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The Uber Case: A ‘One Step Forward Two Steps Back’ Development to the Gig Economy Workforce?

Updated: Dec 3, 2018


(Image Source: https://static.independent.co.uk/s3fs-public/thumbnails/image/2016/07/07/10/uber2.jpeg?w968h681)

In November 2017, the Employment Appeal Tribunal (EAT) handed down an important, long-awaited judgement concerning the employment status of Uber drivers. The outcome is generally positive to both academic scholars and British zero-hour workers, as the case constitutes an essential legal precedent affirming the protection status of ‘gig economy’ and flexible workers where the courts have continuously expressed their reluctance to confer legal protection in the previous occasions. Whilst such level of gratification is understandable in light of the ground-breaking changes of judicial attitude towards casual workers, it must be reminded that the effects of the ruling in the long-run must not be overstated, inter alia, when the inherent issues associated with the common law test of protected status remains unresolved. Quite to the contrary, the way that how the Tribunal has forcibly twisted the legal framework to respond to contemporary social norms would support the proposition that the Tribunal is doing more harm than good to the legal development of British employment law in terms of legal certainty.


The ‘Standard Employment Relationship’ (SER) Model and its Subsequent Developments


To many British lawyers, the English labour law is commonly conceptualised as rigid and substantially outdated. Such criticism is undoubtedly a reasonable one in light of how the legal foundations concerning the coverage of labour protections were laid down by the courts in the mid-twentieth century, and the legislature never attempted to modernise the outdated approach adopted by the courts through its statutory reforms (Employment Rights Act 1996). The mission of reform is therefore, to a large extent, left to the discretion of judges.

Under the current legal framework, an individual is not automatically entitled to legal protection once they have personally agreed to provide labour to another individual. They must display certain characteristics before the court recognises them as a legally protected ‘employee’ or ‘workers’. Whilst it is true that the court has once correctly stressed the need of a pragmatic approach to ensure that assessment can be conducted holistically in light of the increasingly dynamicity of working relationships, it is regrettable that subsequent courts have departed from such important notion by seeing certain characteristics as ‘irreducible minimum’. These elements include the level of control of the employer, the existence of mutuality of obligation and the power of the individual to nominate substitution (i.e. duty to provide personal service) which play a substantial role in contributing to the vulnerability of casual workers. The Carmichael case from the Court of Appeal (CoA) is a classic example of such submission – a group of freelance tour guides hired by a power station had their labour rights turned down solely on the ground that there exist no promises on the employer’s side to provide future works.[1] Alternatively, in Montgomery, the Court refused to find an employment relationship between the agency worker and the hiring agency as the latter only exercised a minimal level of control over the former.[2]


Upon recognising the rigidity of the law on its ability to respond to the dynamicity and ongoing changing nature of the contemporary working norms, it is apparent that the Court has subsequently attempted to alleviate the harshness of the common law criteria by adjusting the degree of each elements required. Such notion of adjustment could be exemplified from the judicial interpretation of the worker’s concept in Byrne Brothers, where the court insisted to adopt a lower threshold of the common law ‘employee’ criteria with the intent to protect casual workers.[3] From many perspectives, the case of Uber clearly constitutes one of these ‘adjustment’ cases where the court has been enthusiastic to fit Uber drivers into the ambit of ‘workers’, despite the apparent ambiguity of the existence of mutuality of obligation, inter alia, when Uber drivers are not obliged to switch on the Uber app and are entirely up to their autonomy to accept a job offer.[4] Whilst the ultimate outcome is desirable, the ‘relaxation’ strategy adopted by the tribunals is, however, problematic. It still cannot be said with precision the extent to which mutuality of obligation is required in any subsequent cases – whether a gig economy worker with similar working agreements will be considered as ‘workers’ remains substantially unknown, inter alia, when the Tribunals have in a number of previous occasions maintain the strictness of the criteria. In Quashie, a freelance lap-dancer was refused employee status, despite her continuous commitment to work with her employer for 80 weeks.[5] All in all, the failure of the legislature to codify the relevant judicial approaches into statutory law would necessarily mean that judges would inevitably possess the power to exercise their discretion and have the final say on the matter, rendering its outcome hardly predictable.


