Empowering the Freelance Economy

Gigatisation: How ‘big brother’ apps and worker exploitation are giving freelancing a bad name

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Thousands of drivers delivering for Amazon in the UK could be entitled to an average of £10,500 compensation for each year they have delivered for the company, according to law firm Leigh Day. But could this lead to greater government intervention and higher taxes, which may not be the direction other freelancers want things to go?

Such cases, while they bring seemingly unjust client-freelancer relationships to the forefront, may lob highly skilled contractors and limited company freelancers in the same legal status as a gig worker, something that they in fact do not want.

Adding insult to injury, IR35 legal cases are increasingly putting into question if freelancers have much freedom anymore, as we recently covered in our report, The PGMOL case: how it could give HMRC greater powers to take the “freedom” out of freelance – Freelance Informer

The context of gig worker cases and the larger freelancer market

Drivers making deliveries on behalf of Amazon via Amazon’s ‘Delivery Service Partners’ (DSPs) are classified as self-employed, so they don’t benefit from employees’ rights such as holiday pay, at least National Minimum Wage and an employment contract.

The law firm has launched an employee rights claim on behalf of drivers and believes that Amazon could owe drivers a total of £140m in compensation. That amount is just a drop in the ocean, according to Leigh Day.

The legal firm believes that at least 3,000 drivers could be able to claim employee rights.

Is it the app’s fault or the companies imposing their use?

Speaking to Leigh Day, drivers explained how they are given estimated timings between deliveries via an app which they have to meet.

Drivers also described how they are not able to bring parcels back to the depot so must use extra fuel to redeliver at the end of the day. This combined with charges for van rental, fuel, and insurance can leave them with very little earnings. That said, this is the double-edged sword of being self-employed.

As well as Amazon, Leigh Day is bringing similar claims against UberAddison Lee, the delivery company Stuart and used vehicle marketplace BCA.

Delivery driver Bill Lightfoot, whose name has been changed to protect his identity, said:

“The work is horrendous because Amazon controls everything you do. There were times I was out on delivery, and I’d stop for a few minutes, and they’d ring up and ask why I was parked up.”

The money I was earning wasn’t anywhere close to covering my rent and bills. In one week, I worked 36 hours over four days and I should have earned £464 but they gave me £2.74. It doesn’t sound believable but it’s true.

An Amazon delivery driver

“I was very unhappy delivering for them. Effectively I was paying them to do their deliveries, rather than the other way around,” said the driver.

Kate Robinson, a solicitor in the employment team at Leigh Day, said:

“From what we have heard from our clients it appears that Amazon is short-changing drivers making deliveries on their behalf. This is disgraceful behaviour from a company that makes billions of pounds a year. Drivers delivering for Amazon have to work set shifts and book time off, yet Amazon claims they are self-employed.

“Paying out compensation of £140m sounds like a large bill to foot, but for a company that turned a profit of £5.8bn in the first three months of 2021, it’s a drop in the ocean. For drivers, on the other hand, earning at least National Minimum Wage, getting holiday pay and being under a proper employment contract could be life-changing.

It’s time for Amazon to stop putting profit above people and give delivery drivers the employment rights they deserve.”

Why are Amazon drivers entitled to more worker rights?

Leigh Day believes that, because of the way Amazon dictates drivers work and how they fit into Amazon’s business, drivers are entitled to these rights.

Commenting on the news, Dave Chaplin, CEO of IR35 Shield, a company that specialises in contractor employment status, said:

“These cases are very fact-specific, and we’ve seen some Uber drivers get classed as Workers by the Supreme Court, but we also saw the recent Court of Appeal case for Deliveroo where the individuals were classed as self-employed – because the provision of personal service was not established.

“Once personal service is established, the status battleground moves into the area of control, and questions will be asked whether Amazon is controlling the workers sufficiently to constitute a master-servant type relationship.”

Dave Chaplin, CEO of IR35 Shield

Chaplin said that the advancement of technological devices to aid the productivity of the drivers introduces this danger on status because it can be construed as control-by-proxy of the workers, particularly if reward mechanisms are included to coerce the individuals to make themselves available for work.

“The gigatisation of traditional secure employment by breaking a day’s work into lots of fragmented jobs with an implied obligation to standby and be available, despite not getting paid, is where there can be exploitation.

“Parliament needs to step in, decide what kind of society we do want around gig working and legislate accordingly. For years this has been kept in the ‘too-hard to tackle’ section of potential policymaking,” said Chaplin.

My only concern with even more government and legal intervention into freelancing, such as IR35 legal cases have revealed, is freelancers will have little say on the matter of how they work and who they can work for.

Freelancers and contractors pay their taxes, but as the ExcludedUK campaign has shown, if you don’t have a retail property attached to your business as some form of collateral or you have set up your business via a limited liability company to protect your family’s home, your contribution to the economy is not “seen” or deemed as valuable to the government. You only become a protected asset to the government when you pay more national insurance but without any of the salaried worker benefits.

It seems if you want your freedom, you have to pay for it. But don’t expect anything in return.

Have you read?…

‘Not On Amazon’ founder Jamie Rackham: could he be the E-commerce Robin Hood for creatives and artists? – Freelance Informer

Fate of limited company directors and PAYE contractors in HMRC’s hands – Freelance Informer

The PGMOL case: how it could give HMRC greater powers to take the “freedom” out of freelance – Freelance Informer

River Cottage chef’s TV production company sold off after going bust. But Have the freelancers been paid and will they have a future with the new owners? – Freelance Informer

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