Pensions Regulator Chief Executive Charles Counsell has stated that, despite him urging gig economy firms to recognise staff as workers and enrol them in pension schemes last year, not all employers in the rapidly growing gig economy have done so. Addressing the House of Commons work and pensions select committee, Counsell said the definition of a “worker” may have to change in order to ensure more people in the gig economy are enrolled in pensions.
In February 2021, the Supreme Court ruled that Uber drivers should be classified as workers rather than contractors, entitling tens of thousands of Uber employees to full employment rights, including pensions and the minimum wage. In the wake of this ruling, Counsell urged other gig economy firms to “voluntarily and promptly” enrol their workers in pension schemes.
While Uber and some other gig economy firms have acted to reclassify their drivers as workers, other major gig economy operators, such as Deliveroo, have not done so. In some cases, companies have continued to fight legal attempts to classify their drivers as workers.
Asked by MPs how gig economy companies had responded to his calls to classify drivers as workers, Counsell conceded that only “some” firms had engaged with the request. Counsell said that he was working alongside businesses in the gig economy that covered between 150,000 to 200,000 people, adding that he hoped these people would ultimately be enrolled in a pension scheme.
Counsell said: “The definition of a worker is in the legislation and so what we do find is there are gig economy workers who have contractual mechanisms in place, which mean they don’t come under that definition, and for me that’s where we need to encourage [gig economy firms] to do the right thing for their workers in any case.”
The committee asked Counsell whether he felt that the slow progress warranted changing the definition of a “worker”, to which he responded: “In the end, if there are a significant number of people who are losing out because they are not being automatically enrolled and they are part of the gig economy, then I think we may have to look at the definition of a worker.”
“The more we can shine a light on this […] and encourage gig economy employers to engage with us, and more importantly to set up a system of automatic enrolment for their workers, the better.”
