Following a series of high profile events across the globe, UK games workers are seeking greater recognition of their employment rights. Tell-tale games studios' sudden collapses and the resultant furore over layoffs in California, the Games Developers Conference 2018 roundtable 'Union Now?' and movements such as Games Workers Unite!, whose London chapter participated in the Independent Workers' Union of Great Britain (IWGB) strike on October 30 2018, indicate that change is afoot in the games industry.

The UK has a relatively unique and rapidly changing working environment, which means that games businesses need to be mindful of shifting regulatory and cultural norms. Games businesses need to be aware of, and regularly review their workers' employment status in the UK, and consider a range of compliance issues, from working time, holiday entitlement, overtime and pay rates to lesser-considered tax compliance matters and the impact that union involvement may have on a workforce.

Categories of paid workers

In the UK, the first question when reviewing the employment status of your workforce is what category of worker they fall into under UK law. Individuals working in the UK may be categorised as self-employed, workers, or employees. Worker is a wider term than employee, and includes individuals who, although not employees, perform work personally for a business other than as a client or customer of that business. The growth of the gig economy has seen a number of high profile cases about how to categorise people working outside traditional work patterns, including those involving Pimlico Plumbers, Uber and Deliveroo.

The main three employment categories (overview only) in UK law are:

Understanding the differences between employment categories is critical when analysing the changing UK worker environment, as many gig economy workers fall into a grey area between self-employed and worker, or sometimes worker and employee, which tends to lead to controversy while legal categorisation catches up with the reality of disruptive working practices.

Conditions and 'Crunch'

Red Dead Redemption's recent release prompted media attention when games workers spoke out about the long hours involved in getting the games ready in time for their release dates. It is a long-established problem in the games industry that overtime and long hours are an inevitable part of any developer's job as release dates draw near, a period known as 'crunch'.

The UK distinction between the three categories of employment will impact games businesses' ability to subject its workers to certain working conditions like crunch periods. Some of the key regulations employers need to consider when requiring work for longer hours, regardless of an individual's employment status, are set out below.

If you are found in breach of these laws, you are likely to create dissatisfaction in the business and may be subject to employee tribunal claims which could damage reputation. The Health and Safety Executive can investigate compliance with maximum weekly working times (although it cannot currently enforce time off or rest break entitlements). Failure to comply with health and safety regulations can also, in theory, lead to prosecution.

Changes in the regulatory environment

The importance of correctly categorising members of the workforce is very much a 'hot topic' at the moment, particularly in industries which tend not to conform to the more traditional ways of working. This is a constantly developing area on which games businesses need to keep a close watch. More recent high profile developments include:

• Deliveroo riders were categorised as self-employed following a ruling by the Central Arbitration Committee in November 2017. An important element confirming their self-employed status was that riders were able to pass on a job to a substitute or abandon a job, and were not obliged to provide a personal service (thereby losing the right to be classified as workers). The IWGB's case for judicial review of that decision began on 14 November 2018, arguing that the case has become a broader issue of the protection of human rights.
• Uber drivers were held to be workers in an employment tribunal hearing and the decision was upheld by the Employment Appeal Tribunal. At the time of writing, the parties are waiting for the judgment of the Court of Appeal, which heard a further appeal in October 2018. Uber is arguing that its drivers are self-employed, not workers or employees, and that they operate through an operator on an agency basis.
• Claims made by Olympic cyclist Jess Varnish to be heard at an employment tribunal against UK Sport and British Cycling – to bring these claims she has to demonstrate that she is a worker. The case is due to be heard in December 2018 and is interesting as it raises the question of whether athletes are workers.
• Foster care workers forming a union (backed by the IWGB) are arguing that they are entitled to at least worker status.
• The Taylor Review, an independent review on employment practices in the UK published in July 2017, contains many suggestions for changes to employment regulations, including clarifying the categories of employment. The Review also contains suggestions for enforcement of employment law more generally, with suggestions to create a multi-body taskforce with responsibility for enforcing holiday and sick pay, for example.
• In line with the suggestions made in the Taylor Review, the UK government is already taking an increasingly hard line and has proceeded to name and shame employers if they have not paid their workers minimum wage (as mentioned above).

This environment creates an enormous amount of uncertainty for games employers with potentially serious ramifications for those getting it wrong.

Coordination and unionisation

People working in the games industry are increasingly seeking to unionise in order to protect their rights, in particular, where they are currently classed as self-employed but don't necessarily think they should be. It is early days but the pace of organisation has increased following the establishment of other gig economy unions in the UK such as the IWGB, founded in 2012.

IWGB has been labelled a 'modern' union – its remit has extended from protecting the likes of Uber drivers to seeking more generally to advance the rights of workers in the gig economy, particularly those on zero hour contracts. The IWGB has proved it is an organised and effective union, representing its members in court cases against Deliveroo, the University of London, Uber and CitySprint, among others. The results of union involvement have been dramatic. If those working in the gig economy are held to be workers, labour costs will increase dramatically.

There is not, as yet, a UK union specific to games workers, but international movement Games Workers Unite!, for example, has a UK chapter which is growing, prompted by reports of poor working conditions and compounded by similar international efforts to unionise the games sector. Games Workers Unite! has applied for union status, its chief aim "to connect pro-union activists, exploited workers, and allies across disciplines, classes, and countries in the name of building a unionized games industry".

If those working in the games sector do unionise, there will be more organised employment tribunal claims businesses which may require increased insurance. This could become significant for buyers and sellers of games businesses.

The political pressure exerted by unions may well be the catalyst for the implementation of the Taylor Review employment reforms, and bolstering HMRC's enforcement powers by, for example, the establishment of a labour market enforcement agency with wider powers to fine and chase businesses on any non-compliant employment practices.

What to think about

UK games businesses need to give careful consideration to the way in which they use their workforce, in particular, to their employment status. Getting it wrong may result in workforce dissatisfaction, fines and even court cases, where statutory protections are engaged.

Additionally, games businesses should be aware of possible union membership among their workforce. They should also ensure they are up to date on changes to rights, especially with regard to contractors, workers and zero hours members of the workforce as there may be serious commercial and legal implications if these are not anticipated and addressed.

Practical steps

• Speak to one of our employment law experts for more information on how to structure your workforce – Sean Nesbitt and/or Paul Callaghan.
• Re-evaluate the employment status and resulting terms and conditions of your workforce, (employment, contract or otherwise), particularly:
• the circumstances around what you are asking an individual to do at work, the nature of the role and the level of control you exert; and
• consider inserting a tax indemnity into a contract for services if an individual is a consultant rather than a worker or employee.
• Monitor and keep abreast of the regulatory environment.
• Be aware of moves to industry unionisation.

For more information

• Read our Modern Work reports for further employment law context
• For general commercial advice on games sector-related issues, contact our international Games and eGaming team, headed in the UK by Graham Hann.