Uber Drivers – 1, Uber – 0: The Smackdown in the Gig Economy

The evolution of the gig economy has grown exponentially in recent years. It goes without saying the main gig economy jobs we are familiar with is working for Uber, and Deliveroo, or in over in the US, DoorDash. However, defining these work relationships has become increasingly difficult over the years, and the recent English court case of Uber BV and others v Aslam and others [2021] UKSC 5, has made for huge developments within English labour law and the shape of the gig economy.

What is the history behind the gig economy?

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Modern Era of Gig Work:

The 20thcentury saw a change in events, where now in order to define whether someone is an employee or gig worker, one must look to the contract of employment. 

Contractual Relationship:

There are many tests a court can apply to determine whether or not a person is an employee or not. The tests are as follows:

  1. Mutuality of Obligation: important test in relation to defining working relationships. This asks the question: is an employer obliged to accommodate a worker, and is that worker bound by a contract to do that work? Case Law: Carmichael v National Power PLC [1999] ICR 1226: Findings: The House of Lords held the plaintiffs were not employees, on the basis that they did not pass the mutuality of obligation. Therefore, the plaintiffs were not entitled to written terms of a contract. The House of Lords arrived at this decision as they looked to certain benefits employees have such as holiday and pensions.
  2. Control Test: this test asks whether the employer can tell the worker what to do, and how they should do it? Subordination also sits within this test. If you are a subordinate to your employer, you will not be free to make independent choices. Case Law: Yewen v Noakes [1880] 6 QBD 530: Findings: The Court of Appeal held he was not an employee, solely on the basis that the building owner did not control his work in any shape or form. He received his money from a separate role as a clerk, and therefore did not pass the control test for tax purposes. 
  3. Organisation/Integrational Test: is the worker a fundamental asset to the business? Case Law: Cassidy v Ministry of Health [1951] 2 KB 343: Findings: However, the Court of Appeal held that the defendants were vicariously liable for the negligence on part of the doctor, based on the employee status test, that the doctor was an integral member of the hospital.
  4. Ready Mixed Test: This test was born out of Ready Mixed Concrete Ltd v Minister of Pensions [1968] 2 QB 497: Findings: The court looked at a number 3 points when deciding if a person is an employee: 1) Work in return for pay 2) sufficient control held by the employer; and 3) the contract in question is similar to other contracts of service (i.e. other employees).

EU Approach:

Although the UK is no longer a part of the EU, it is interesting to see their take on defining a casual/gig worker. This includes Subordination, Nature of the Work (similar to the Organisation/Integrational Test) and Remuneration (interestingly, this payment from an app like Uber, is discredited as a means, therefore striking of subordination). This is the EU’s interpretation, and is not legally binding in the UK. This evidentially shows fragmented nature of defining casual/gig workers.

UK Approach:

The Employment Rights Act 1996 introduced a ‘third category’ of workers in the UK. Due to this extension, the court in the Uber case had a much broader scope of consideration when determining the boundaries of gig workers’ rights.

 (Fun Fact: in Ireland, employment legislation does not provide for a third category!). 

This now brings us to the main event: Uber BV and others v Aslam and others.

The Beginning of the End for Uber:

Aslam, Farrar and Others v Uber BV and Others [2016]:

The plaintiffs claimed that they should be classified as workers to attain the legal benefits attached to workers. The London Central Employment Tribunal ruled in favour of the plaintiffs on the basis of the UK Employment Rights Act. This means that Tribunal ruled the plaintiffs fell under the workers category. Therefore, were entitled to minimum wage and paid leave. 

Uber and Others v Aslam and Others [2018]:

Uber appealed prior decision. To Uber’s defeat, the Court further accepted that Uber control their drivers. (By control, for example, this means that Uber drivers cannot delegate their tasks).

This is an important milestone for the Uber drivers, as this further cements their worker status.

Uber BV and others v Aslam and others [2021]:

Uber appealed the Court of Appeal decision. The UK Supreme Court unanimously agreed that the Uber drivers are workers, and are completely entitled to their rights which now include: 

  1. Minimum Wage;
  2. Holiday Pay;
  3. Rest Breaks.

In an attempt to defend their case, Uber argued that its drivers were not workers, and rather, were independent contractors. In other words, Uber drivers were framed to have contracts with their customers rather than Uber itself. Uber also contended that they are independent contractors because Uber drivers have the ultimately decision as to where and when they can work. 

