*10 Employment Status And The Gig Economy — Where Are We Now?


Engaging services through what has become widely known as the "gig economy" has become increasingly popular in recent years. So, what is the gig economy? It can be described as a working environment that offers flexibility with regard to hours of work, or, in the alternative, a form of exploitation with little or no workplace protection. People who work in the gig economy have agile/flexible jobs instead of (or as well as) more traditional full-time jobs. Instead of a salary, workers get paid for the "gigs" they do, such as food delivery or a taxi journey. It is estimated that some five million people are employed in the gig economy in the UK. In Ireland, it is reported that some 5 per cent of the workforce have constantly varying hours of work (J. O'Connell, "We're Working but we're not Employed" (The Irish Times, 28 October 2017).

Arguably, the benefits to an individual choosing to work in this way include flexibility and control over how they work. Notwithstanding the perceived attraction of this new way of working, it undoubtedly raises questions about the suitability of the current employment law framework in addressing the needs of people actively choosing to work outside of the traditional employment model. "Gig economy" working has sparked much debate, particularly in the UK. This is at a time where the issue of low-paid work and zero-hours contracts are also being debated with reports of workers being exploited and denied rights and entitlements that many would argue they are entitled to enjoy.

In December 2017, the Minister for Employment Affairs and Social Protection published the Employment (Miscellaneous Provisions) Bill 2017. The long title of the Bill describes it as:

"An Act to provide for a requirement that employers provide employees with certain terms of employment within a certain period after commencing employment; to impose sanctions for certain offences; to further provide for a minimum payment due to employees in certain circumstances; to prohibit contracts specifying zero as the contract hours in certain circumstances and to provide for the introduction of banded contract hours; to further provide for prohibition of penalisation".

This article considers employment status generally under Irish law and analyses some of the recent UK decisions on employment status and the gig economy. The interplay with the principles established in both jurisdictions is also discussed.

Employment Status Revisited

It is worthwhile to review briefly the core principles on employment status that have been developed over the years by the courts.

One of the seminal High Court cases in this area is Henry Denny & Sons (Ireland) Ltd v Minister for Social Welfare ([1998] I.R. 34). The plaintiff, Ms Mahon, was hired by Henry Denny as a supermarket demonstrator, offering shoppers free samples of products. Ms Mahon's contract referred to her as an independent contractor. This case is often cited as the case which establishes the legal test for differentiating between contracts of service and contracts for service. This "test" is set out by Keane J. in the following terms:

"[I]n general a person will be regarded as providing his or her services under a contract of service and not as an independent contractor where he or she is performing those services for another person and not for himself or herself. The degree of control exercised over how the work is to be performed, although a factor to be taken into account is not decisive. The inference that the person is engaged in business on his or her own account can be more readily drawn where he or she provides the necessary premises or equipment or some other form of investment, where he or she employs others to assist in the business and where the profit which he or she derives from the business is dependent on the efficiency with which it is conducted by him or her."

The High Court ultimately concluded that Ms *11 Mahon was an employee rather than an independent contractor and that the prudent approach was to look behind the contract in place to establish the real relationship that exists between the parties. The court, in this instance, clearly acknowledged that the relationship between the parties was not equal and as such, it was the reality of the situation—rather than the description placed on it in the written agreement between the parties—that required assessment. The level of control that is ultimately exercised by one party over another is often a strong indicator, albeit not in itself decisive, of just how equal or unequal the relationship is.

The Supreme Court in the UK has also addressed this issue in the case of Autoclenz Limited v Belcher ([2011] UKSC 41). The claimants in this case valeted cars on behalf of Autoclenz. The claimants' contracts stated that they were sub-contractors and not employees; that they were not obliged to provide services to the company; and that the company was not obliged to offer work to them. The Supreme Court upheld the decision of the Court of Appeal and cited with approval the court's analysis of the true nature of the relationship:

"[T]he circumstances in which contracts relating to work or services are concluded are often very different from those in which commercial contracts between parties of equal bargaining power are agreed. I accept that, frequently, organisations which are offering work or requiring services to be provided by individuals are in a position to dictate the written terms which the other party has to accept. In practice, in this area of the law, it may be more common for a court or tribunal to have to investigate allegations that the written contract does not represent the actual terms agreed and the court or tribunal must be realistic and worldly wise when it does so.

So the relative bargaining power of the parties must be taken into account in deciding whether the terms of any written agreement in truth represent what was agreed and the true agreement will often have to be gleaned from all the circumstances of the case, of which the written agreement is only a part. This may be described as a purposive approach to the problem. If so, I am content with that description."

Following Autoclenz, Elias L.J. in the Court of Appeal in the UK fleshed out the potential significance of the interplay between the description placed upon the relationship, the reality of the relationship and the intention of the parties in Quashie v Stringfellows Restaurant Limited ([2012] EWCA Civ 1735) as follows:

"It is trite law that the parties cannot by agreement fix the status of their relationship: that is an objective matter to be determined by an assessment of all the relevant facts. But it is legitimate for a court to have regard to the way in which the parties have chosen to categorise the relationship, and in a case where the position is uncertain, it can be decisive, as Lord Denning recognised in Massey v Crown Life Insurance. To similar effect are the following observations of Lord Justice Ralph Gibson in Calder v H Kitson Vickers Ltd:

"the fact that the parties honestly intend that between themselves the contract should be a contract for services and not a contract of service is not conclusive, but it is a relevant fact, and ... it may afford strong evidence that that is their real relationship.

It follows, in my judgment, that the fact that the parties here intended that the dancer should have self-employed status reinforces the conclusion of the employment judge in this case."

In Minister for Agriculture and Food v Barry ([2008] IEHC 216), Edwards J. discussed the importance of mutuality of obligation in determining...

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