New EU Rules for Gig Economy Workers

The European Parliament has approved new regulations which guarantee improved minimum rights for ‘gig economy’ workers. The new laws, which will not come into force for another three years, will apply to workers in casual or flexible jobs, who typically fall somewhere between employee and self-employed status, such as Uber drivers and cycle couriers.

The new measures attempt to prevent the exploitation of such workers, and include:

  • The right to compensation for late cancellation of work
  • Mandatory training must be provided free of charge and workers paid for their time
  • Only one probationary period will be allowed, up to a maximum of six months
  • A ban on exclusivity clauses, meaning workers can work for other employers
  • Employers must provide all workers with certain information on their first day, including:
    • their rights
    • information about pay and working hours
    • a description of their duties

Unless the UK is still a member of the EU in three years, the regulations will not apply here. However, UK law already offers some of the protections contained within the EU regulations, including the ban on exclusivity clauses in zero-hours contracts which has been in force here since May 2015.

Further, in December 2018 the UK government published its Good Work Plan, under the Taylor Review, which introduced a series of forthcoming reforms designed to improve the rights of workers. The UK laws will include:

  • An obligation on employers to provide workers with a statement of rights to workers on their first day, covering things like illness, maternity and holiday pay (in force from April 2020)
  • An increase in the maximum penalty for employers guilty of aggravated breach of worker’s rights from £5,000 to £20,000 (from April 2020)
  • Employers must now calculate holiday pay based on an average of the previous years’ worth of earnings, as opposed to the previous 12 weeks (from April 2020)
  • Extending the right to an itemised payslip to all workers (previously this right only applied to employees) (from April 2019)
  • A right to request a stable contract, providing for a fixed working pattern, after 26 weeks’ service (no implementation date has yet been set for this proposal)

Overall, the UK’s reforms arguably do more to protect workers than the EU proposals. However, one notable omission from the UK’s Good Work Plan is the right to compensation for late cancellation of work, which will be enjoyed by EU workers from around 2022.

The ability of employers to cancel work without paying their workers is part of the so-called ‘one-sided flexibility’ of zero-hours contracts, as identified in the Taylor Review. Whilst the UK’s proposals do not provide for compensation, the proposed right to request a stable contract appears to be an attempt to fix that problem, although no date has yet been set for such a measure to come into force.

Ultimately, any reforms to gig economy working practices must strike a balance between protecting workers’ rights and maintaining the level of flexibility which makes them attractive to both employers and workers.

If you require assistance in any of the above areas, please contact Jennifer Maxwell-Harris on 020 7307 2302.

This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.