Legal-ease: Where next for the gig economy?
Caroline Acton, July 03, 2017
Decisions in a recent tribunal case involving Uber could set a precedent for future gig economy rulings
Uber has received leave to appeal the decision on the employment status of its drivers at an employment appeal tribunal.
In Aslam and others v Uber BV and others an employment tribunal considered whether certain taxi drivers were workers for the purposes of receiving the national minimum wage and working time rights.
Among the key findings of the tribunal were the following:
- That Uber’s written terms contradicted several of its working practices and the written terms did not accurately reflect how things operated ‘on the ground’
- Uber controlled all key information in relation to passengers and excluded drivers from it
- Uber automatically forced drivers to log off the app if they failed to accept or cancel trips in accordance with stipulated requirements
- Uber essentially controlled the fee for the journey and drivers were discouraged from soliciting tips
- Uber routinely accepted liability for fraud, or refunds stemming from passenger complaints
- Uber imposed various conditions on the drivers, instructed them how to do the work and controlled their performance.
As such the tribunal ruled in October 2016 that the drivers were workers and not self-employed.
The ramifications of this decision are huge because workers have limited employment rights that include the right to be paid the national minimum wage and the right to paid holiday.
This also has an impact on the so-called ‘gig economy’. There is no single definition of the term gig economy. In short, it seeks to describe a model of working where individuals sell their skills and services, possibly on an ad-hoc basis. Increasingly it is being associated with online transacting (for example individuals selling online translation services on a piece by piece basis).
The tribunal’s judgment will be of significant interest to workers and employers in the gig economy. The more a business model resembles Uber’s, the more this tribunal decision will be of interest (or concern, depending on your point of view).
However, it is important to remember that this is a first instance decision and is therefore not binding on future cases. Furthermore the decision is highly fact-sensitive. The tribunal itself suggested that Uber could have devised a business model that would have led to a different decision (although it did not say how much of the model would need to be changed to achieve this). We will have to wait and see what is in store next for the gig economy.
Caroline Acton is a solicitor at ESP Law, provider of HR magazine’s HR Legal Service