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Gig economy workers ‘hit harder’ financially

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Half of Brits (49%) working temporarily or doing contract paid work for a mobile app or website said they have taken ‘desperate measures’ to survive financially, research by the Income Protection Task Force (IPTF) has revealed.

This includes measures such as using food banks, shoplifting, gambling, drinking or taking a payday loan – less than 10% of those not working in the gig economy admitted to living like this.

The figures also show that a quarter (26%) are living paycheck to paycheck, however this rises to 31% for those working in the gig economy.

Fuelled by the growing online marketplace, the gig economy is predicted to be worth around £43 billion globally in 2020 (according to PwC) and there are an estimated 10 million gig economy workers in the UK.

The survey of 2007 UK adults showed that more than a fifth of gig economy workers (21%) had taken out a payday loan, 14% have gambled, while another 14% had used a food bank. Alcohol has served as a coping mechanism for 13% and 8% admitted to shoplifting. Over a quarter (26%) said they have had to borrow money from family or friends between pay days.

Sick leave?

The IPTF survey found that 44% have been unable to work for longer than three months, compared to 25% who do not work in the gig economy, while 38% said they would be unable to work for no longer than three months without work and 21% could not cope for more than six months.

Of those off work, a third (33%) said it was due to accident or injury, compared to 13% of non-gig economy workers. Physical health (38%) was the biggest reason for long-term sick leave, while one in five (19%) were off due to mental health issues. Meanwhile, 14% could not work due to disability.

Evan Odell, researcher at Disability Rights UK, said: “Rather than providing workers with flexible working hours they can control, the rise of the gig economy has merely stripped away predictability of hours and earnings, and with that financial security and peace-of-mind.”

“This appears to have a particular impact on disabled workers attracted to gig economy jobs because of the supposed flexibility, only to find the stresses and lack of control can make their impairments more severe. The promised flexibility of the gig economy has benefited employers, but not employees. Disabled gig economy workers are also likely struggle to get reasonable adjustments put in place, access sick pay, become part of disabled staff networks or get employment rights support from trade unions.”

Returning to work

Four fifths (79%) of gig economy workers unable to work said they have suffer mental health issues as a result.

Thirty percent said they didn’t feel like the people assessing their ability to work took enough time to understand their situation, and 27% said they felt they had to go above and beyond to prove they couldn’t work.

To that end, 95% of gig economy workers who have been long-term sick felt pressured to return to work before they were ready – with 65% actually going back into work before they should have. This is many more than the 20% of non-gig workers who have been long-term sick and said they returned too early.

Roy McLoughlin, co-chair of the IPTF, added: “Because of the more temporary employment status of gig economy workers, their finances are likely to be hit much harder when they face ill health, and it can also have a huge impact on partners and other family members financially and emotionally. But with a little planning people can help safeguard themselves and their family from financial catastrophe.

“There are many ways that people whose work pattern doesn’t fit the standard mould can insure themselves against the financial impact of long-term ill health, that would continue to pay them an income when they can’t work – and it often costs a lot less than people think. We would urge people to seek advice from an independent life and health insurance specialist to find out the best options for protecting their income.”

Birmingham was found to have the highest proportion of gig economy workers (36%), followed by London (31%) and Glasgow (30%). Bristol (5%), Brighton (6%) and Nottingham (6%) were the cities with the fewest.

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A roadblock to the gig economy? UK Supreme Court classifies Uber drivers as “workers”

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In a landmark ruling, the UK Supreme Court has unanimously held that private hire vehicles drivers who provide their services through the Uber app were “workers” for the purposes of UK employment legislation: Uber BV and others (Appellants) v Aslam and others (Respondents) [2021] UKSC 5.  Earl Deng and Allison Wong discuss the decision and its implications for the gig economy in Hong Kong.

Hong Kong is known for being an employer-friendly jurisdiction, so it may come as a surprise to many that as long as 14 years ago, the Hong Kong Court of Final Appeal held in Poon Chau Nam v Yim Siu Cheung [2007] 1 HKLRD 951 that the status of an “employee” working under a contract of service under section 5(1) of the Employees’ Compensation Ordinance, Cap. 282 did not depend on the mere existence of a contract or necessitating dominant control over the worker in question, but must instead be ascertained as a matter of overall impression and to be determined on a case-by-case basis.

