The Just Eat case that could change the gig economy | Commercial Awareness Compass #82

Hello everyone and welcome to all about laws commercial awareness compass your weekly guide to thinking like a commercial lawyer. So in each episode we take one major commercial issue and then we break it down across three levels, begin it into media and advance so that we can help you build your understanding step by step. So this isn't just about understanding legal principles, it's about developing the commercial mindset that law firms are looking for and understanding how businesses create value, manage risk and use lawyers as strategic advisors. I'm for you could childry a future trainee solicitor and today I'm doing by Brendan Collar. Brendan, it's great to have you with us today. Before we dive into today's discussion could you please tell us a little bit about yourself? Of course, thank you very much I'm going to be back on it's great to be back on the the pod and the episodes and the compass episodes so thanks for having me back. Yes as you mentioned so my name is Brendan Collar for those of you who've tuned in before you've probably heard my voice. I am a senior legal counselor at TikTok based in Dubai. I work in their commercial team looking at the content moderation amongst another various things that come across my desk. In terms of background I studied originally in Port Smith my A levels where I went on to study law LLB at kind of university and I took my training contract to shoot Smiths and with all later qualifying into RPC and we're left last year to join TikTok on a permanent basis overseas. Great thank you very much. So today's discussion stems from the recently action involving more than 7000 just e careers which once again brought employment status into the spotlight raising important questions about workers rights, business models and the future of flexible working so while the case does focus on the delivery platform it reflects much broader issues affecting businesses across the UK economy. So as we go through today's discussion I'd encourage everyone listening to notice how each level builds upon the previous one so at the beginning level we'll understand the legal foundation at the intermediate level we'll explore why these issues matter commercially and then finally at the advanced level we'll consider where employment law and platform businesses are heading in the next few years. So let's begin with the basics at the beginner stage. So what do you what do we actually mean by gig economy and why has it become such an important part of the UK economy? Great great first question and it's something that we've seen probably off the back of COVID so the gig economy in a vertical mass is a term that's been frequently used by the flexibility basically afforded to employers and employees on both cents in terms of the ways in which you're working. Typically it's a flexible task by task basis so you might think of aspects regarding sort of delivery, convenience delivery so whether that be takeaway for example food, groceries and so forth but then also in addition to that sort of your zero hour contract basis where you work as much as you wish but then vice versa as well from the employee of the respective so it's not locked down and sort of a typical employment contract whereby Brendan will work 40 hours per week and be afforded a break on Monday Tuesday Wednesday Thursday and typical working week and so forth so it's much different in terms of the nuances on both sides for both respective parties as opposed to sort of a typical employment contract. From a legal perspective why it's important for the UK economy and why it's important for generally the individual's concern is that these arrangements are bound between the two so as a mixture as I said of the hybrid role you're an employee but you're all not so you're certain some rights but then also the flexibility almost perceives a bit of a trade up between the two in terms of the UK economy itself I'm not an economist but having spoken to various clients and businesses in this space which actually rely on the gig economy approach it gives them a flexibility so they might not necessarily need Brendan for 40 hours a week they might need him for 20 hours a week one week but then the following week might need to be just 10 or not at all so the pure flexibility on the employer perspective but also we've seen in vast areas the employees are actually quite happy with this flexibility and ways of working something we've seen significantly increase off the back of co-op for example. Great thank you that's a very helpful holistic overview so before we look at the legal issues it's helpful to understand how the gig economy has changed the way businesses and individuals work which we slightly touched on so building on that we often hear terms such as employee worker or self-employed contractor what are the key differences between those employment statuses. Very good question very specific to legal I had to do a bit of research myself before coming into this so not being obviously an employee employment legal rights advisor so from an employee perspective this is the most protected in the birth of commas in regards to sort of status and coming this from a UK angle so this might vary depending upon regional country such as sort of a caveat there but from an employee perspective they're entitled to the full suite of employment protections and under the UK this is sort of governed by the Employee Rights Act 1996 what that means is there is protection in regards to sort of redundancy rights unfair dismissal any action that's taken against those individuals and there's a real draft right course for them to follow in many instances while there'll be union protecting them whether by they can partake in the union protection and so forth and then worker is sort of a hybrid between the two so they're entitled to sort of the core protections in the UK so normally that will be national