UK: Civil Penalties and the Gig Economy

On 8 May this year, the government added a clause to the Border, Security, Asylum and Immigration Bill which extends right to work checks to those in non-traditional employment relationships. But what does that mean?

Under the current rules, only those engaged as employees under a traditional contract are subject to right to work checks. The additional clause in question would increase the range of those subject to checks beyond this arrangement, specifically targeting businesses which involve third-party work.

In practical terms, this move is firmly focussed on the gig economy and will affect well-known companies such as Uber and Deliveroo. 

The Home Office stated on 30 March:

“This means that for the very first time, employment checks will be extended to cover businesses hiring gig economy and zero-hours workers in sectors like construction, food delivery, beauty salons and courier services.”

The then Home Secretary, Yvette Cooper, stated that:

“Under our Plan for Change, we are restoring order to the asylum and immigration system by introducing tougher laws and bolstering enforcement action to tackle illegal working and stopping rogue employers in their tracks.”

Whilst immigration compliance parity amongst sectors is a perfectly reasonable aim, it remains to be seen how the current statutory checks can be realistically applied to a market model such as the gig economy. 

For example, before a delivery driver can commence employment for a supermarket, they would be subject to the standard right to work checks conducted on all new employees. Thereafter, whilst the employee will spend most of their time on the move between customers, they will be expected to check in with their employer at regular staff meetings and so on. In short, their identity will be known to their employer beyond the statutory check. 

It’s a different situation for a delivery driver for Deliveroo, for example. They will soon be subject to employment checks at the outset of their employment arrangement. However, from then on it is unclear how a company will be able to ascertain whether the individual undertaking the third-party work is their agent or not. This is known as “illicit account sharing”, where those registered as drivers for gig economy companies allow their associates to earn money using their account. It is understood that the Home Office enforcement teams have already started targeting drivers on this very basis under Operation Equalize. 

The question then arises, do existing measures extended onto an entirely different market model really serve the same purpose? Irrespective of the answer, the maximum fine for employing illegal workers is the same: £60,000 per illegal worker. 

A formal consultation is expected to take place, conferring with relevant businesses before the changes take effect. 

Businesses will be expected to adapt to the adjustment.  For those companies operating within the gig economy, please get in touch with our team for expert immigration law advice, bespoke solutions, and training.

By Burness Paull LLP, Scotland, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact ukscotland@transatlanticlaw.com

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