For Whom the Bell Tolls: “Contract” in the Gig Economy
Are Uber drivers ‘limb (b) workers’ and so entitled to fundamental statutory rights such as the minimum wage and working time protections? In a decision of fundamental significance, six Justices of the United Kingdom Supreme Court (UKSC) upheld the original Employment Tribunal (ET) decision that the drivers were ‘limb (b) workers. In reaching this conclusion, the UKSC endorsed the ‘purposive’ approach that had been set down in the earlier case of Autoclenz v Belcher by Lord Clarke.
In a single judgment delivered by Lord Leggatt, Uber has effectively sounded the death knell for ‘contract’ in employment status. After Autoclenz, there was some ambiguity about the sense of ‘purposive’ being deployed in the judgment, and resulting uncertainty in the application of its ‘true agreement’ approach. Was it simply a modification of general contractual techniques, or was it a more radical doctrine rooted in the statutory purpose of worker protection? After Uber, ‘purposive’ should be understood as the general statutory purpose of worker protection in employment protection legislation. Fidelity to this legislative purpose required tribunals to examine the economic substance of the work arrangements. Where those arrangements displayed the contextual features of subordination and economic dependence, they should be treated as within the scope of the relevant statutory protections. To accord primacy to the written contract would, in effect, be to invite powerful contracting parties to opt out of the statutory labour standards that ought to apply to the work arrangements. This would subvert the statutory purpose of protecting individuals who were vulnerable to contractual exploitation. It would also be inconsistent with the various statutory restrictions on ‘contracting out’ of employment rights in worker protective statutes. It is just as much a ‘contracting out’ where this isn’t spelt out, but consists in the insertion of ‘terms inconsistent’ with employment status with the object of avoiding the statutory protection.
After Uber, the task of tribunals will now be focused on applying the statutory protections purposively and realistically, sensitive to the realities of control and dependence in working arrangements. This should apply to all work statuses that are used to allocate protective statutory rights, whether ‘employee’, ‘limb (b) worker’, or Equality Act worker. Since the ‘purpose’ relates to the statutory right being claimed, the particular work status should be irrelevant to the purposive approach. It should also apply to all facets of the definitions, including the construction of substitution clauses and ‘personal work’.
The written documentation was extensive and complex in Uber. Drivers pick up passengers via an app owned by Uber. The app confirms the booking, sets a route, calculates the fare, receives the payment and generates an “invoice” recording the trip. There is a written contract between the passenger and Uber about the “booking services”, denying Uber is anything other than a technology platform and asserting Uber is an agent of the drivers. According to the written documentation, Uber is no more than a “tool” connecting passengers and drivers; and it does not itself provide transportation services or control the drivers. In sum, if the written documentation is treated as determinative, when providing transport, the drivers are not working “for” Uber under a contract, which is presented as a mere agent. If that is so, they would seem to be outside the scope of the limb (b) category given that this is a requirement under the statutory definition.
In Uber, this purposive approach examined the myriad forms of direct and indirect control in the Uber business model, the effect of which was to falsify the presentation of the Uber driver as an independent entrepreneur with significant commercial autonomy. This enabled the court to cut through the morass of contractual documentation and jargon and to conclude that there was indeed a ‘contract’ between the driver and ‘Uber London Limited’ to provide work or services. This was despite the fact there was no apparent contractual nexus between these two parties on the basis of the extensive written documentation and labyrinthine web of intermediaries. The finding of a contract for work or services between the driver and the Uber London Limited in Uber provides further evidence of the radical break with ordinary contract law brought about by this purposive statutory approach. The ‘facts’ must now be understood in light of the wider statutory context. This may be contrasted with the strict ‘necessity’ test for implication of contracts in older employment status cases like James v Greenwich BC.
The ‘purposive’ approach in Uber represents an increasing alignment with the worker-protective principles set out in the ILO Recommendation 198 on Employment Relationship (2006). This instrument specifies that “the determination of the existence of such a relationship should be guided primarily by the facts relating to the performance of work and the remuneration of the worker, notwithstanding how the relationship is characterized in any contrary arrangement, contractual or otherwise, that may have been agreed between the parties.” This is reflected in Lord Leggatt’s emphasis on examining the substance of the arrangements realistically in light of the statutory purpose, identifying those features of the work arrangement which expose the individual to exploitation by the stronger party. The Recommendation also provides that legal tests should allow for “(a) a broad range of means for determining the existence of an employment relationship; (b) providing for a legal presumption that an employment relationship exists where one or more relevant indicators is present.” The sensitive contextual assessment of the Uber business model in the ET, endorsed by the UKSC, was based upon a ‘broad range’ of relevant factors. While the Uber judgment stops short of endorsing a ‘legal presumption’ of worker status, it is clear that the ‘purposive’ enquiry favours a finding of inclusion where the substantive realities point to the need for statutory protection.
In 1986, Bob Hepple set out a radical vision for employment rights based upon an ‘employment relationship’ concept (Bob Hepple, ‘Restructuring Employment Rights’ (1986) ILJ 69). This would be a broad and unitary definition to allocate statutory protections, identifying relevant indicative features such as dependence, economic risk, subordination, and integration. The great advantage of this approach was its detachment from the ‘riddle’ of contract. In many ways, this seminal article foreshadowed the approach in the ILO Recommendation. Uber represents a significant step towards this general approach. In 2010, a few weeks after the birth of my first son, I wrote the following words on the Court of Appeal decision in Autoclenz, defending “a purposive approach to the characterisation of the contractual arrangements, consistent with the protective purposes of the statutory employment rights being claimed [and]…located within a “labour law” frame of reference.” (Alan Bogg, “Sham self-employment in the Court of Appeal” 2010 Law Quarterly Review). Uber represents the coming of age of the radical potential of the Autoclenz ‘purposive’ approach, and the triumph of the ‘labour law’ frame of reference.