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Employment Status - Gig Economy

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It looks like the key employment law issue for 2017 will be employment status. In recent months, there have been cases affecting a range of workers operating in the ‘gig economy’ where employment tribunals have held that they are entitled to paid holiday under the Working Time Regulations and to be paid at the rate of the National Minimum Wage. Some of the press coverage has struggled with the idea that individuals who are classed as ‘self-employed’ are actually entitled to a range of employment rights, but there is nothing unusual or surprising about this. The fact that someone is self-employed for tax purposes simply means that they are not an employee employed under a contract of employment. They can still be entitled to rights afforded to ‘workers’ – those who have a contract to perform work, but who are not running a business independent of the ‘employer’. They therefore qualify for working time and minimum wage rights (an important consideration given that the minimum rate for those aged 25 or over is now £7.50 per hour – but do not qualify for key rights such as maternity leave, redundancy pay or protection against unfair dismissal.

This longstanding distinction between employees and workers may now come under increased scrutiny. The Matthew Taylor review into Modern Employment Practices has the backing of the Prime Minister and is due to report this summer. It is a wide-ranging review looking at how Government can promote high quality work and working practices – but it is almost certain to address the employment rights of those not currently treated as employees. Many are making the case for equalising the employment rights of all those who are not actually operating their own business and that would certainly make it easier for the Government to end the distinction in taxation between the employed and the self-employed. It is starting to feel as though change is in the air. On the other hand, with the triggering of Article 50, the Government may have its hands full for the foreseeable future.

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