The Gig That Keeps On Giving – Where To Next For The Gig Economy?

The spotlight on the gig economy continues to shine. In the latest of a series of high profile employment status cases, the UK Supreme Court ruled that one of 125 plumbers engaged by Pimlico Plumbers was a 'worker' for the purposes of the relevant UK employment legislation and not an independent contractor as had been claimed by the company. This and similar cases have the potential to have a significant financial impact on companies and the wider economy.

The emergence of the gig economy has sparked much debate, with the apparent flexibility of short-term 'gig' work being weighed against the perceived unfairness of these workers being treated as self-employed. The statutory definition of 'worker' in the UK expressly envisages that a person other than one holding a contract of employment can be a worker for the purposes of many abridged employment rights. The critical aspect of the provision is that it expressly requires personal service. In the UK, a 'worker' is entitled to some but not all of the statutory rights enjoyed by an employee. The statutory benefits enjoyed by a 'worker' include minimum wage, rest periods and holiday pay. However, this hybrid employment status, between an employee and an independent contractor, does not have a statutory basis in Irish law and self-employed persons have no protection under employment legislation, including the right to a minimum wage, annual leave, protection against unfair dismissal etc. Notwithstanding this difference, the principles set down in this case are still relevant for Irish employers.

In essence, the UK Supreme Court in the Pimlico Plumbers case looked at the reality of the relationship in place and whether the contractual arrangements accurately reflected this position. In reaching its decision, the Court concluded that Mr Smith was a worker and not self-employed on the basis of: (i) the level of control exercised by Pimlico over him, including in relation to company branding, vehicle tracking requirements and minimum number of working hours; (ii) the fact that personal performance was a dominant feature of his contract; (iii) the mutuality of obligation; and (iv) the ability (or inability as the case may be) of Mr Smith to carry out an independent enterprise. These considerations are in line with the traditional legal tests employed by the Irish Courts in assessing the employment status of an individual. While many of the high profile gig economy cases have come before the UK...