A labour market that allows workers the flexibility to work when they want, for as many different ‘employers’ as they want, and the number of hours they want, appears to be the direction of the Gig economy. Depending upon your political persuasion – and your position in the labour market, this is either a fantastic opportunity for businesses and the economy to thrive, whilst affording workers maximum flexibility, or an extremely retrograde step which further dilutes already limited protections for vulnerable workers.
The Gig economy – so named because its workers are likely to have a number of part-time, short-lived jobs (‘gigs’) – has emerged in recent years and is driven in part by mobile technology allowing workers with free time and ‘employers’ with available work to be put in touch with each other at short notice. The phenomenon of Uber is an example of the Gig economy.
For the uninitiated, Uber works in the following way:
- Customers download an App onto their smartphone and register with Uber by providing personal details and debit/credit card information.
- Uber has a pool of available drivers to whom it is connected by smartphone technology. The drivers provide their own vehicles and fuel, although Uber exercises control over which vehicles are acceptable.
- A customer wanting to ‘take an Uber’ will go to the App on their smartphone, log-on, and request a journey. If they provide details of where they are going to, they can receive an estimate of the likely cost of the journey.
- Having received a request from the customer, Uber will check its pool of available drivers using the GPS on their phones and establish who is the closest driver to the customer. The closest driver will be offered the job, and he/she will have 10 seconds to accept. If the request is not accepted, it will be offered on to subsequent drivers until one accepts the job.
- At the end of the journey, the Uber software will calculate and suggest a cost for the journey. The driver and customer may depart from the suggested cost, but in practice this doesn’t happen often. The customer’s credit or debit card is then debited for the cost of the journey.
- The Uber driver is then billed 25% of the cost of the journey by Uber.
Since the Uber model is new to the UK, it is perhaps unsurprising that a case has recently been considered by an Employment Tribunal. In the case of Aslam and Farrar v Uber BV, Uber London Ltd and Uber Britania Ltd, Mr Aslam and Mr Farrar prosecuted claims in the Employment Tribunal for failure to pay the minimum wage and for failure to provide paid leave. Mr Aslam also asserted that he had been subject to detrimental treatment as a result of ‘whistle-blowing’.
All of the claims brought by Mr Aslam and Mr Farrar have a requirement that – as a minimum – the Claimants have status in employment law as ‘workers’. The generally accepted test for worker status is that the worker has a contractual obligation to provide their services personally. Uber argued – amongst other things – that the drivers had no obligation to even turn on their mobile phone apps to register for work – let alone accept offers of driving jobs. They also argued that the contracts made it clear its drivers were a series of independent self employed businesses, linked through the Uber app, and to whom business opportunities were made available.
In the case of the argument that there is no requirement to provide any services, the Tribunal accepted that the drivers had no obligation to switch on the app. However, they found that when the driver had switched on their app they were under a contractual obligation because:
- They were obliged to accept and not cancel trips.
- They were obliged to accept the fare negotiated by Uber.
- They were under a considerable amount of control from Uber.
In the case of the second argument – that the contracts make it clear Uber is not an ‘employer’ and that the driver is a self employed contractor, it is trite law that a court or tribunal can look behind the contractual terms to the reality of the situation. In this case, the Tribunal did look behind the contracts, concluding that they did not accurately reflect the reality of the situation.
Consequently the Tribunal found in favour of the drivers and found that they were workers entitled to:
- 5.6 weeks' paid annual leave each year
- a maximum 48 hour average working week, and rest breaks
- the national living wage
- protection of the whistleblowing legislation.
Note however, as the drivers were deemed workers rather than employees, they will not be entitled to prosecute unfair dismissal claims and nor will they be entitled to statutory redundancy payments.
Note also that this is a decision of an Employment Tribunal and is not binding on other tribunals. It is also likely to be the subject of an appeal to the Employment Appeals Tribunal (and beyond). It is likely that this is simply the first salvo in litigation related to the Gig economy.
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