A recent UK employment tribunal decision found that Uber's
drivers are not in fact contractors (as Uber's documents and
structure say) but are entitled to employment benefits such as the
national living wage and paid leave, as they fell within the
relevant definition of "worker."
The tribunal rejected Uber's arguments that is was merely a
technology company, not a transport business, and that the drivers
were independent contractors because they could choose where and
when they worked.
The drivers who took Uber to the tribunal gave evidence that
they were pressured to work long hours and accept jobs, and that
there were repercussions if they declined a job, and that for some
periods their earnings were well below the national living wage (as
little as £5 compared to the £7.20 minimum per
The tribunal said that Uber's documents resorted to
"fictions, twisted language and...brand new
terminology" which "bears no relation to the real
dealings and relationships between the parties," should be
read "sceptically," "are designed to misrepresent
the relationship" and that "The notion that Uber
in London is a mosaic of 30,000 small businesses linked by a common
'platform' is to our minds faintly ridiculous...Drivers do
not and cannot negotiate with passengers...They are offered and
accept trips strictly on Uber's terms."
The arguments of the parties, and the comments of the tribunal,
are closely related to the arguments which arise under Australian
law when the status of an arrangement as an employment or
contractual relationship, or as a sham contract under the Fair Work
Act, needs to be resolved.
The case has a long way to go in the English courts, as Uber has
stated it will appeal, and there are potentially three levels of
appeal before the outcome is final. Nevertheless, the decision has
prompted vigorous discussion of what this means for other business
models in the "gig economy," such as Deliveroo and
Foodora. Deliveroo riders went on strike in London in August,
raising similar issues about flexibility and freedom
(Deliveroo's view), compared to "exploitation and
exhaustion" (the strikers' view).
These issues are yet to be tested in Australia but one can
imagine language similar to that of the UK tribunal being used in a
sham contracting case or an employment/contract decision to attack
gig economy structures, because it is a basic issue in such cases
that it is the real nature of the relationship, rather than what
the parties have called it, that is significant. This is especially
so when there is an imbalance in power between the principal and
the contractors who would otherwise be employees, and who receive
conditions below those which would apply if they were employed.
This is an issue which has a long future and which may raise the
prospect of government regulation, to deal with the issue more
broadly as the gig economy spreads, or in suitable cases, action
from the Fair Work Ombudsman. A future to be watched with interest,
especially for any business engaging workers as contractors rather
than as employees.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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