Earlier this year, the UK’s Supreme Court gave its judgment in the Uber worker status test claim. It ruled that the 25 Uber drivers that brought the case in 2016 are not independent contractors but are deemed workers and therefore entitled to minimum wage and holiday pay.
What’s this got to do with Network Marketing?
This case is significant because it has not only shone a spotlight on Uber working arrangements but is also likely to have implications for the wider gig economy – which is based on flexible, temporary, or freelance jobs, often involving connecting with clients or customers through an online platform.
It is possible that Network Marketing organisations will be under more scrutiny to look at their own operating model in more detail, and in what capacity exactly their distributors ‘work’ for them. The vast majority of Network Marketers are self-employed and act as independent consultants/contractors, in the same way as Uber drivers.
In a recent statement, the Direct Selling Association UK said that “a first assessment of the ruling shows that key criteria used by the court to reach its conclusion are not met in direct selling.” Whilst there are significant differences between the Uber model, such as the level of control that the firm has over its drivers, the Network Marketing sector does share some common characteristics with what has become known as on demand service workers: “Just like in online on-demand work, direct selling is used primarily as a source of supplementary income, it provides flexible working conditions and gives the possibility to direct sellers to work part-time.”
It remains to be seen what the wider implications will be for the industry.