In light of the 2006 International Labour Organization (ILO) Recommendation to encourage signatory states to lay down common criteria to assess the merits of one’s claim,[6] it is without doubt that the use of the SER model to determine labour rights coverage will continue to be the prevailing practice valued by global policymakers. The substantial reliance on the ‘adjustment’ strategy to tackle labour market precariousness, however, clearly casts doubts to the sustainability and effectiveness of the solution. The process of globalisation and women’s participation in the workplace continues to play a significant role in shaping the nature of work arrangements, hence resulting in further deviation from the standard model, making future employment relationships difficult to be explained solely by the pre-determined, one-size-fits-all common law criteria.


You are workers, so what? – The ‘Notional’ Rights of Atypical Workers


Being classified as ‘worker’ under the current legal framework enjoys a number of alleged benefits, albeit to a lesser degree than ordinary ‘employee’. Amongst all, the most predominant statutory protection applies to worker is the assurance of minimum wages and holidays under the National Minimum Wage Act, enacted by the British government in 1998 and 2015 respectively to fulfil its legal obligation imposed under the EU Directive. Nowadays, these rights are considered as indispensable, with a general view that every individual should be entitled to regardless of the quality of their overall employment relationship.[7] The implementation of the ‘worker’ concept therefore has also widely been regarded by courts and judges as an attempt by the British government to extend labour rights coverage to non-standard workers.[8]


Despite its highly-applauded intention, both statutory instruments nevertheless require an individual to ascertain the number of hours they work in order to calculate the extent of protection that an individual is entitled, which clearly casts some conceptual difficulty in the case of zero-hour workers. According to s.2 of the Working Time Regulations 1998, the statute provides a brief definition of working time, namely that “any period during which the worker is working, at the employer’s disposal [my emphasis] and carrying out his activity or duties, in accordance with national laws and/or practice”. Whether on-call and standby hours count towards the ambiguous phrase of “working”, however, has never been clarified by the legislature. Notwithstanding that the Court of Justice of the European Union (CJEU) has recently established the possibility for on-call hours to be included within the meaning of the statutory definition,[9] the Court insisted only to include these hours if the employers have placed considerable restrictions to effectively remove the worker’s own autonomy. This, for instance, includes control towards the places where the employer is expected to be during the standby hours. The underlying philosophy of the ruling is apparent and consistent with the orthodox spirit of labour law, that is, enforcing the trade-off between individual’s freedom and entitlement to wages and labour rights.[10]


Whilst it is true that the purpose of labour law to protect individuals against unfair bargaining position remains relevant at this time and age, the sole focus on the concept of self-determination clearly has a diminishing role to play in light of the increased workplace flexibility. Whether Uber drivers are protected under the Working Time and minimum wages legislations, however, remain substantially uncertain due to the degree of autonomy given to the drivers in operating the business. In the EAT judgement, notwithstanding that the standby hours of Uber drivers are held to be ‘working time’ as they are required to accept at least 80% of jobs offered when they have the Uber app switched on,[11] the Tribunal nevertheless maintained that the essential element required is that the drivers themselves have to effectively made unavailable to other private hire operators (PHV).[12] In other words, any subsequent attempt by Uber to remove the relevant acceptance threshold may eventually overturn the situation, as drivers are theoretically no longer required to make themselves available exclusively for Uber to maintain their account status. This when compounded with the fact that Uber drivers are not bound by strict rules concerning their obligation to switch on the Uber app and hence no restrictions as to the location and time to pick up customers, clearly provided a substantial degree of flexibility to drivers which could potentially render their labour rights notional, despite having classified as ‘workers’ under the current legal framework which aims to protect them.


