As the years fly by, the way that employers recruit and manage their workforce evolves. The gig economy is now well-established and this way of working is gathering pace in some sectors, like retail. Essentially, rather than recruit one permanent employee (such as would be the traditional way of hiring), the employer uses short-term contracts with a number of individuals. The flexibility that this arrangement offers both the individual and the employer has many benefits. However, there are also some things to be aware of from an employment law perspective, including:
- What is the individual’s true employment status?
Are they an employee, a worker or self-employed? Most probably it is the middle-category but not always. It will depend on the specific facts so each case will need to be judged on its particular circumstances. However, it is important to categorise the individual correctly as their employment status dictates what rights they have (and how much tax they must pay). For example, a worker would be entitled to take paid annual leave but a self-employed individual would not, and an employee would be entitled to statutory maternity leave and pay benefits but a worker would not.
- Will the individual need a written contract?
Currently an employer is only legally obliged to issue written documentation to employees but this is changing soon. From 6 April 2020, workers will become entitled to receive a basic written statement setting out their main terms and conditions of engagement. In any event, whatever the individual’s employment status, it is sensible for the employer to have a well-written contract in place so that all are clear about the terms governing the relationship. This can help avoid disputes arising at a later date and so should help protect the employer.
- Will it stay a flexible arrangement forever?
We expect that a new legal right will be introduced for all employees and workers which will give them the right to request a predictable and stable contract once they have at least 26 weeks of service. The individual could, for example, request a minimum number of working hours each week or certainty as to the days they will be asked to work. Once introduced, this new right may potentially mean that the flexibility of the current model will be eroded.
Christmas is over and, as businesses pore over data to gauge what worked, 2020: The Year of the Gig Economy suggests now is the time for retailers to review their workforce strategies to combat margin pressures and battle against the shrinking pool of directly employed workers. The report from Retail Week, produced in association with Catapult, highlights government findings from August 2019 that retail and wholesale have the highest number of vacancies of all industries across the UK economy (133,000 vacant positions). To improve staff retention and address hiring woes, the report explores the gig economy as a possible solution for retailers. Several retailers are already capitalising on the gig economy, now accounting for 4.7 million workers in the UK, to match labour demand and improve their bottom lines.