent increase in those working as freelancers in the gig economy both in the UK and around the world. What data does not show is how many of these individuals want to be considered employees. Many of them have chosen the gig economy because of its flexibility, independence from office politics, unlimited earning potential, and freedom to accept and reject jobs based on suitability.

It is possible that the gig community itself is unsure whether they want to be covered by employment law, which for many could feel like a step backward. What is certain is that some of these people will continue to use legal means to pursue what they feel are their rights to benefits that all formal employees already receive.

Moving forward

Until the debate is settled, EPL is an important and prudent inclusion for all companies that outsource any of their work to the gig economy. Failure to do so leaves them vulnerable to an unknown threat of liability from multiple sources. 10 years ago, the gig economy was barely on the radar for corporations. 10 years from now it will be the biggest source of contract fulfilment for many industries. In the meantime, companies must protect themselves, and continue with the best solutions for their labour needs while the debate rages on around them.

Speak to us today to find out if you have the right coverage in place or see our EPL product page for more information.


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