Since Poon, the rise of the gig economy through app or web portals has further muddied the waters with innovative business models and service agreements where the service provider no longer directly engages the worker to provide a service for its customers, but instead purports to act as a matching agent between a service providing worker and the ultimate paying customer and taking a portion of the fees.

The Arguments

In Uber, the appellants argued that pursuant to its service agreements which both the driver and the customer accepted and separately entered into, Uber’s role was simply as a booking agent for independent contractors who provide transportation services (“Driver”) and that the contract for transportation services was between the Driver and the end user (“Rider”).

The Supreme Court unanimously rejected Uber’s arguments on two grounds.

On agency, the Supreme Court rejected that any agency relationship arose on the facts, whether on the wording of the service agreements or any evidence of overt acts by the principal (i.e. Driver) to confer the necessary authority to Uber to act on its behalf.

On contract, the Supreme Court upheld its previous decision in Autoclenz v Belcher [2011] UKSC 41; [2011] ICR 1157 and clarified the theoretical justification for it.  Like PoonAutoclenz held that whether a contract gives rise to a relationship of employment is not to be determined by the ordinary principles of contract, but to adopt a test that “focuses on the reality of the situation where written documentation may not reflect the reality of the relationship”.  However, instead of focusing on the exceptional nature of employment contracts, the Supreme Court held that the rights asserted by workers under employment legislation are not contractual rights but rights under legislation, and therefore the Court is to determine whether for the purpose of that specific legislation, the claimant was an employee.

The Court went on to hold that the purpose of the employment legislation in the UK is to protect vulnerable workers from exploitation by providing minimum standards and conditions of work and therefore it would be inconsistent against this legislative background to use the contract as a starting point to determine whether an individual falls within the definition of a worker.

On the facts, the Court emphasised certain aspects of the relationship between Uber and the Drivers which tend to show that there was a relationship of employment, including:

(i) the fixed nature of Drivers’ remuneration with no bargaining power on the part of Drivers;

(ii) the fact that Uber dictated the terms of services;

(iii) Uber’s control over Drivers on their performance via inter alia cancellation penalties and performance metrics;

(iv) restrictions on Drivers from establishing any relationship with Riders.

Significance to Hong Kong

At first blush, this decision together with the CFA’s judgment in Poon suggest that the gig, literally, is up.

However, and like all “overall impression” cases, Uber BV case was confined to its facts and the evidence before the Court.  Uber BV’s position remains that the case is confined to a group of drivers in 2016 under those terms of service agreement.

In Australia, the Full Bench of the Fair Work Commission held in Amita Gupta v Portier Pacific & Uber Australia Pty Ltd [2020] FWCFB 1698 that workers delivering through the Uber Eats platform were not employees due to:

(i) lack of control over working hours;

(ii) no exclusivity to platform;

(iii) no requirement to wear a uniform, bear logos, or represent herself as a representative of Uber.

Deputy President Colman also noted that the factual matrix did not require the Court to consider whether there was an employment relationship as Uber was simply a commercial intermediary between restaurants, customers and deliverers. That judgment is now on appeal.

Also of note is the decision of the Supreme Court not to express any concluded view on arguments put forward by Uber that they were simply a payment agent (but which failed to establish on the facts and evidence), providing some support to Deputy President Colman’s views.

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NSW gig economy guide ‘penned by Uber’

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New guidelines from the NSW government aimed at improving safety in the gig economy may as well have been penned by Uber and ignore the compounding pressures leading to dangerous conditions for delivery riders, the Transport Workers Union says.

The NSW government established a taskforce to improve the safety of gig economy workers following the deaths of five delivery riders in the space of two months late last year. The Joint Taskforce on food delivery rider safety is led by SafeWork NSW and Transport for NSW, and is expected to unveil its final guidelines this week.

The guidelines were discussed and given the green light at the taskforce’s final roundtable, held in Sydney on Thursday.

But no delivery riders were present at this roundtable after the Transport Workers Union after its members quit the taskforce last week, labelling it “farcical” and criticising it for not taking stronger action.

