The Gig Economy: Are Employers Fulfilling Their Social Responsibility?
Last month, UK drivers operating for ride-hailing app Uber won a landmark employment tribunal that determined drivers were not self-employed and must therefore receive national minimum wage, holiday and sick pay from the company. While this outcome dominated headlines over the past month, the ruling has highlighted interesting questions around the gig economy and client companies’ social responsibility towards their workforce. One of the ways in which Capital GES stays ahead in this evolving market is by seeking to understand the social and historical roots of current employment issues and by comparing these with current political trends in the regions we serve. This often allows us to understand the cultural and political appetite in these areas and adapt our solutions accordingly.
Employment as we know it can simply be defined as quid pro quo between an organisation and an individual; in exchange for that individual’s consent to depend upon the organisation as their principal source of work and income, the organisation offers certain securities, such as a notice period and guaranteed levels of work and income. However, as we move further into an age of distributed work, this fairly straightforward social contract which has evolved into our employment landscape is becoming increasingly complex.
An employer’s social responsibilities to its employees underpins existing legal frameworks. In the case of Uber, drivers can easily become solely dependent on Uber for the provision of work yet receive no benefits beyond payment for hours worked. Uber as a company benefits from this as it needn’t pay drivers while they wait for a job, and the company can therefore easily afford to take on many more drivers than the workload requires and provide unrivalled availability at the drivers’ expense. While the legality of Uber’s actions has been the focal point of this case, it is important for us as a society to come to terms with what we feel is right, and whether such companies have a social responsibility to the people that work for them or not.
While a useful and topical example, Uber is far from alone. Just last week, courier service CitySprint encountered a similar tribunal brought forwards by a cycle courier arguing against her status as an independent contractor and the company’s standard contract which is “littered with terms that are inconsistent with the reality of the role”. As the gig economy continues to grow exponentially and transform the traditional employment landscape, the risk of similar cases being brought forwards is significantly greater. This new world of work is showing no signs of slowing, and as this evolution continues the gig-work model will only become more commonplace within organisations across all industries.
We have now reached a point at which businesses must sit up and take note of how they are going to fulfil their responsibility and moral obligations to those they engage. The legal action taken by gig workers has sparked wider debate across the staffing sector, and this conversation is highlighting further areas of concern.
Many critics argue that the current state of employment law, both in the UK and elsewhere, is not adaptable to the gig economy. Engagement models within the gig economy are flawed in many respects, however the benefits that it brings to workers, employers, businesses and the economy as a whole are unparalleled. It is up to us as an industry to help lawmakers understand this new segment and define it clearly enough to allow regulation and legislation to reflect the values and obligations that we agree on as a society.
It may be some time before we see any real change within the law that will accommodate this new world of work, but in the meantime employers must consider whether they are fulfilling their part of this social contract both for the sake of long-term compliance and that of their own internal social values.