What’s important to take away from this argument is that the UK Supreme Court had to define a ‘worker’ for legislative purposes and apply it to the case before them. So therefore, we must note that the fundamental examination is looking tostatutory interpretationof a worker, and not the contractual interpretationof a worker.

All image rights belong to According To A Law Student (ATALS).

Other issues considered by the UK Supreme Court were:

  1. The Uber app itself is controlled by Uber, not the drivers. Passengers using the app are encouraged to rate their drivers. If a driver does not maintain good ratings, Uber has the final say on the termination of a driver using the Uber app for work. Therefore, we can clearly see a control aspect in this instance.
  2. Although Uber drivers earn a cut from each trip, Uber which sets the rate of pay. Uber has also set further incentives to encourage maximum profitability.
  3. Uber drivers can be seen as ‘subordinate’ to Uber. This is so Uber can monitor driver’s acceptance and cancellation of passenger journeys. Uber can essentially ‘block’ drivers who do not meet the required acceptance rate.

What is the Impact on Uber?

While this is a well and good judgment for Uber drivers, Uber now has to implement this ruling into its company policy. Uber has attempted to circumvent this ruling by stating that the judgment will only apply to the drivers who had originally brought the legal action to court. They also issued a statement that they intend to consult with their drivers to assess their views. 

Uber distributed a questionnaire, and subsequently have been under media fire for the contents of this questionnaire, where critics have noted this is actually undermining the significance of the Supreme Court ruling. One of the claimants who initiated the original case, James Farrar, contended that this questionnaire was Uber’s attempt ‘to divert attention away from their obligation to abide by the Supreme Court ruling…’. 

Why did Uber do this? As Uber is potentially required to fork out £100 million, this will certainly put a dent in their pockets! Keller Lenkner (law firm) was contacted by 1,000 more Uber drivers after the ruling also wanting to claim compensation. This is a valid attempt of other Uber drivers, already on the Uber books to claim. From the ruling of the Supreme Court, Uber has actually done little to show their drivers that they care for implementing the ruling. Ubers consultation with their drivers seems more of a scare tactic than actually looking for their opinions…It has been estimated that drivers on Uber’s books could be entitled to about £10,000.

Uber’s feathers have clearly been ruffled as a result of this new evolution of the gig economy, but Uber has no intention of extending the Supreme Court ruling to its UberEats drivers. Why you ask? Because they interpreted the ruling as to being only specific to the ‘private hire industry’. This is an important aspect to consider, because as a result of Uber drivers being classified as workers, it will entice others who want to be classed as workers to follow suit with claims. 

Wider Implications for the Gig Economy?

The Supreme Court ruling will heavily influence the perception of the gig economy, and there’s a strong chance that other companies who operate in the gig economy will follow in the footsteps of Uber. As a whole, it really makes light as to how businesses in the gig economy such as Uber does not have to be seriously affected in the way they work, i.e. they offer flexible working, and the ruling will not modify their business. 

While this judgment is for UK Uber drivers, it will no doubt become influential in other jurisdictions. This judgment has already made an international impact and set trends (eg; California). As for the EU, this ruling has pushed policy makers to revisit their definition of working relationships, where they have expressed a need for improvements in the EU gig economy. Looking back to 2020, Uber made an appearance at the top French Court (known as The Court of Cassation)in relation to employee status, where the Court held that an Uber driver was to be classified as an employee.

Conclusion:

The history between casual workers and the gig economy sector has been quite interesting! The modern spin on the gig economy now does offer some hope for future gig workers.

The whole essence of the gig economy is to allow flexible working. But, we must not look past basic rights of workers, whether that includes pay, or even health and safety. From the historically unpredictable ‘casual worker’ status to the current classification of workers, the law is aiming to evolve in parallel to the evolving increase of gig work in our society. However, we may see continuance of legal battles when it comes to the gig economy of the likes of Deliveroo drivers, as seen in IWGB v CAC & Deliveroo [2018]. The UK High Court deemed Deliveroo drivers as independent contractors, solely on the basis of drivers being able to delegate their work and being able to work for other competing businesses. This case is being appealed, and it will be an interesting watch to see if there is a difference in judgments. (Keep an eye out!)

This article was written by Sarah Barry. Sarah is a BCL Graduate from the National University of Galway, Ireland, and a current Masters student in the University of Limerick, Ireland. Sarah is a Content Writer for According To A Law Student (ATALS), and an an aspiring Commercial Law Solicitor. Sarah has a keen interest in international commercial law, especially in Intellectual Property and Mergers and Acquisitions.

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