Worker or Self Employed? The Gig Economy Battle Continues

Written by Brabners LLP

 

At this time, there is an increasing number of businesses who are operating within the gig economy and who work on the basis that they are engaging self-employed individuals. The distinction between workers and self-employed persons is important because of the greater protection workers are given under our employment laws.

We have seen further developments in the gig economy’s Worker vs Self Employed battle in the last few weeks.  You may remember the Uber case from last year where certain claims were brought on the basis of drivers asserting that they were workers and were successful. Uber appealed that decision and the appeal was heard last month on 27 and 28 September 2017.

The recent case of Addison Lee also involved a taxi firm and drivers asserting that they were workers (and not self-employed).  We discuss this case further below as well.

Uber

Last year, an employment tribunal held that two Uber drivers were workers under the Employment Rights Act 1996 (“the Act”) and not self-employed as Uber had argued. The drivers brought various claims relating to entitlements of workers, including a claim for unlawful deductions relating to holiday pay and failure to pay national minimum wage.

Uber asserted that they were simply a technology platform putting drivers in touch with passengers via their app and that they were in no way a provider of taxi services. They argued that the drivers were self-employed.

The tribunal disagreed, confirming that the actual reality of the arrangement didn’t match the contractual arrangements and the amount of control exerted over the drivers by Uber (amongst other reasons) meant that the drivers were in fact engaged as workers. The claims for holiday pay and national minimum wage were upheld.

Following the ruling, Uber confirmed that they were appealing the decision. This appeal was heard in the Employment Appeal Tribunal on 27 and 28 September. The outcome of the ruling is not yet known but will make interesting reading (and hopefully provide further guidance) for businesses who operate in the gig economy and those who use independent contractors to carry out their services in particular.

Addison Lee

In the same week, as Uber’s appeal was heard, another “status” case was heard in the employment tribunal on 25 September. This case involved another London based taxi firm, Addison Lee. The tribunal ruled that three drivers of Addison Lee should also be classified as “workers” and not self-employed individuals. The Judge, in this case, confirmed that the suggestion that Addison Lee drivers were independent contractors, as Addison Lee alleged, “defied evidential gravity”. The drivers have to comply with a dress code, pay fixed fees for hiring an Addison Lee car and were unable to refuse jobs once logged onto the booking system. In particular, the level of control exerted over the drivers prompted the tribunal to rule that they are workers and therefore entitled to certain employment rights.

It is important to note that this tribunal decision is not binding on other tribunals. However, with the outcome of an increasing amount of “status” cases being that independent contractors are in fact workers under the Act, it is difficult to ignore the ruling.

What Now?

The flurry of cases may well lead to clients reviewing their arrangements with self-employed contractors and seeking to revise certain contractual or practical arrangements. A number of reviews concerning current working practices and employment statuses have/are taking place – Matthew Taylor’s recent report is an example. Businesses and self-employed persons should look out for consultations concerning potential legislative changes in the near future and get involved in those consultations if they want their voice to be heard!

 

Disclaimer: This bulletin is for general guidance purposes only and should not be used for any other purpose. This article is written by Brabners and reproduced with their permission. Brabners is a Limited Liability Partnership