The changing employment landscape

Disruptive technology and the gig economy

The idea of a job for life is little more than an anachronism and has been for some time. It is accepted that most people will work for multiple organisations during the course of their careers, a way of thinking confirmed by the rise of applications such as LinkedIn.

What is new though, is the changing concept of ‘a career’. We tend to assume that workers will map out their careers in terms of permanent positions, but, increasingly, more people are operating independently, by choice or necessity. They are contracting out their skills to the market for piecemeal payment, rather than in exchange for a salary from an employer.

The idea of the freelancer is established in the professional white-collar consciousness, but technology has begun to reshape the employment landscape for a much larger group of people than ever before. The boundaries between traditional employment and contracted labour have become blurred everywhere, from parcel delivery to web design.

A 2016 study by the McKinsey Global Institute found that up to 162 million people in Europe and the United States (20-30 per cent of the working-age population) engage in some form of independent work. The report splits those people into four groups; the free agents (30 per cent), the casual earners (40 per cent), the reluctant (14 per cent) and the financially strapped (16 per cent).

While it is clear that the rise of the flexible workforce offers significant advantages to an economy, including labour force participation, increased productivity and (in some cases) a more contented workforce; the McKinsey data does hint at hidden problems.

In many cases, workers would prefer permanent jobs, with all inherent benefits and job security, but the new employment landscape forces them to accept independent roles. The rise of the gig (or digital platform) economy is partly responsible for this, altering traditional services such as taxis (Uber) or fast food deliveries (Deliveroo) and drawing labour on a ‘per gig’ basis.

A number of high-profile litigation cases have found in favour of more rights for contractors using digital platforms. A recent Employment Appeal Tribunal in the United Kingdom upheld a ruling that drivers engaged with Uber in London were categorised as ‘workers’ not self-employed, giving them access to rights such as holiday pay.

The lack of responsibility taken for employees by companies such as Uber is also beginning to concern governments at a high level and has fed into a wider social debate about who will pay for the social benefits system when the traditional contributions made by companies on behalf of employees are no longer forthcoming.

In this discussion, IR Global draws on the expertise of six of its members, specialising in employment law. We will discuss some of the specific challenges and opportunities presented by the gig economy and look at how this is shaping employment law litigation. We assess what this means for the traditional employment contract and how legislation might need to adapt to keep pace. Finally, we ask what employee organisations and trade unions are doing to combat the erosion of workers’ rights.