At a press conference held below the roundtable meeting, TWU national secretary Michael Kaine said the taskforce’s final recommendations will do nothing to address the dangerous issues for delivery riders, including low rates of pay and scheduling pressure created by algorithms.

“This is not an action plan, it is an inaction plan. This guidelines process has failed to deal with the deadly pressures that are killing riders on our roads. It has left those deadly pressures untouched, unacknowledged and unregulated,” Mr Kaine said.

“It looks as though these guidelines have been penned by Uber or Deliveroo themselves. This government has caved into the pressure from these massive companies and accepted hook, line and sinker their version of how they want the world to look.”

NSW taskforce guidelines miss the point: Transport Workers Union national secretary Michael Kaine

Steve, a Deliveroo delivery rider, had taken part in the taskforce’s roundtable, but said he had also chosen to withdraw from it.

“I just feel it’s pointless to stay on with how it’s going about it at the moment,” Steve told the media.

“Reasonable pay is all we’re asking for, so it doesn’t compel us to rush from one place to the other. There is a clear link from our income stream to our health and safety. The problem with this taskforce is they’re ignoring it because they just want to talk about health and safety.

“But you have to link it with the core issues of why it’s happening. We need state government interventions, we need some kind of regulation in this economy otherwise there’ll be more deaths.”

Esteban, who is also a delivery rider, was recently injured after falling off his bike on light rail tracks in the rain while rushing to complete a job.

“I just don’t want this happening anymore,” he said. “Safety in this occupation is very critical and it’s something that’s not being taken into account properly. Fellow riders have died, most of them immigrants.

“I put myself in their shoes, and I imagine what will happen with me and my family if I come to this country with a lot of dreams and suddenly I just died because of a lack of safety in my job. It’s very disappointing.”

The launch of the taskforce came with renewed hope that action would be taken to protect delivery riders, but this has now been “extinguished”, Mr Kaine said.

“That’s what the NSW government is going to announce in the coming days, that it is extinguishing hope that things will get better for riders in the gig economy,” he said.

“We were told absolutely that the government would take no regulatory steps to improve conditions for riders, it would take no steps to ensure that responsibility was placed on these behemoths and would not listen and not take into account or acknowledge the key pressures that exist that are creating these problems.”

Do you know more? Contact James Riley via Email or Signal.

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Deliveroo share price rise shows investors aren’t bothered about gig economy workers | Comment & Opinion

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Deliveroo rider Subway

It’s understandable some Deliveroo riders opted to go on strike this week. While CEO Will Shu and early investors have made hundreds of millions (despite the IPO flop), a damning report last month found many are paid less than the minimum wage; only a handful qualified for the maximum £10,000 bonus; and none got employee share options either as, despite their blue Roo uniforms, and in some cases years of service, it’s just a gig. 

Trouble is, the striking riders not only have no worker rights: they have no power. Courier work promises some pay instead of none, and it seems there are many more ‘scabs’ willing to keep gigging among the 50,000 riders than the few hundreds reportedly on strike. With a low barrier to entry – a pedal bike – there’s also an easy pipeline among the 693,000 fewer Brits on a payroll since February 2020 as its recruitment of 25,000 extra riders last year proved. And some riders like the gig, and fear changes would mean less flexibility to work when they want.

True, concerns about the fate of Deliveroo’s gig economy workers led City fund managers, including Legal & General and Aviva, not to invest (albeit more likely concerned due to the potential impact on their investment than on ethical grounds).

But this week, as retail shares in Deliveroo started trading, the share price went up, despite the strikes – albeit fractionally – indicating everyday investors aren’t bothered.

Perhaps real change will come when Deliveroo’s supermarket and fast food chain partners start getting tarred with the exploitation brush. A few big names pulling out of the platform would surely bring some change.

Or perhaps some of Deliveroo’s rivals can make more of the rights they afford their riders. Just Eat CEO Peter Duffy said recently that the gig model had led to the worst working conditions “in a hundred years”.

But the most likely agent of change is the courts. We’ve seen Uber lose its legal fight. If a rider strike won’t harm Deliveroo, losing its gig workers would be much more damaging to its business model. And you never know, Chancellor Rishi Sunak may also impose a digital delivery tax. That would nuke it.

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