The demise of the gig economy has been much predicted. And in the UK, it is certainly under legal attack. Meanwhile, the government is conducting a review to establish whether ‘gig’ contractors/workers need clearer protection in the light of their relatively weak bargaining position.
What is the gig economy? Companies using ‘self-employed’ people to do small contract jobs for which they are paid on a job (or gig) basis. Two well-known examples are taxi drivers for Uber and delivery driver/riders for Deliveroo, although there are many other examples.
The models set up by both these companies in the UK state that the drivers/riders are self-employed contractors and not employees or workers having the rights of employees. The rights in question would include minimum wages, holiday and sick pay and collective bargaining rights, amongst others.
Uber : Last week Uber lost a case brought by two of its (former) drivers. The drivers claimed they were employed as drivers by a taxi company called Uber and were not self-employed contractors. In reply Uber argued that it was not a taxi company and the drivers were independent contractors in effect operating as small independent businesses. Uber’s defence was that it was merely a technology company providing an App which could, if used correctly, bring willing independent taxi driver businesses together with willing independent customers. It argued that in no sense was it a taxi company.
All Uber’s documentation had been carefully drafted by “armies of lawyers” to reflect this position.
Echoing the words of a Californian court last year, the judge in the London Uber case said:
“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 court decided that, whatever the contract documentation might say, on the actual facts Uber drivers were ‘workers’ employed by Uber and were entitled to the protections that English law afforded people of that status.
The court did not say that it would not have been possible for the drivers to be self-employed. Only that, under the current model adopted by Uber, the drivers were in fact ‘workers’.
Uber is appealing the judgment. If the judgment is upheld it will have profound consequences for the Uber model in the UK to say nothing of the cost of back claims.
Deliveroo : Meanwhile, a trade union representing riders who work for the delivery company Deliveroo on a similar ‘gig’ basis to Uber drivers have written to the company requesting recognition to carry out collective bargaining on behalf of the riders. If the company grants recognition it will be acknowledging that the riders have ‘worker’ status and rights. If it declines recognition, the Union has said it will go to court to establish the riders’ ‘worker’ status and their entitlement to collective bargaining.
UK law draws a distinction between ’employees’, ‘independent contractors’ (who are self-employed and carry out a profession or business undertaking on their own account) and ‘workers’ (who may be self-employed for tax purposes, but who provide their services to a business undertaking carried on by someone else). The distinction is important because it governs the rights and protections that the individual is entitled to. UK law recognises the weaker bargaining position of ’employees’ and ‘workers’ as opposed to a truly independent contractor who is able to negotiate the terms on which the service is provided.
The case of Uber makes it very clear that the gig economy, even if it has invested millions in developing technology, cannot mask the service that it carries out by having “armies of lawyers contriving documents in their clients’ interests which simply misrepresent the true rights and obligations” of the parties.