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John Bowers QC on Employment Law: November Blog

The following commentary is the latest in a series of Employment Law blog posts by John Bowers QC.

Uber again

The issue of gig workers is growing in importance. The so called “gig” economy has grown by 72% since 2010. Research by The New Economics Foundation showed that only 61% of labour force has a secure job that pays at least the living wage. The vulnerability of this particular workforce is clear: it has been said that in the old days a flogger would go round to homeworkers but now an algorithm does that work.

The speed of Uber’s rise is simply phenomenal; the Employment Tribunal in the recent Uber case recorded how Uber’s then Chief Executive, Mr Kalanick, described the business in February 2016: “Uber began life as a black car service for 100 friends in San Francisco – everyone’s private driver. Today we’re a transportation network spanning 400 cities in 68 countries that delivers food and packages, as well as people, all at the push of a button. And … we’ve gone from a luxury, to an affordable luxury, to an everyday transportation option for millions of people.” There are around 30,000 Uber drivers in the London area (of some 40,000 in the United Kingdom) and about two million passengers there registered to use Uber’s services.

The EAT case of Uber BV and ors v Aslam and ors is obviously of interest because of its impact on this particular sector but does not introduce any new principles; it is rather the application of well established doctrines in a new area. The EAT dismissed Uber’s appeal against the employment tribunal’s decision that its drivers are ‘workers’ within the meaning of S.230(3)(b) of the Employment Rights Act 1996 and the equivalent definitions in the National Minimum Wage Act 1998 (NMWA) and the Working Time Regulations 1998 SI 1998/1833 (WTR).

The EAT found that the tribunal was entitled to reject Uber’s characterisation of its business essentially as a technology platform rather than a provider of transport services, and it was correct to look beyond the contractual documentation describing drivers as self-employed contractors offering their services to passengers via the Uber app.  The ET had properly rejected the contention that the contract was between driver and passenger and that Uber was simply the agent in the relationship providing its services as such to the drivers. (para 116).

The key case for the EAT was the Supreme Court’s decision in Autoclenz Ltd v Belcher and ors [2011] IRLR 820 which provided that a tribunal was entitled to find that the contractual documentation did not reflect the reality and thus it was entitled to disregard the terms and labels used in the written agreements. The tribunal was required to determine the true agreement between the parties and, in so doing, it was important for it to have regard to the reality of the obligations and the situation. Judge Eady QC noted that the key question here was: when the drivers are working, who are they working for?

The EAT held that the tribunal was not denying the possibility of individual drivers operating as separate businesses and, as such, entering into direct contracts with passengers; rather, it was merely saying that this was not what it found to be the true position.

The ET was thus entitled to take into account, among other things, as it did here the massive scale of the business, rejecting the notion of Uber as ‘a mosaic of 30,000 small businesses linked by a common platform’. The tribunal could also rely on its finding that drivers were integrated into Uber’s business, and were marketed as such.

An allied issuer was when Uber drivers actually worked. The EAT decided that the drivers were working for the purpose of the NMWA and the WTR at any time when they were logged into the Uber app, within the territory in which they were authorised to work, and able and willing to accept assignments.

Uber said that as and when the driver is available he has no greater obligation to accept an offer of a trip from ULL than from any other private hire operator which might have the driver on its books. The EAT did not accept this characterisation because once drivers are in the territory and have switched on the app they will be offered as trip if they are the nearest driver and they “should accept at least 80% of trip requests” to retain their account status (para 121).

Taylor review

The Government has yet to publish its response to the Taylor Review on Good Working. Its prognosis has not however been well received. It is not clear that a dependent contractor status would be any clearer than the present divide between employee and worker.

I was amused that at the launch of the Report Nick Robinson of the BBC famously asked the Prime Minister whether she had become more familiar with precarious employment after the General Election when she was expected to gain a big majority but in fact lost it

Claiming against individual respondents

In discrimination cases it is of course possible to bring claims against individuals for aiding and assisting the discriminator but I have always been sceptical of the utility of doing so when there is a claim worthy corporate respondent against which the claim could be made. Sometimes they are included as respondents to embarrass the individuals concerned. Often tribunals take against Claimants who do this for no discernible reason. It can be diversionary from the real issues.

And finally…

In each blog I set out a passage that advocates may find useful. This month’s is the classic passage from Lord Reed JSC in R (oao Unison) v Lord Chancellor [2017] UKSC 51 which itself was cited in the EAT Judgment in Uber:

“6. Relationships between employers and employees are generally characterised by an imbalance of economic power. Recognising the vulnerability of employees to exploitation, discrimination, and other undesirable practices, and the social problems which can result, Parliament has long intervened in those relationships so as to confer statutory rights on employees, rather than leaving their rights to be determined by freedom of contract. In more recent times, further measures have also been adopted under legislation giving effect to EU law. In order for the rights conferred on employees to be effective, and to achieve the social benefits which Parliament intended, they must be enforceable in practice.”
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