Changing Nature of Employment - Uber and Fair Pay Agreements
26 October 2022Today is a significant day with the release of the Employment Court decision that four Uber drivers are in fact employees; and the Committee of the Whole House debating the Fair Pay Agreements Bill, meaning it will come into force before Christmas.
The Chief Judge of the Employment Court found that all four Uber drivers were employees of Uber during the periods where they performed transportation services.
This will add grist to the mill for the Government’s response to the recommendations of the Tripartite Working Group on Better Protections for Contractors. The proposed legislation is aimed at defining “employee” and making it unlawful for persons to enter into contractor arrangements unless the worker is genuinely in business on his or her own account. A consultation document is expected before the end of the year. See our earlier article here.
Background
The four drivers had written agreements with Uber entities that specified that the entities were not employers but rather providers of the App that connects drivers to the digital platform and facilitators of the interactions on the platform. The defendants’ position was that these written agreements accurately described the relationships.
The four drivers sought a declaration that the real nature of the relationship was that the Uber entities collectively employed them.
Decision
The Employment Court highlighted the need to adopt a purposive approach to determining the status of the drivers, having regard to the applicable legislation and its role in protecting vulnerable workers, regulating the labour market, and ensuring the maintenance of minimum standards. It was held that the broader social purpose of the legislative framework must be kept in mind when considering whether a worker is an employee.
Thus, the task for the Court is to ascertain whether the individual is within the range of workers to which Parliament intended to extend minimum worker protections. The Employment Court also reiterated that the question of whether someone is an employee depends on the substance of the relationship and how it operated in practice, rather than the label attached to the relationship in the written agreement.
The Court accepted that some of the usual indicators of a traditional employment relationship were missing. However, it was found that significant control was exerted on drivers in other ways, including via incentive schemes that reward consistency and quality and withdrawal of rewards for breaches of Uber’s Guidelines or for slips in quality levels, measured by user ratings.
Uber collectively had sole discretion to control prices, service requirements, guidelines, terms and conditions as well as other aspects of the business such as marketing. Drivers were restricted from forming their own relationships with riders or from organising substitute drivers to perform services on their behalf.
The Court found that in reality Uber exercised significant control over each of the drivers. While the means via which the control was exercised are not generally associated with a traditional workplace, the underlying point remains the same: “Uber was able to exercise significant control because of the subordinate position each of the plaintiff drivers was in and which its operating model was designed to facilitate and did facilitate.”
The Court considered that the evidence pointed to Uber running a transportation business, not merely a digital platform that facilitates interactions between drivers and passengers. It held that the drivers worked for that business; it was not simply a commercial arrangement; and they did not run a business of their own.
The Chief Judge found that all four drivers were employees of Uber during the periods where they performed transportation services.
This judgment does not have immediate legal effect on any Uber driver other than the four specified drivers who sought declarations from the Court. However, because of the apparent uniformity of the defendants’ operation, the judgment may have a broader potential impact on other Uber drivers.
Uber has said it intends to appeal the judgment.
You can access the full decision here.
For more information: Tony Teesdale – 021 920 323, Justine O’Connell 021 920 410 or Michelle Battersby 021 993 735