Informal And Atypical Work Patterns ' The Five Megatrends

• Published date: 05 April 2021
• Subject Matter: Employment and HR, Coronavirus (COVID-19), Contract of Employment, Employee Rights/ Labour Relations, Government Measures, Employment and Workforce Wellbeing
• Law Firm: lus Laboris
• Author: Mr Chris Engels (Claeys & Engels), Colin Leckey (Lewis Silkin LLP), Burkard G'epfert (Kliemt), Greg McGinnis (Mathews Dinsdale) and José Carlos Wahle (Veirano Advogados)

COVID is impacting the world greatly at the present time, but it is not the only factor changing the world of work.

We look below at the impact of certain large-scale influences on the way we work. It's important to say that these are not the only drivers of change, as there are also some influences that are country specific. However, these, it seems to us, are in most places the major ones:

1. Desire for flexibility
2. Technological innovation & the Gig economy
3. COVID-19
4. 2008 financial crisis
5. Globalisation

1. Desire for flexibility

Although most changes to the workplace are being thrust upon the world, a significant element of the drive is coming from workers and businesses themselves, as many see new forms of work as desirable. These include anyone who would like more flexibility, a better work/life balance and greater self-determination. The trick will be for businesses, governments, workers - indeed all stakeholders - to create a system going forward that nurtures these aspirations, whilst at the same time protecting people from the possible downsides.

2. Technological innovation & the Gig economy

The trend towards more flexible work didn't start with COVID, and has been building for a number of years, often in the form of piecemeal work via IT platforms. In this scenario, workers log on to a platform, such as Uber, and the platform marries them up with someone who wants a service (in this case, a taxi ride). That job is a 'gig' and the working arrangements are informal or 'atypical'. Workers log on when they like and this provides a level of flexibility that many have welcomed and also, easy access to work.

But in various places across the world, this new form of work has been testing the boundaries of employment law to the limit over the last few years. The essential question that is reverberating around courts worldwide is: should 'gig', workers who interact primarily with an IT platform rather than a human manager, be classified as employees in the traditional sense, or independent contractors - essentially, self-employed people who access the platform at will and have the ability to turn it off whenever they like? Most employment law around the world defines an 'employee' as someone who is subject to the managerial authority of their employer (amongst other tests). The latitude they have to choose how they are going to perform their work - when, where, and how - is limited. Contrast that with a self-employed person, who has complete freedom to decide how to perform the work. The only factor of importance to the buyer of the service is whether it is completed well and on time, in other words: output.

If someone is classified as an employee, that normally comes with certain rights and privileges (such as paid holiday, sick leave and pay, working hours rules, etc.) to balance against the responsibility they have to perform the work. If a worker is classed as independent, they are responsible for themselves and are subject to a different tax and social security system, in most places. For that, they gain the freedom to work in the way they choose. The shift towards an 'on-demand' economy has often been facilitated by the advantageous tax treatment of on-call labour and self-employment.

A third way

In some countries, people have been mooting (or actually operating) a third way, in which a worker is provided with certain rights (though not full employment rights) in recognition of their de facto dependence on the platforms they work on. Governments tend to be in two minds about these things: on the one hand, they normally want to encourage innovative businesses to operate as they wish, but on the other, they receive less tax and social security contributions from self-employed workers, as in most economies, employees are taxed more heavily than independents.

As far as the countries covered in this report are concerned, the UK benefits from a hybrid status, known as 'workers', which enables them to benefit from certain baseline employment rights. In Canada also, there is a broad spectrum of work for which 'dependent contractors' are recognized as having an intermediate status between 'employee' and 'independent contractor'. Gig economy workers tend to have been framed as independent in the past, but recently, the courts have been suggesting that gig economy workers do not fit neatly in one classification and could be treated as an employee, dependent contractor, or an independent contractor depending on various factors, including how much control they have over their work.

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