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Gig Economy and Pensions

We reported last year on the long-awaited Supreme Court judgement in Uber v Aslam (back in February 2021) when Uber’s tens of thousands of drivers were defined as “workers”, not independent contractors. As a result, the drivers were found to be entitled to employment rights, including but not limited to minimum pay as well as to a pension.

The decision related only to Uber drivers but it was clear that the implications of this decision could (and should) relate to a further wide number of low payed gig economy workers, such as those that work for couriers and delivery services.

As reported by the Financial Times, following the Supreme Court decision, Charles Counsell, chief executive of The Pensions Regulator, implored those that employ workers as part of the gig economy to “voluntarily and promptly'' enrol those eligible into pensions.

At a hearing with MPs at the House of Commons work and pensions select committee on 8 June, Counsell was invited to make remarks on how the gig economy businesses had responded to his call [“rather than wait until they were compelled by a further court ruling or change in regulations”]. The FT reports that when asked as to whether they engaged with the regulator, he responded that many employers had chosen not to engage.

Counsell is quoted by the FT as saying “The definition of a worker is in the legislation and so what we do find is there are gig economy workers who have contractual mechanisms in place which mean they don’t come under that definition [of worker] and for me that’s where we need to encourage those [businesses] to do the right thing for their workers in any case.” 

He went on to note that he felt that the definition of a ‘worker’ as set out in the legislation may need to be adjusted, especially in relation to ensuring that people are set up with pensions for the future.

It is vital that employers continually reassess employment relationships, as well as ensure that pensions are part of the consideration as to what is reasonable.

As Carrie Beaumont, Partner at Ortolan Legal noted at the time, “this case reminds us that it is increasingly important for commercial due diligence and legal advice to be sought to be taken to establish control tests and not simply seeking to rely on contracts which do not reflect the commercial reality of the relationship.  The Courts have clearly shown they will look behind the words.”

Posted on 9 June, 2022 by Ortolan

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