Unlock Editor’s Digest for free
FT editor Roula Khalaf selects her favourite stories in this weekly newsletter.
The author is deputy general secretary of the Fabian Society.
For drivers and couriers in the UK’s gig economy, employment status is very important. Most are classed as self-employed and do not receive statutory sick pay, for example. It’s worth remembering this as they move from car to car trying to earn enough money to live on and not end up injured or worse.
Efforts to improve the rights of this group have resulted in some of them changing their employment status, but they often become self-employed or wage earners, and belong to a little-known intermediate category of work, known by the opaque term “extremity (b)”.
In 2021, the UK Supreme Court placed Uber drivers in this intermediate category, which until last year also included Just Eat delivery drivers. Workers in this category are entitled to annual leave and a minimum wage, but they do not yet have full employment rights. They are not protected against dismissal, for example. The downside is that they usually have more autonomy.
However, recently, this category of point (b) has become very controversial, mainly due to how some large companies in the informal economy operate in the grey areas of labour law.
Before the general election, Labour suggested that all such workers should become full-time employees, a policy known as sole worker status. While this idea was not included in the King’s Speech, the impending Employment Rights Bill will have an impact on any future reform of the status. For example, gig economy drivers who previously had no employment rights at all could be granted employment rights from day one.
This won’t improve the situation for everyone in the gig economy, but it could help clarify and enforce the law. Many legal experts and unions have been getting nervous about inconsistencies and confusion in employment rulings, which have classified Uber drivers as self-employed but Deliveroo delivery drivers as freelancers.
But do workers want their intermediate employment status removed? The answer is not clear. Our research project found that their views reflected the complexities of life at the toughest end of the labour market, where the realistic alternative to many wage jobs is harsh. Any move to move them to employee status – designed to improve their rights – must ensure that the change does not actually make their working lives more unpleasant.
Fundamentally, the intermediate worker status was initially created to extend labour law protection to vulnerable self-employed workers, but this group does not fit easily into the relationships between employers and employees, which is what the sole worker status could do in practice.
One option might be to retain the intermediate worker status but reform it to include more people, at least in the short term. This could offer a quick and practical way of wrapping a new group of the most vulnerable workers in the informal economy in a protective layer of labour law, much sooner than the widespread shift to single worker status suggested by the government could achieve.
In particular, it could emphasize the degree of control that companies exercise over workers as the primary test of their status, and could pay less attention to whether employers can send a substitute or not, which is how some companies have tried to keep their workforces classified as self-employed.
It is clear that this issue needs to be debated and it is important to start now. Listening to the voices of those affected by these policies is a vital first step.
Fortunately, most of us don’t have to constantly monitor our labor rights. With the right reforms, the most vulnerable workers in our society can enjoy that security, too.