With our first article, we tried to look a bit deeper into labor law issues of gig economy and unclear situation of classifying workers, then explain latest development in the U.S. Here we are going to compare notes in the light of UK Supreme Court Decision.

On 19 February 2021, UK Supreme Court delivered a ruling which classified app-based UBER drivers as workers, instead of independent contractors. The conflict between Prop. 22 and UK Supreme Court Decision is outstanding and most probably will play and important part what happens in Europe next for UBER drivers.

Claims and Defense

Plaintiffs Yaseen Aslam, James Farrar and others claimed they were workers employed by UBER and therefore entitled to certain labor protections like annual leave, minimum wage. UBER defended that according to the Service Agreement signed between the drivers and UBER, drivers were independent contractors, UBER only acted as an agent and a legal relationship directly between driver and user is created when a driver agrees to provide transportation service.  

Court Decision

The Court firstly refused to label the relationship between UBER and drivers depending on the Service Agreement, due to the fact said document was written solely by the firm and imposed to drivers.

The court stated three elements of "worker contract" as (1) a contract whereby an individual undertakes to perform work or services for the other party; (2) an undertaking to do the work or perform the services personally; and (3) a requirement that the other party to the contract is not a client or customer of any profession or business undertaking carried on by the individual, then proceeded to analyze UBER working system. As a result, five factors listed below were concluded and those factors concluded in the classification of drivers as "workers":

  1. UBER sets the fare. The drivers may accept lower fee but cannot anything higher. UBER can change the fare or percentage of driver fee due to local conditions or user request/complaint.
  2. The Service Agreement is imposed to drivers. Such concept would not have occurred if the powers were balanced.
  3. While a driver can freely choose where and when to work by logging onto the app, there is a constriction on whether to accept a request for transportation. One of control mechanisms is keeping track of acceptance and cancellation number of the driver. When cancellation reaches a certain number, several penalties are applied such as being logged out of the app.
  4. UBER has total control over how the services are delivered and there is a rating system to supervise drivers. Unlike booking sites rating system does not offer users any preference, is only used to measure drivers' performance. (DiDi in China, differs from Uber in that regard since rating of drivers directly affects user choice1)
  5. Finally, UBER restricts any kind of communication between driver and user. Thus, the driver is not free to offer services independently.

UBER persistently defended it acted as agent of drivers, creating a legal relationship between users and drivers whenever a transportation request is accepted via app. However, the Court didn't listen those arguments stating a person should be authorized by another. Since UBER could offer no proof of such authorization, it could not act as an agent. That means when whenever a transportation request is accepted via app, UBER is the sole responsible of the service and can fulfil its responsibility with help of employees or subcontractors. Since drivers lack independence, they can only be regarded as workers in need of protection.

Also, UBER defended that as stated in Prop. 22, working time should be limited to time between acceptance of a transportation request and completing the request. Nonetheless the Court ruled that the time driver spent logged onto the app and at disposal of users ready to respond was also working time.

What does it mean for employers in UK and what should be done?

Employers should keep in mind that workers have the right to refuse unsafe workplace conditions, make necessary amendments to workers' contracts, ensure all necessary measurements are taken.

Footnote

1. 'Your Driver is DiDi and Minutes Away from Your Pick-up Point': Understanding Employee Motivation in the Gig Economy of China; Mukhopadhyay-Chatwin, International Journal of Developing and Emerging Economies, Vol.8, April 2020

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