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Gig Economy Turns the Spotlight on Who is Really Self-Employed


Originally appeared in the Irish Independent on 21 June, 2018. 

Another week, another gig economy legal development. Two high-profile decisions have just been issued in the UK, the foreign jurisdiction watched most keenly by Irish employment lawyers and HR practitioners. 

In the first, the UK Supreme Court upheld a decision that Gary Smith, one of 125 plumbers engaged by Pimlico Plumbers, was in fact a ‘worker’ for the purposes of UK employment laws.

Pimlico categorised Mr Smith as self-employed. However, the court found that “personal performance” was a dominant feature of Mr Smith’s contract, meaning he had little right to substitute in someone else to do the work.

He also had a company van and clothing, was required to work a minimum number of hours, and in reality had little control over his own business affairs. For all these reasons the court determined that he was in fact a worker and not self-employed.

Secondly, the UK High Court has given the IWUGB trade union permission to judicially review a Central Arbitration Committee ruling that found that Deliveroo riders are self-employed. Although the High Court decided on a human rights ground (that the ability of riders to freedom of assembly and association under the European Convention on Human Rights was not considered), the union is nevertheless claiming this as another victory for gig economy workers.

Despite these recent ‘wins’ for gig economy workers, conflicting decisions demonstrate the uncertainty in this area. While Deliveroo riders were determined to be self-employed in the UK, the Spanish Courts have held that a Deliveroo rider is in fact an employee.

And last year, the UK Employment Tribunal found that Uber drivers, who many would put in a similar category as Deliveroo riders, are ‘workers’ rather than self-employed. The only certainty unfortunately is that nothing is yet certain in this area.

The emergence of the gig economy has sparked much debate, with the alleged flexibility of short-term ‘gig’ work being weighed against the perceived unfairness of gig economy workers being treated as self-employed.

The important point is that in Ireland self-employed persons have no protection under employment legislation (such as a right to a minimum wage, annual leave, protection against unfair dismissal etc).

While UK case law has long been persuasive in Irish courts, these UK decisions should be read with a caveat in mind. In Ireland employment status falls under two categories: employee or self-employed. However UK law has a third category, that of ‘worker’. Workers are entitled to fewer statutory rights than employees, and in the various successful UK cases to date the claimants have been deemed workers rather than employees. So it remains to be seen how an Irish court would perceive these UK decisions.

What should Irish employers look out for? Until a true gig economy case is determined by a senior Irish court, we must apply existing ’employee versus contractor’ decisions. The two leading cases are Henry Denny & Sons (Ireland) Ltd v Minister for Social Welfare and Minister for Agriculture and Food v Barry .

What these cases say is that the written contract between the parties is not determinative and one must look at the reality of the arrangement. ‘Mutuality of obligation’ has become an important factor: is the company required to provide work and is the individual required to accept it? How much control is exercised by the company; can the individual use substitutes to do the work? Does the individual provide his/her own equipment? How integrated is the individual in the company’s business (does he work from the company offices, use a company email address, wear a company uniform, drive a company branded van)?

Unfortunately, it is not easy to apply the tests with certainty.

Legislation may help, perhaps following the UK example of ‘worker’ status, though one can imagine unions being up in arms about that.

However, the Competition (Amendment) Act 2017 introduced the concept of ‘false self-employed worker’ in Ireland for the first time – which could be a starting point.
And the fact that the Government announced last month that it is launching a public awareness campaign on ‘false self-employment’ shows that it is very much on their radar.

Employers should therefore be more cautious than ever about categorising persons as ‘self-employed’, especially ‘gig economy’ workers.

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