The media appears to be full of headlines talking about the gig economy at the moment. The topic even featured in election campaigning last week, with political parties talking about zero-hours contracts and other employment related issues. But what exactly is the gig economy and does it matter?
The gig economy is a way of working that is based on people having temporary jobs or doing separate pieces of work, each paid separately, rather than working for an employer. Source: Cambridge Dictionary
The gig economy is another form of freelancing or self-employment. The gig economy phrase was coined to highlight the fact that people get paid for each ‘gig’ they complete. This is in contrast to a standard employment contract – whether permanent or temporary, which would usually be based on a number of hours worked. Famous examples of the gig economy include food deliveries for companies such as Deliveroo, taxi drivers for companies such as Uber, couriers and even independent contractors such as plumbers, in the recent employment case affecting Pimlico Plumbers.
Flexibility or exploitation?
On the one hand, the gig economy like other forms of freelancing and self-employment usually offers greater flexibility. People can choose to work as and when they have time available, rather than being tied to a regular hours arrangement. However it does mean that gig workers are not classed as employees, so they have no rights when it comes to things like holiday pay, sick pay or maternity pay.
This has led to some high-profile court cases with gig workers claiming that if they are being treated as regular workers then they should receive the same rights and protection. These cases highlight a key difference between the gig economy and zero-hours contracts. With zero-hours contracts workers still do have a contract with a company, so some basic entitlements to things like holiday pay remain.
The changing employment environment
Whatever you think of the gig economy, its high profile demonstrates the way our economic landscape is changing. Official UK figures from the Office for National Statistics report almost five million people in the UK are now working as self-employed.
With more and more people working freelance, the government is having to adapt to how it treats all the different types of workers. Financial institutions such as banks and mortgage providers are also having to rethink how they approach lending with increasing numbers of people working in what would historically have been considered insecure employment.
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