The gig economy: worker status legal challenge

The London employment tribunal is set to publish its eagerly awaited judgement on whether Uber drivers are workers and therefore entitled to the worker rights, including minimum wage, rest breaks and paid annual leave. Uber faces legal challenges in the US and elsewhere.

Today’s tribunal judgement will not be binding on other tribunals or other businesses operating similar models to Uber in different sectors. But it will set the tone for what is fast becoming the big employment law issue of our time. Uber argues it is merely platforms connecting their drivers to consumers.  The unions argue the relationship involves control and service consistent with worker status; and that these platforms should not be absolved from basic worker protections like the minimum wage and paid annual leave.

The leader of the Independent Workers Union of Great Britain is reported to have said “The so-called gig economy is a euphemism for exploitation. “It’s basically a model that big profit-making companies have developed where they have realised, for the most part, they can get away with having lots of workers who work for them, often exclusively, and help them make their profits. But they don’t provide these people with the minimum wage, holiday and sick pay or pensions and everything that workers across the country have come to take for granted.”

Can employment law cope with these challenges?

The traditional case law developed legal tests used decide whether a person is an employee or worker or self-employed are, some say, not fit for purpose in this new digital gig economy age. Case law develops and evolves to meet new the challenges of change in social, economic and political norms. But can it cope with the pace of technological change and the rampant growth of the gig economy?

Parliament intervention

The Business, Energy and Industrial Strategy Committee has recently launched an inquiry ‘into the future world of work, focussing on the rapidly changing nature of work, and the status and rights of agency workers, the self-employed, and those working in the ‘gig economy’. The inquiry also looks at such as low-pay and poor working conditions for people working in these non-traditional employee roles.’

The terms of reference include the following question: “What should be the status and rights of agency workers, casual workers, and the self-employed (including those working in the ‘gig economy’), for the purposes of tax, benefits and employment law?”

HMRC has launched a new gig economy compliance team

Last week Frank Field MP confirmed on his website that the Financial Secretary to the Treasury, Jane Ellison MP, has confirmed that HMRC is ‘transforming its compliance approach with the creation of a new Employment Status and Intermediaries Team to focus on status and employment intermediary risks’.

What follows?

Whoever ‘wins’ it is likely the judgement will be appealed to the employment appeal tribunal.

If Uber loses any business operating a similar model should look carefully at the judgement and how it may impact on their model.

Uber will need to consider holiday pay, pension auto-enrolment, potential discrimination claims under the Equality Act other worker rights.

Can Uber pivot to avoid worker status?

Uber may try and remodel its driver terms / relationship to tackle the specific points raised in today’s judgement so it can argue (again) that its drivers are not workers.

What next today?

We will be reporting the decision on employmentsolicitor.com today.

We will publish reaction from employment solicitors here.

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