Update on the gig economy


In the run up to Christmas there were a number of high profile cases relating to employment status whereby individuals claimed that they should be classified as workers or employees rather than self-employed contractors. The current trend from the decisions show that the courts are more likely to find that self-employed contractors are workers. The judges are looking past the written contractual documentation and examining the fuller picture to determine the facts of what happens in practice.

In response to the recommendations made by the independent Taylor Review in July 2017, the UK government has announced proposed changes to improve transparency and provide greater protection for agency and zero-hours workers. More information on the “Good Work Plan” will follow in a separate article.

Trade union judicial review challenge against Deliveroo fails

In the case of R (on the application of the Independent Workers Union of Great Britain) v Central Arbitration Committee and Roofoods Ltd t/a Deliveroo, in November 2016 the claimant’s submitted an application to the Central Arbitration Committee (“CAC”) that it should be recognised for collective bargaining purposes by Deliveroo under the Trade Union and Labour Relations (Consolidation) Act 1992 (the “1992 Act”). In June 2017 the CAC held that a number of Deliveroo drivers were not workers and therefore not entitled to collective bargaining rights using the statutory recognition procedure set out in the 1992 Act. The CAC held that as the drivers’ contracts contained a substitution clause and there was a genuine right to use this clause, there was not an obligation to provide a personal service and thus they were not workers. The trade union challenged this decision by way of judicial review, arguing that the riders’ right to not collectively bargain through their trade union amounted to a breach of collective bargaining rights in Article 11 of the European Convention on Human Rights (“ECHR”), however the challenge was rejected by the High Court. The High Court held that Article 11 of the ECHR was not engaged as it applied to those in an employment relationship. The union representing the drivers have indicated that they are likely to appeal this decision.

National Gallery court case

Twenty seven artists and art lecturers are testing their employment status in the public sector. The claimants, some of whom have worked at the National Gallery for decades, were dismissed in October 2017 without any consultation or benefits as they were classified as self-employed freelancers rather than employees or workers. The case, heard at the beginning of December 2018, has gathered public support and Jeremy Corbyn is backing the claimants stating that there are a number of people in the UK who are “bogusly” self-employed. The claimants argue that they undertook regular work, were paid and taxed through PAYE and were required to attend training sessions and appraisals and so are workers, not self-employed contractors. No judgment has been given yet.

Employment Appeal Tribunal rules Addison Lee drivers are workers

In the case of Addison Lee v Lange and others three drivers working for Addison Lee brought claims for holiday pay and national minimum wage, arguing they were workers not independent contractors. The tribunal in first instance accepted the drivers’ argument that they were in fact workers despite the wording of the contract; Addison Lee appealed this decision. The Employment Appeal Tribunal (“EAT”) upheld the tribunal decision that Addison Lee drivers were workers, rather than self-employed contractors and therefore entitled to national minimum wage and paid holiday. Addison Lee argued that the drivers were independent contractors as the contractual documentation stated that drivers could choose their own days and time of work, there was no obligation on either side to offer or accept work and wording in the contract provided that nothing in the contract would render the driver an employee, worker, agent or partner of Addison Lee. The tribunal held that the reality of the agreement was different – once a driver logged onto a device, they were assigned jobs and drivers had to accept it and could only refuse if they had an acceptable reason otherwise a sanction could be imposed. The tribunal stated that the contractual documentation did not reflect the true situation and there was an overarching contract between the drivers and Addison Lee providing for mutual obligations for the company to offer and the drivers to perform work personally. The EAT agreed that the written terms did not reflect practice and the tribunal had taken a “realistic and worldly wise” approach to the reality of the situation rather than relying on what was specified in the contractual documentation.

Are Uber drivers workers?

The Court of Appeal has provided its decision in the case of Uber BV and others v Aslam and others on whether private hire drivers operating through the Uber platform are workers rather than self-employed contractors. Drivers brought a claim in the tribunal against Uber for failure to pay the national minimum wage and paid holiday leave. The tribunal and the EAT agreed with the drivers that they should be classified as workers – Uber appealed this decision to the Court of Appeal. The Court of Appeal rejected Uber’s appeal. It was held that the written contracts in place, which provided that Uber was merely an intermediary providing booking and payment services and that the drivers had a contractual relationship with the passengers, did not reflect the reality of the situation. The tribunal was correct in examining all the circumstances surrounding the relationship to determine the true position and was correct in concluding that Uber runs a transportation business and the drivers provide skilled labour through which the business delivers its service and earns profit. Uber have permission to appeal to the Supreme Court. It is worth noting that Lord Justice Underhill dissented and argued that the commercial terms in place between the drivers and Uber were not a “sham” but reflected the true working arrangements.

Lidia Poczok

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