What Does Gig Economy Mean?

04 October 2018

The term "gig economy" refers to areas of the world of work where individuals are engaged on a freelance basis, as independent contractors or under a short term contract, instead of being permanently employed. It is estimated that 5 million people in the UK are currently working in gig economy roles. Many of these individuals are engaged as couriers or taxi drivers, with others engaged as plumbers or even video producers.

If you're working within the gig economy and you're unsure of your workplace rights or your legal status, you can speak to an Employment Solicitor for advice.

What are the Pros and Cons of the Gig Economy?

Some feel that this style of work offers individuals more flexibility than a permanent role. They can choose their own working hours and can select which jobs to accept and which to decline. For some this means that they can effectively balance their work life around other commitments, such as childcare or studies. Gig economy workers are paid for the jobs (or 'gigs') that they do, essentially earning their wages as though they were an independent contractor.

On the flip side of this, some argue that the gig economy offers very little employment protection to individuals. Particularly if they are engaged under a 'zero hours contract' where there are no guaranteed hours, meaning individuals could find themselves struggling financially with fluctuating work volumes. In addition, they may be denied the basic employment rights that are afforded to permanent workers or agency staff. This means, for example, that they may not be protected against unfair dismissal, they may have no right to the National Minimum Wage and they may not be entitled to redundancy, holiday or sick pay.

Benefits of the Gig Economy to Employers

Gig economy working is appealing to many businesses for a number of reasons.

One of the main benefits to businesses is that they don't need to cover wages during quiet periods when there isn't much work. This means that they are only incurring staffing costs when there's consumer demand and so can save a significant amount of money.

Legal Disputes around the Gig Economy

The gig economy is a relatively new concept, and has had a significant impact on the employment landscape. Some argue that this change has been a negative one, citing the lack of regulation, income insecurity and denial of employment rights as placing those individuals who work in the gig economy at risk of exploitation.

Individuals working in the gig economy have brought a number of high profile cases in recent years against the businesses they work for. Many of these disputes have been over basic rights such as pay or holiday entitlement, with some individuals arguing that they should be entitled to the same rights as permanent employees. Some have won their cases to be recognised as "workers" by law instead of independent contractors, thus entitling them to certain basic rights.

A number of high profile cases are still ongoing. The outcomes of these cases are eagerly awaited and will continue to shape the gig economy and clarify the rights of those who work in the gig economy.

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