Is the gig economy coming to an end?

Like it or loath it, the gig economy has become one of the UK’s largest employment areas in the last ten years.

Some say it increases productivity and output, others lament it as limiting job security and work life balance.

The night time industries in particular have been fairly reliant on the ‘gig’ employment. From live acts to bar staff, salaried workers just aren’t as feasible in an industry where business peaks and troughs week to week.

But the gig economy may be on the decline. The benefits to an employer of hiring on a job-by-job or zero hour contract basis, may become obsolete.

The discussion first started when ‘self-employed’ delivery cyclists in London complained that they were left out of pocket and without support if they became ill or injured.

Workers in other industries followed suit, most notably Uber Taxi drivers, saying that for all intents and purposes, they were working full time for companies, without receiving holiday or sick pay. They also claimed that due to the hours of work required, they couldn’t seek commission from other companies at the same time.

This argument came to a head this month, when a ground-breaking legal appeal case saw self-employed plumber, Gary Smith, successfully argue that he was entitled to minimum wage and holiday pay from his employers, Pimlico Plumbers.

Pimlico boss, Charlie Mullins says he will fight the decision, claiming Smith classed himself as self-employed, and took all the benefits of being self-employed.

So what will this ruling change?

From a general opinion point of view, probably very little. When Uber drivers took Uber to court, the judge famously said that ‘the notion that Uber in London is a mosaic of 30,000 small businesses linked by a common platform is, to our minds, faintly ridiculous’.

But from a legal and business practice standpoint, this could end the gig economy. Or at least change it beyond recognition.

If businesses who run their operation like Pimlico or Uber don’t change, they could be faced with massive compensation bills for unpaid sick and holiday leave.

So there are probably two options when it comes to the employers and the gig economy:

  • Make all workers employed. This comes with pressures of redundancy pay, or having to pay staff when there isn’t enough work to go round.

Or

  • They’d have to increase the amount of ‘self-employed’ workers they use, therefore allowing workers to seek some of their commissions from competitors.

Either way, someone loses out. The employer has to spend more, or the self-employed worker loses some of their income and security.

What does this mean for the night time leisure industry?

It’s not all doom and gloom for the entire gig economy. Especially in an industry like this.

For most night time workers in the gig economy, their status as self-employed is in practice, being acted out as it should be.

By this, we mean that most people who are classed as self-employed, are self-employed. From bar staff to headline acts, anyone entering the business is aware that the work can be seasonal or irregular. They are also, because of shift work and the difference in working hours to the standard working day, in a position to work for other companies at the same time.

The major change will come in the use of zero hours contracts, which may well be banished in the near future (either by law or demand). If staff members are working 15 hours per week on average, convincing people that they’re entitled to nothing when they miss a week, isn’t going to stick.

The end of these contracts could see night clubs employ less staff but require them to work more hours.

And from an insurance point of view?

Again, in essence, this won’t affect the insurance you need too much, unless the self-employed staff you use are provided by a contractor. If that’s the case, the end of the gig economy could increase your employer’s liability bill (because a staff-supply contractor has to have their own EL insurance).

In the short term, NDML are the best people to have in your corner as the landscape changes. Our legal protection insurance product, which is backed by, and only available to, members of the NTIA, offers legal cover worth up to £100,000. This would cover you for claims just like Gary Smith’s against Pimlico.

For more information about this insurance, you can contact us today via the link in the menu at the top of this page.

Image credit: https://commons.wikimedia.org/wiki/User:Oxyman

By | 2018-06-21T14:56:15+00:00 June 21st, 2018|Articles|0 Comments

About the Author:

Sam is NDML's Social Media Manager. If you have any questions about NDML, our products, or press enquiries, you can find him on Twitter @RomeroSocialSH

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