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Treat people fairly to stay ahead of gig economy

The following article by UEL Chairman Malcolm Mackay appeared in today’s Scotsman Newspaper:
It’s very illuminating speaking to a mini-cab driver. Of course there’s been plenty of controversy over the future of the Uber hire car service in the big cities such as London.  And there are definite worries about passenger security, the road worthiness of vehicles and implications for taxation, but when you actually speak to a mini-cab driver you find out a lot more about the so-called ‘gig economy’.

On several recent trips, I was picked up by an Iraqi who has settled in the UK, a South Korean teacher who has come to the UK to improve his English, and an Nigerian who was fed up with earning less than a crust back in Africa. Recently, we were driven by a young graduate from Inverness who is studying for a PhD at a university in Glasgow. He told us that he enjoyed driving and meeting people – although he admitted there were some idiots who got in his car and caused trouble –  and the money was vital so he could get on with the life he wanted. He’d been working in bars and pubs, but knew with a doctorate, he could get a much better job in industry. He had the flexibility and the opportunity to drive when he felt like it and spend the rest of his time writing up his theses.

As part of my straw poll, I asked the waiter in our local Indian restaurant, whom I knew to be studying, how did he managed to fit in his casual work with this career path. He shrugged: “Isn’t everyone doing that these days?’’ There has been a generational shift since my days when many Scottish students were given full SED grants and living assistance to fulfil their education. We came out of university, debt-free. Now the Millennials – and this cohort is now reaching the age of 36 – have an environment where a first-degree is only the starting base. With Scotland producing many more graduates, the next step up to get a chance of a good career is a Masters or a PhD.

It means many more people are stepping in and out of work for a host of different reasons. So how have the legislators responded to this fundamental change in the world of work? Rather slowly, it seems. But at least we appear to be back on a track that recognises these rapidly changing patterns of work. Employment law is catching up with this new and increasingly complex phase as many more issues related to employment arise from the gig economy.

Since tribunal fees were abolished in July this year there has been increasing evidence of a substantial increase in the number of tribunal claims, in some regions amounting to an increase of more than 100%.

We are likely to see an explosion in disgruntled Millennials making claims, unless employers step up to the mark. There are significant long-term consequences for tardy employers if they don’t play by the rules. In particular, those small businesses where temporary and part-time people are working – even if only for a few hours per week – face the same employment legislation as bigger corporate employers. For the smaller employer, with more casual staff, the impact of falling foul of the rules can be disproportionate. Sacking a waiter who accidently spills a drink over a customer might end up costing you a packet, unless proper procedures have been put in place.

Predicting risk is increasingly difficult and employers need access to swift advice more than ever before. However, when it comes to employing anyone in the gig economy, prevention is always better than a week spent in an employment tribunal.

There’s another interest element in all of this. It has been difficult for lawyers across the UK to keep up with all the developments in the gig economy, particularly if the law firm has a small employment law department.

Many employment law departments have shrunk in recent years as firms have been taken over with some famous Scottish legal names disappearing completely. It means finding a suitable practitioner can be time-consuming and costly.

However you look at your business, training and insisting on basic common sense and high levels of personal respect should be an integral part of a comprehensive approach to running a good business. Some simple steps can be taken to reduce risk including the insistence on good practice. At the heart of this is treating people fairly. The minicab driver, the waiter and the part-time carer, all deserve it.