The New Fluid Workforce
Much has been said about the gig economy and issues like the “right to turn off”. But running through veins of employment cultures around the world is an entirely new pulse which defies all attempts to contain it.
Today more and more people switch between personal and business communications, multitask on the move, switch in and out of workplace life and are increasingly being evaluated on what they achieve rather how and when they achieve it.
There is nothing new about second jobs in the west, but it is very new as a concept in Japan. The old “job for life” concept is fast breaking down, but until recently it was still necessary to ask your Japanese employer if you wished to take a second job. A change in the law has now removed this impediment and it is only necessary to inform an employer that a second job is being performed. But second jobs are major social and health problem in Japan where many employees regularly work for over 60 hours a week in their main job. There is even a Japanese name for it – ‘messhi boukou’ (killing private life) – and as second jobs grow in popularity the incidence of Karōshi (過労死) or “death from overwork” could become a major problem for all employers.
In the USA second – and even third – jobs have always been commonplace. Because additional jobs reduce the flexibility of a company’s workforce, and drain the energy of workers to perform their man job, many US employers have inserted into employment contracts clauses forbidding moonlighting without prior permission. However, in 2018, a court found such clauses a violation of the National Labour Relations Act [Nicholson Terminal & Dock Co., 07-CA-187907].
Meanwhile, the courts and state revenue services around the world struggle to determine how to distinguish bogus self-employment. In many ways, the distinction between employment and non-employment is the same when considering tax implications and rights to such benefits as paid holidays, notice and sickpay. But the fact that a worker is taxed as self-employed has long been rejected by courts as sufficient evidence for denying them employment rights.
Employee status remains a major issue in America as the courts struggle to find a clear line between employee and contractor. In California the courier company Dynamix changed its policy back in 2004 and started classifying delivery drivers as self-employed, and therefore not subject to California’s Industrial Welfare Commission (IWC) Wage Orders that required minimum pay rates and rest breaks. In a seminal Californian case – Martinez v. Combs 2010 – it was established that employment in California could be defined in three different ways – exercising control over wages, hours and working conditions, to “suffer or permit to work” or to engage someone – establishing a common law employment relationship. Under the second definition an ABC test was applied, which looks at whether a worker is free from control and direction, the worker does additional jobs other than for the party in question, and the worker is registered as an independent entity.
In a recent opinion, this latter three-part test has now been interpreted by the California Supreme Court in a much more qualified way than previously, and it is no longer sufficient that the worker performs work outside the “putative employer’s” place of business. Therefore, employers in California relying on the ABC test should consult their legal advisors to see if their existing classifications still hold. (Dynamex Operations West, Inc. vs. The Superior Court of Los Angeles County).
In the UK the misclassification of a sash window salesman eventually escalated in 2017 to the European Court of Justice where the principal matter at issue was entitlement to compensation for unpaid holidays going back 13 years. The right to such compensation was ruled to exist and with it the possibility of huge penalties for employers if self-employment is found to not apply. Then in 2018 The Supreme Court made a landmark decision in a long running dispute about employment status involving a service company. Although losing at every stage of proceedings, the company Pimlico Plumbers had insisted that the workers it sends out on emergency repair jobs were self-employed. However, progressive courts – including the Supreme Court – disagreed. Although the particular worker in this case had some aspects of his contract that were like being self-employed – such as being able to refuse work – many other features of the relationship were akin to employment. He, for instance, drove a branded van, wore a branded overall and his contract referred to “wages” to be paid.
A total of 4.8 million self-employed workers operate in the UK economy. This decision may affect many of those that are closely integrated into contracting company operations.
For further information about the Fluid workforce and employment status contact the Federation of International Employers (FedEE®) at email@example.com