The wide-ranging Employment (Miscellaneous Provisions) Bill 2017 (the Bill) moved to Committee Stage in the Dáil in recent weeks. The draft legislation is, among other things, an attempt to regulate the fast-developing gig economy.
The gig economy employment status problem
Most common law jurisdictions divide workers into those who are employed and those who are self-employed. The difficulty for the government is that individuals working in the gig economy tend not to fit into either category. Although gig economy workers typically enjoy greater levels of autonomy and flexibility, they also tend to rely on one organisation for the bulk of their income. Unlike workers employed exclusively by one organisation, gig economy workers are not afforded with any of the legal protections enjoyed by employees. The gig economy represents uncharted territory for the government and it remains to be seen if the Bill will successfully regulate rapidly evolving employment practices. (For a further discussion of employment status, see our blog post from earlier this year by clicking here).
Further criminal liability for employers
One tactic the government is proposing under the Bill is the introduction of a fine of up to €5,000 and/or imprisonment for employers who incorrectly designate an employee as a self-employed contractor. Introducing even more criminal liability for employment law breaches is the most worrying aspect of the Bill. Peninsula is actively lobbying to have this removed from the Bill as it passes through the houses of the Oireachtas.
Will employment status regulations stifle employment?
As discussed above, the nature of gig economy employment practices, tends to preclude the creation of a traditional employment relationship whereby an individual works under the direction and “control” of an employer. Gig economy workers typically decide their own hours which dilutes the “control” requirement and frustrates the formation of an employer/employee relationship. An artificial situation ensues whereby gig economy workers are considered to be self-employed entrepreneurs when in fact the reality of the situation is that they are individuals working for someone else. The upside of gig economy employment is that it allows certain workers with no employment history to become economically active. The government faces the difficult task of protecting the rights of individuals without restricting an increasingly fluid labour market.
Should a hybrid employment status be introduced?
The UK introduced a hybrid employment status to regulate a contract under which the worker is economically dependent on one client. Slovenia also classifies certain workers as ‘economically dependent persons’ if they rely on one particular client for at least 80% of their income. While such a person does not enjoy full employment rights, they are entitled to a more limited set of employment protections. Introducing an intermediate or hybrid employment status does not appear to have been considered by the government.
Hybrid employment status case law
Despite having a hybrid ‘worker’ status in the UK, there has been a significant number of employment law cases in recent years in which the employer has denied that it is an employer of any kind. High-profile cases involving Uber and Deliveroo came before the UK courts during 2017 and 2018. The Uber and Deliveroo decisions examined the employment status of workers who are connected with end users via an online platform. Despite both Deliveroo and Uber being comparable technologies, the two cases produced conflicting decisions. Deliveroo riders were deemed by the Central Arbitration Committee to be self-employed as they could appoint substitutes to do their work. Uber drivers on the other hand were found to be hybrid workers by the Employment Appeal Tribunal. The ruling found that Uber exerted “control” over the activities of the drivers.
Enforcing the new law
Case law from the UK indicates that there will be problems enforcing a law that requires employers to confirm the employment status of workers. With significant grey areas in determining the employment status of gig economy workers, it is almost inevitable that any alleged breaches of this new provision will be contested by employers who will argue that they are not employers at all.
Will the Bill hit the mark?
As the gig economy shows no signs of contracting, the government is facing mounting pressure to come up with measures to protect the rights of individuals working under flexible work arrangements. Other measures in the Bill such as prohibiting the use of ‘zero hours’ contracts and introducing banded hours’ contracts will go some way to protecting part-time and variable hours employees but it is questionable whether the introduction of criminal liability for employers would have any impact on bolstering gig economy workers’ rights.
We will provide further updates as the Bill moves coser to being signed into law.
Need help determining the employment status of your workers? Speak to an expert today by calling us on 0818 923 923.
