This has been a busy week for the UK’s so-called “gig economy”. Uber drivers won their workers’ rights case for the third time in a row (this time in the court of appeal), and the government issued a response to two employment law reviews in what it hailed as the “largest upgrade in a generation to workplace rights”. Despite all the noise however, not much has changed.
The Uber judgment has done little more than tell us what we already know. Uber drivers are “limb (b) workers”, and therefore entitled to basic employment rights like the minimum wage and paid holidays, despite Uber’s protestations to the contrary. The majority opinion was highly critical of Uber’s chicanery, referring to “a high degree of fiction in the wording” of its documents and the “air of contrivance and artificiality which pervades Uber’s case”.
The opinion dismissed as a “sham” the “convoluted, complex and artificial contractual arrangements, no doubt formulated by a battery of lawyers, unilaterally drawn up and dictated by Uber to tens of thousands of drivers and passengers, not one of whom is in a position to correct or otherwise resist the contractual language”. The three decisions on Uber are in line with virtually every other high profile “gig economy” test case in recent years, which has demonstrated that companies are simply getting away with unlawfully depriving their workers of the rights to which they’re entitled. This occurs because there is virtually no state enforcement of employment law.
The Taylor Review of Modern Working Practices, commissioned by the prime minister to make recommendations on how to address the sorts of problems faced by these Uber drivers, was heavy on fluff and light on concrete solutions, as extensively set out in the Independent Workers’ Union of Great Britain’s (IWGB) response to it. While good at media engagement and profile-raising, Taylor never got to grips with the problems at hand, and fundamentally failed to recognise that law-breaking was the problem and enforcement the solution. It is therefore unsurprising that the government’s various responses to it, including this week’s, have little to offer the Uber drivers who have been victorious in the courts on three consecutive occasions.
The other review the government responded to was that of David Metcalf, the newly anointed Director of Labour Market Enforcement. Metcalf oversees strategy for three of the four main employment law enforcement bodies, dealing with minimum wage, employment agencies, gangmasters, and severe labour abuses like modern slavery. Coming from a background of academia rather than politics, Metcalf is more interested in the bottom line than the headline. This can be seen in his report, which serves as a damning indictment of the current state of employment law enforcement.
Most areas of employment law are not enforced at all, and the UK has only half as many inspectors as that recommended by the International Labour Organisation (ILO). Indeed, the likelihood of a company facing minimum wage inspection in 2016-17 was roughly one in 500 years. Combined with the fact that the civil penalties for minimum wage violations are paltry, and criminal prosecutions virtually unheard of, it is unsurprising that Metcalf stated that “the chances of being inspected and the size of any civil penalties are both far too low”.
He therefore recommended increased financial penalties, and even floated the idea of basing them on turnover, like GDPR (data privacy) fines, which could result in massive multimillion-pound penalties. With impeccable logic, he suggested that revenue from these big penalties should go back into enforcement, thereby increasing the reach of the state. He further recommended that the state should enforce the right to paid holidays, given that an estimated £1.8 billion of holiday pay goes unpaid each year.
Although agreeing with a number of his other recommendations, the government refused to raise the fines or penalties for minimum wage breaches or commit new resources to HMRC’s minimum wage enforcement. With no new resource, no increased likelihood of inspection, and no increased fines or penalties, there is simply no increased incentive for companies to obey the law.
The Government did say it would take forward the enforcement of the right to paid holidays for “vulnerable workers” but without defining who is a vulnerable worker, saying which enforcement body would do it, and importantly, without allocating any additional resource for it other than five more employees for dealing with employment agencies. If they go about enforcing holidays like they do minimum wage, the results will be similarly pathetic.
The IWGB has waged and won multiple court battles over employment status in the “gig economy”. And yet only one of the defeated companies is implementing worker rights across the board as a result. Firms are hiding in plain sight, with an incredible amount of press attention on their unlawful behaviour leading to no serious action from the state. Until the government decides to adequately resource enforcement of employment law, with fines and sanctions that are stiff enough to create a real deterrence effect, these companies will continue to act as though obeying the law is optional. This week’s announcement does little to change that.