What next? The need of careful reconceptualization of contemporary employment relationships


With the positive externalities associated with freelance work which has proven to be highly beneficial to both employers and employees, the British employment level rose to its peak since 1971, to a rate of 74.6%, with record-high workforce participation within the group of women and adolescence.[13] Businesses are more willing to hire as they possess the ability to adjust the level of supply and hence manpower needed depending on consumer demand (commonly known as the ‘just-in-time’ approach which helps to reduce production costs to compete efficiently),[14] and individuals are more willing to participate in the workforce despite having multiple commitments such as that of family and academic. It is without doubt that flexible work will continue to form one essential aspects of the British economy, and the use of gig-economy workers will unavoidably become increasingly prevalent in the coming decades.[15] The reluctance of the judiciary to contemplate the underlying rationale of the ‘worker’ concept, and to interpret current legislations accordingly, has proven the incompatibility of the ‘legislature hands-off approach’ within the British legal order, particularly when judges have continuously stressed that such acts are potentially ultra vires.[16] The Uber case clearly acts as a recent piece of empirical evidence in proving the above allegation.


Having considered the complexity of labour market fragmentation and, as a number of academic scholars highlight, the lack of an ‘unitary category’ of atypical work where direct comparisons could be made with standard work,[17] it is apparent that one must depart from the orthodox thinking that sees modern employment relationships as forms of measurable variations from the standard model. The Parliament, upon their next reform proposal, must take into account two important factors to ensure a sustainable solution to tackle labour market precariousness, namely, (1) the judicial reality and (2) the purpose of labour law in general to protect individual’s vulnerability. Such purposive approach allows policymakers to construe the question of labour protection coverage in a more free-thinking basis and hence, to lay down a set of detailed rules which does not only apply exclusively to pre-existing employment relationships, but also to any potential, future forms of work effectively.


Hugo Tam

Employment Law Section Editor

12th July, 2018


 

[1] Carmichael v National Power plc [1999] ICR 1226, 1231.


[2] Montgomery v Johnson Underwood Ltd [2001] ICR 819, 831.


[3] Byrne Brothers v Baird [2002] ICR 667, 678.


[4] Aslam v Uber [2017] IRLR 4 (ET), [85].


[5] Quashie v Stringfellows Restaurants Ltd [2013] IRLR 99.


[6] ILO, Employment Relationship Recommendation, 2006 (No 198), para 2 & 4(a)-(d).


[7] M Freedland, ‘The Regulation of Casual Work and the Problematical Idea of the “Zero Hours Contract’ (Oxford Human Rights Hub, 25 March 2014) <http://ohrh.law.ox.ac.uk/the-regulation-of-casual-work-and-the-problematical-idea-of-the-zero-hours-contract/> accessed 18 October 2017.


[8] Byrne Brothers v Baird [2002] ICR 667, [17(4)].


[9] Case C-518/15 Ville de Nivelles v Rudy Matzak (Fifth Chamber, 21 February 2018).


[10] See, for example, G Davidov, ‘The Three Axes of Employment Relationships: A Characterization of Workers in Need of Protection’ (2002) 52(4) The University of Toronto Law Journal 357 on Davidov’s idea of protecting individuals from democratic deficit at work.


[11] Uber BV v Aslam [2018] IRLR 97, [124].


[12] Ibid. [126].


[13] Office for National Statistics, Statistical Bulletin on UK Labour Market: February 2017 < https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/feb2017> accessed 26 January 2018.


[14] J Fudge & R Owens, Precarious Work, Women and the New Economy: The Challenge to Legal Norms (Hart 2006) 7-8.


[15] Department of Business, Energy, and Industrial Strategy, Good Work: The Taylor Review of Modern Working Practices (July 2017) 25 <https://www.gov.uk/government/publications/good-work-the-taylor-review-of-modern-working-practices> (The Taylor Review) accessed 11 July 2018.


[16] See, for example, James v London Borough of Greenwich [2007] IRLR 168, [56]-[61]; Saha v Viewpoint Field Services Ltd [2014] UKEAT/0116/13, [22]-[23].


[17] A Adams, M Freedland, J Prassl, ‘The “Zero-Hours Contract”: Regulating Casual Work, or Legitimating Precarity?’ (2015) 5 European Labour Law Network Working Paper Series 25, 7-8.



Disclaimer: The views expressed are that of the individual author. All rights are reserved to the original authors of the materials consulted, which are identified in the footnotes above.

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