Law and labelling: Uber and (non)workers

Published on: Author: Ruth O'Donnell Leave a comment

In what is already being described as one of the most important judicial decisions of the year, the Manchester Employment Tribunal has ruled on the employment status of Uber drivers in the UK.

Factual background
Uber is fast becoming a household name in what is known as the ‘gig economy’, in which people, much like a musician or comedian performing at a ‘gig’, undertake a succession of separate pieces of work which are each paid separately, and which carry with them no guarantee of further work.

A collection of current and former Uber drivers brought a claim that Uber had breached their rights, primarily by failing to provide paid leave or pay the minimum wage (once the various fees and commissions were deducted from their pay). Both of these claims are only open to those who hold the legal status of ‘workers’, so Uber’s defence was that their drivers were not workers in Uber’s employment but instead self-employed people using Uber’s app/platform to run their businesses. (Indeed, not only did it argue that the drivers were not its workers, but also that it does not provide transportation services at all, but merely permits drivers to provide those services via its technology.)

The situations of two drivers in particular were considered by the tribunal as a lens through which to view Uber’s wider business, its labelling of its drivers and the claims of those drivers as a group.

Legal background
The employment status of what are known as ‘atypical workers’ (i.e. those not in traditional permanent and salaried posts) has long been a difficult question for the courts to address.

Many employers, like Uber, seek to label those who do work for them as independent self-employed ‘contractors’ or ‘consultants’ to avoid the costs (national insurance, sick pay, holiday pay) that come with employing someone. For some, particularly senior and highly-paid professionals who can afford to value flexibility over a guaranteed income, this label may be accurate and this arrangement may be mutually beneficial. For the majority working in the ‘gig economy’, however, the flexibility of atypical work is a burden not a benefit, the pay is low, exploitation is rife and the label of self-employment operates to exclude them from most of the protections employment law provides.
UK judges are aware of this tendency, and are empowered to look behind the label given to the relationship to assess the ‘real’ status of the relationship between the parties. Assessing the ‘real’ status is no straightforward task for any judge, and in this case the tribunal was forced to wrestle with the added complexity of the new technologies and practices of a ‘gig economy’ company.

The decision
The tribunal’s decision has been described as a ‘scathing critique’ of Uber’s arguments that the drivers freely enter into contracts directly with their passengers (despite all payments going through Uber and Uber tightly controlling the terms on which drivers and passengers interact, down to specifying the exact route to be taken on each journey). That is putting it mildly – a flavour of the judgement can be had from the following passage:

“…we have been struck by the remarkable lengths to which Uber has gone in order to compel agreement with its (perhaps we should say ‘its lawyers’) description of itself and with its analysis of the legal relationships between [itself], the drivers and the passengers… it seems to us that [Uber’s] general case and the written terms on which they rely do not correspond with the practical reality. The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous… The absurdity of these propositions speaks for itself.”

More important than its tone, however, is the content of the decision. It is a clear, concise and yet comprehensive review (in language that is really quite accessible and free of unnecessary ‘legalese’) of Uber’s practices, and how it presents those practices to its drivers and the public. Ultimately, the core of its decision can be distilled into the following:

“…any driver who (a) has the App switched on, (b) is within the territory in which he is authorised to work, and (c) is able and willing to accept assignments, is, for so long as those conditions are satisfied, working for Uber under a ‘worker’ contract.”

The impact
The decision cuts through the heart of Uber’s labelling of its drivers as non-workers, as independent micro-businesses, and affords drivers certain rights to workers during the periods they are actively working (such as the accrual of holiday pay, the right to receive the minimum wage, and protection from detriment for whistleblowing).

Yet, while it is a clear victory for the drivers, it is a limited one: the tribunal stopped short of finding an ongoing working relationship with Uber between these periods which would have significantly improved the value of the rights afforded to them as ‘workers’, and stopped short of finding the drivers to be Uber’s ‘employees’ (which would have given them access to more rights again).

Uber, and many of its contemporaries describe themselves as being, or offering, ‘disruptive’ technologies, transforming what they see as old-fashioned and stagnant industries. They do so, according to their own labels, not by providing a competing service on the same terms, but by offering a ‘platform’ to allow others to provide a service in a wholly new way. However, as this case shows, ‘disruption’ can be far from progressive. For these companies, being disruptive often not only entails, but requires, the rolling-back of individuals’ rights through labelling workers as non-workers, and through labelling services as technologies.

Uber has allegedly told its staff that it will appeal, that the decision is limited in its application to the two drivers chosen to represent the group, and that nothing will change in how it operates. While we wait to see how this decision fares once more cases come through the courts and tribunals, and while we wait to see the outcome of the government’s inquiry into the ‘gig economy’, it will remain an important intervention by the judiciary in what is an increasingly important debate over the rights of workers in emerging sectors and services.

Regardless of whether you agree with the decision, or side with Uber or its drivers, it cannot be denied that the Manchester Employment Tribunal has provided us with a sweeping and yet meticulous exploration of the practical and legal issues at stake.

~ Christopher Boyd

Christopher Boyd is an Associate at Morton Fraser and a PhD candidate in the School of Law.  His thesis topic is ‘(In)security and Superfluity: the Regulation of Work(ers) in the Contemporary Global Order’.  Christopher is supervised by Professor Emilios Christodoulidis and Dr Akbar Rasulov.

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