Companies should prove gig workers are not employees

Gig workers need more legal power to hold companies to account to make the gig economy fit for the future, according to a new report.

Good Gigs: A fairer future for the UK’s gig economy, published today by the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), recommends that the burden of proof be shifted to companies to prove gig workers are not employees, and that penalties should be strengthened against companies that include clauses that attempt to prohibit employment status litigation.

Tribunal fees for workers challenging their employment status should be scrapped, and tribunal rules should be modified to allow a fast-track summary process to give workers immediate clarity, the RSA argues.

RSA senior researcher Brhmie Balaram said: “Our survey – the biggest ever of its type – shows the potential for the gig economy to grow at great speed over the coming years.

“In the short term, this means we must tackle the debate about the employment status of gig workers and clarify the law.

“But to truly transform gig workers’ experiences of the labour market, we need an approach that goes way beyond legal housekeeping,” continued the report’s lead author. “That’s why we are urging Government and the gig economy industry to collaborate and create a good work charter which sets out how gig workers can have fulfilling working lives.”

Legal changes on employment status alone are insufficient to transform workers’ experiences in the gig economy, argues the report. Without other wider reform, the combination of technological change and market power could harm gig workers’ wellbeing in the long term.

The report recommends that Government collaborates with gig economy companies and workers to create a Charter for Good Work in the Gig Economy, setting out “how the sector can support career development and professional fulfilment”.

Luxembourg-based online payment company Mangopay, which supported the RSA report, recommended addressing issues of capital, culture and market distortions through greater investment in “worker tech” and sustainable business models.

Céline Lazorthes, founder and CEO, said the gig economy creates “non-traditional dynamics” between employers and workers: “Over the coming years, we will require innovation to enable and facilitate this new working style.

“Traditional institutions, such as insurance companies and banks, must respond to the increasing need for flexibility of process. The market must adapt and design solutions that create a positive impact for those working in the gig economy today.”

The RSA undertook the largest ever survey on the UK’s gig economy, which revealed that:

• there are currently 1.1 million people working in Britain’s gig economy;
• almost one in five of the working-age population – 8 million people – would consider some form of gig work in the future; and
• young people are particularly attracted to gig work. One-third of the gig workforce is aged between 16 and 30, compared with 11% of other self-employed workers and a quarter of employees.

RSA chief executive Matthew Taylor is currently undertaking an independent review of modern working practices, including the issues surrounding worker status in the gig economy. His review is independent of the RSA and was commissioned after this project on gig workers had begun.