New destinations for employment status?

2 November, 2016

There have been two significant developments since last month’s Employment - black caboverview of the range of campaigns and test-cases challenging the working models adopted by many businesses in the gig economy and what are seen as their exploitation of casualised labour and evasion of employment obligations.

Uber case

The Employment Tribunal has now issued its judgment in the test-case brought by two drivers against the online taxi business Uber. The Tribunal upheld their claims that they fall within the statutory definition of ‘worker’ and so have entitlements to payment of the minimum wage, rest-breaks and paid holiday leave under the Working Time Regulations and the right to bring whistleblowing detriment claims. It held that any Uber driver who was able and willing to accept assignments, within the territory in which they were authorised to work, was working for Uber under a ‘worker’ contract.

The Tribunal was damning in its criticism of the artifice and fabrication shown by Uber’s contractual documentation with its drivers and gave short shrift to its arguments that the drivers were self-employed persons who contracted on each occasion with the Uber passenger. It viewed as “faintly ridiculous” the contention that Uber in London was simply a mosaic of 30,000 small businesses linked by a common platform, rather than Uber operating in business as a supplier of transportation services.  The drivers were recruited and retained by Uber to enable it to operate this business.  The contractual terms on which Uber relied did not correspond with the reality of the relationship with its drivers, and misrepresented the true rights and obligations on both sides.

Uber has stated that it will be seeking to appeal the decision. Since this judgment will have major implications for Uber’s essential business model, and for some 40,000 Uber drivers in the UK, the case inevitably has a long distance to run in the appeal courts before it reaches its final destination.

Inquiry into the future world of work and rights of workers

The Business, Energy and Industrial Strategy (BEIS) Committee has launched a wide-ranging inquiry into the rapidly changing nature of work and the status and rights of those working in the gig economy, as well as agency workers and the self-employed. The inquiry will look at issues such as low pay and working conditions for people working in these “atypical worker” roles.

The inquiry will consider whether the legal definition of ‘worker’ is sufficiently clear, and whether the balance of benefits between worker and employer for casual and agency workers is appropriate. It will address what specific statutory protection there should be for non-employee workers, and what differences there should be for the self-employed in areas such as statutory sick pay, holiday pay and maternity pay.  It will review whether businesses treat agency workers unfairly, compared with employees, and if the use of agency workers should be constrained.  It will also look at the issues surrounding the terms and conditions of employees including zero-hour contracts, flexible contracts and minimum wage enforcement.

Iain Wright, Chair of the BEIS Committee, said this on launching the inquiry:

The nature of work is undoubtedly changing. It will change further with growing use of technology and a spreading of automation across the economy. This might provide flexibility and choice for some people, but unleash insecurity and squeezed working conditions for others. With these economic and technological changes shaking up the world of work, it’s vitally important that workers are protected. In this inquiry we want to hear from all interested parties so that we can help the Government foster a vibrant, dynamic, innovative economy with laws that deliver the benefits of flexibility but which prevent exploitation.”

The inquiry is separate from the Government’s independent review of modern employment practices, announced last month, which will also address whether legal employment categories need to be updated to apply to the gig economy. Coupled with cross-party calls for on-demand workers in the gig economy to be brought within minimum wage legislation, these developments could well result in substantial reforms to the law of employment status and the rights of atypical workers.