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The ruling featured the case of drivers engaged on a self-employment basis with Uber, an online taxi service. The company has argued that its drivers were not employees but self-employed contractors.
However, the drivers won the right to be classed as workers rather than self-employed, which would entitle them to employment rights, such as holiday pay, rest breaks and the National Minimum Wage.
The 'Uber' business model is common among other some other delivery companies where its drivers are also classed a 'self-employed'.
The GMB union described the decision as a 'monumental victory'. Uber are intending to appeal.
Freelancer concerns
However, freelancers and their representative groups were guarded that this decision to protect perceived vulnerable workers should not extend to cover the independent, professional freelancer.
Freelancers will recall previous campaigns to ensure they were not caught up in legislation, which was originally intended to protect enforced self-employed, such as Agency Workers Directive, who were forced into self-employed status to deny them basic employment rights.
IPSE - Control
Self-employed and freelancer group, IPSE, urged that the decision should not discourage firms from engaging the self-employed.
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“We will be studying the full judgement carefully to consider its implications, but this ruling may have an impact on the wider gig economy. The recently launched review of employment practices takes on even greater urgency and importance in light of this ruling.
“However, Government must be careful not to dissuade firms from making use of the highly-skilled, on-demand flexible workforce as a whole. The vast majority of people who work this way made an active choice to do so and cherish their self-employed status. Research shows independent professionals innovate faster than any other group, and brought £109 billion to the UK economy in 2015.”
APSCo - Important distinction
Agency group, ASPCo, also identified that there was a need to differentiate between potentially vulnerable workers who need protection, and independent professional contractors who neither need nor want deemed employment rights from clients.
Tania Bowers, General Counsel at agency group, APSCo said: “This is a landmark case - while Uber classed its drivers as independent self-employed contractors who had the choice of where and when they worked, this ruling, if not successfully appealed, means that the drivers will be entitled to the minimum wage, paid holidays and breaks.
"While not directly affecting the professional recruitment market, the ruling will have a significant impact on the ‘gig economy’ where individuals work for multiple employers day to day without having a fixed contract.
"While it is right and proper for workers’ rights to be protected, it is important that the distinction is made between lower paid and potentially vulnerable workers who need this type of protection and professional contractors and interims who do not need – or indeed want such protection.
"Recruitment firms have been responsibly supplying compliant agency workers and professional contractors to the employment market for decades before the phrase 'gig economy' was coined and will continue to be an essential component of the flexible labour market.
"Nonetheless it is important that the recruitment sector does not get landed with the responsibility – and ensuing liability - for determining an individual’s employment status – as is planned by the proposed changes to IR35 legislation for workers in the public sector.
"We believe there is a need for greater clarity and we support the Review of Modern Employment to be undertaken by RSA Chief Executive Matthew Taylor at the request of the Prime Minister."
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Susie Hughes © Shout99 2016
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