minimum wage which is obviously been quite a big and important subject in topic in the UK in recent years and months they'll have annual leave and in addition to that they'll be slight nuances regarding protection in terms of unfair dismissal and so forth I won't get into them now but yeah there's slight nuances between the two and then the third element is sort of the self-employed the contractor so they're generally protected by the contract that's in place rather than employment legislation so if there was any dispute between themselves and their employer they would look to the contract that they have written between both parties rather than the Employee Rights Act 1996 great so those legal distinctions are sitting at the heart of many of the disputes that we're seeing today so turning to the just e case itself the case centers on whether careers should be classified as workers why is that distinction so significant for both businesses and individuals great question so yeah so ultimately and you mentioned in a alluded there if I care but essentially the the wording that's used in the contracts and the agreements between the respective parties and their businesses is so important because ultimately it determines the relationship between those two parties obviously it will turn on fact but depending upon what classification the individual in question falls within determines a legal right so it very much is ABC in terms of following that route as to A here where we are let's have look at the agreement let's have a relationship between the parties B okay what does that mean what are the protection under legal perspective and then C the potential outcomes rights and remedies both from the employer but also from the employee perspective so if individuals have found to be workers rather than self employed business and they face claims to unpaid holiday minimum wage concerns also as well one big thing which many people forget is obviously the pension contributions so if you're classified as a employee you'll be entitled to pension contributions obviously many instances in the UK whereby there'll be a match so if you contribute X amount there'll be a Y contribution from your employer and so forth statutory entitlements and then also the the the positioning under law when it comes to obviously unfair dismissal and so forth great so it seems like the technical legal question but it has major commercial consequences for everyone involved so looking at the practical implications further what legal rights become available if someone is classified as worker rather than self employed great question yes so this is very much point to the heart of the law so making a list here basically a worker would potentially be entitled to National minimum wage which we mentioned the paid leave which is governed under the working time regulation to get very specific work into the nuances there but that's pretty much looks after that area rest break so even now in my employment contract but even when I started out back in the UK as a student I will be entitled to a certain amount of time for lunch periods rest breaks as well depending upon the shift that I was working and then also in addition to that this certainly wants us regarding whistleblower protection and then also discrimination which is again governed under the equality act in the UK 2010 these would obviously depend upon the region in question which I think I've mentioned beforehand but that just gives you a bit of an overview as to what what rights a worker will be interpreted to right so understanding those rights helps explain why employment status is heavily contested now diving into the intermediate section and looking at the commercial implications many platform businesses have built their business models around flexible self employed workforces how could eases like this affect the models ready yeah great question again ultimately I think what's 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Brendan, an individual, might not necessarily know what to negotiate regarding an employment contract, what their rights even are. So the favour will typically swing in the individual's perspective as opposed to the multinational. But yeah, ultimately the status of your employer or the third party you're engaging with will be determined upon how you deal with the monodata day-to-day basis, the reality of day-to-day working rather than what's drafted. It will be a key consideration. Great, it's a fitting way to reflect on the legal commercial and strategic themes we've explored throughout today's discussion. So Brendan, thank you so much. That was a really insightful discussion and a great example of how employment law sits at the intersection of business strategy regulation and commercial decision making. So you've shown us that gig economy isn't simply about flexible working, it's about how businesses can adapt their models whilst balancing the legal obligations, commercial objectives and the expectations from workers. So for everyone watching, whatever you feel like you've joined us today, I hope you're leaving with a stronger understanding of how to analyse commercial issues from a lawyer's perspective. As we've explored through this episode, it's important to ask how does the businesses create value, what legal risks could threaten that model and how might regulation then change that commercial landscape. So developing that commercial mindset is exactly what law firms are looking for. The gig economy continues to evolve and with it, so does to the role of commercial lawyers. So those who understand both the legal framework and the commercial realities facing businesses will be well placed to advise clients as the future of work continues to develop. So thank you for joining us again for this week's commercial awareness compass. If you found today's discussion useful, be sure to share it with someone else in their legal journey and until next time, prepare without the paddock.