In the UK Employment Appeals Tribunal (EAT) last week, Uber lost the latest case brought against it by its drivers. Across the world, a succession of lawsuits have sought to argue, usually with success, that Uber’s drivers are able to avail themselves of at least some of the protections of employment law. This is a welcome step towards a reconceptualization of the legal approach to eligibility for employment rights.
Labour law has traditionally been premised on a bifurcation: between those who work for an employer and those who are in business on their own account. Only the former qualify for employment rights. With the flexibilisation of the workforce, such bright line distinctions are increasingly problematic. By attaching basic employment rights only to ‘workers’, labour law has incentivized employers to re-configure work relations to avoid taking responsibility for workers’ rights. The result has been the creation of myriad different working relationships characterized not by workers’ independence but by their vulnerability. More problematically still, businesses have been able to shift risks to workers while retaining control over their work. Uber is a prime example. Uber documentation characterizes drivers as carrying on a business on their own account so that they are not entitled to employment rights. Yet Uber drivers are subject to significant control by Uber, while being required to bear the risks usually taken on by employers, including supplying their own vehicles and incidental costs. Last week’s finding that Uber drivers are workers for the purposes of employment law is thus greatly to be welcomed.
UK labour law has traditionally regarded a contract of employment as the threshold requirement for eligibility for employment rights. In partial recognition of the move away from the standard employment relationship, New Labour created a further category of ‘worker’ when introducing new employment rights, including minimum wage, maximum hours and paid holidays. A worker for these purposes is defined as working under a contract personally to perform work or services where the other party is not a customer or client. This definition quickly attracted a range of evasive tactics. Uber’s argument was that it merely acted as an agent for the drivers, who ran their own transportation businesses by contractual arrangements with individual passengers (a scenario which the employment tribunal described as ‘faintly ridiculous’).
It is encouraging that in recent years, UK courts have recognised that the ordinary rules of contractual interpretation should be modified in the employment context to reflect the unequal bargaining power of worker and work-provider. As Elias J put it, ‘armies of lawyers will place substitution clauses, or clauses denying any obligation to accept or provide work, in employment contracts… even where such terms do not begin to reflect the real relationship.’ Courts should look to the reality of the relationship, rather than the labels provided by the more powerful party. Taking this ‘purposive’ approach, the EAT held that the ET was correct to find that there was a contract between ULL (Uber’s subsidiary) and the drivers, whereby the drivers personally undertook work for ULL as part of its business of providing transportation services to passengers in London. Although it was not impossible for taxis to be businesses on their own account, this was belied in Uber’s case by the fact that drivers were not permitted to know the names of passengers, let alone establish a business relationship with them. Moreover, they were under the control of ULL in numerous ways, not least that drivers were required to accept at least 80% of bookings and could be deactivated for poor ratings.
It may be asked why so much energy is spent on the arcane question of the contractual relationships between the parties, especially since there is so much scope for manipulation and evasion. Surely it is time to find a different basis for assigning fundamental human rights at work? More pertinently, surely fundamental rights at work should be an entitlement of everyone in the workforce, regardless of their relationship to the work-provider? By looking beyond the contractual materials to the reality of the situation, courts are already moving in this direction. They should now take the next step and move away from a contractual analysis altogether.