Last week’s Supreme Court’s landmark ruling that Uber’s claimant drivers could be classed as ‘workers’, not self-employed, will translate into essential protections, in terms of more pay and job security, plus financial protection in times of sickness or injury, maybe even a pension in time. It’s a ruling that’s expected to have a widespread ripple-effect, forcing organisations built on gig or zero hours’ models to focus less on growth and more on the people who make that growth possible. It’s a focus that seems to be trending; one that many traditional organisations are arguably only just waking up to, as a result of the pandemic. And it’s with all of these evolving needs in mind that the group protection industry needs to stop, take stock and reset.
It feels like we’re in a state of unfreeze – a societal shift – at the moment; what with the pandemic, Black Lives Matters, climate change, leaders realising that people should come before profits, or, to put it another way, if you take care of the former, the latter will take care of itself, and now hopefully much needed rights and protections for gigs and zero hours contractors.
While challenging, this state of flux also allows us to shift and change in ways we haven’t before. In short, it’s a time of potentially great opportunity for the group protection industry. The value of the core insurance products – whether life, income protection or critical illness – is proven. So why is it that the number of group income protection (GIP) schemes doesn’t change from one year to the next? Only 11 per cent of the workforce is covered by GIP.
The product provides essential peace of mind, as always. But the distribution and delivery needs reimagining to help meet evolving needs. This must be done with a big tech ‘service first’ mindset; mobile-first; personalised, flexible and combining the cost efficiencies of group insurance with the underwriting claims certainty of retail. It will also require a new way of working between insurers and intermediaries of all shapes and sizes.
Although the Uber ruling only directly applies to a small number of drivers who brought the claim against the organisation, it represents an important step in the right direction. And it is widely expected to set a precedent for how millions of gig economy workers are treated in the UK; potentially ensuring they qualify for the national minimum wage and other employment rights, including holiday pay and sick pay.
And if the last financial crisis is anything to go by, we could see much more growth within and alongside such organisations post pandemic.
TUC figures show that around 5 million people in the UK were employed in the gig economy in 2019, a figure that is likely to have increased during the pandemic. The majority of these are younger workers; nearly two thirds – 60 per cent of intensive platform – or gig – workers are aged between 16 and 34.
The term ‘platform’ or ‘gig’ work covers a wide range of jobs that are found via a website or an app – like Uber, Handy, Deliveroo – and accessed using a laptop, smartphone or other internet connected device. ‘Intensive’ means working at least once a week.
Non-employing businesses – which include sole proprietorships as well as gig and zero hours models – accounted for 88 per cent of growth in the UK private sector business population since 2000. The highest rate of increase (+7 per cent) was seen between 2003 and 2004 and between 2013 and 2014.
Such is the growth in new forms of work that the Taylor Review of Modern Working Practices was published in July 2017. It concluded that the labour market was changing, that new forms of work were raising questions about existing legislation and there was a real need to “organise our national framework on an explicit commitment to good work for all”.
The review suggested a new category of ‘worker’ for those who are contractors or self-employed but have little control over when and where they work, stating that workers should be entitled to some of the employment rights and benefits to which ‘employees’ are entitled.
In December 2018, the Theresa May government published the Good Work plan, outlining how it intended to implement the recommendations of the Taylor Review, accepting 51 out of the 53 recommendations.
The government has now passed secondary legislation giving effect to some of the commitments in the Good Work plan – namely to extend to workers the right to receive a written statement of employment rights (including entitlement to sick pay and other benefits) on day one of employment, or on request for existing employees. However, many of the core recommendations in the Taylor Review have yet to be implemented.
It is hoped that the Supreme Court ruling will help reignite this work. But, in the meantime, there’s no denying that the social shift is happening. And it’s a potential tipping point that the insurance industry cannot afford to ignore. Neither can it attempt to fit a square peg in a round hole. Only true evolution will do.
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