The media has been awash with stories about ‘worker’ status recently. The most obvious being the recent Employment Tribunal decision that Addison Lee drivers are workers, not self-employed as the private hire taxi firm argued, and the similar decision against Uber a few months ago. The appeal for the Uber case was heard last week in the Employment Appeal Tribunal, albeit the decision will probably be announced in December.
So then, you may conclude, all taxi drivers are workers? No. Okay, so most of them are self-employed? No. Well, they must be full employees then? Not really.
To get into this, we should acknowledge one thing. The definition of “worker” in the Employment Rights Act 1996 is purposefully fuzzy. No, that’s not legal jargon, but an acknowledgement that the status is meant to catch those people who fall between the more obvious categories of employee and self-employed. Stereotypically-speaking, employees are those who work in an office on a rolling contract for a specified number of hours per week and self-employed individuals work for their own business and are ‘their own boss’. Now, in practice, it isn’t that simple, but let’s use those examples as vague signposts for now because, otherwise, I’ll need to name enough qualifications and exceptions to fill an employment textbook chapter!
So, ‘worker’ status is designed for those who aren’t ‘full’ employees or self-employed. But where is the line? Where does a ‘worker’ merge into an employee and when does a ‘worker’ get so far as to be effectively self-employed?
These are very good questions. In fact, they are such good questions that a lot of employers, including Uber, Addison Lee and Deliveroo, end up finding out at Employment Tribunal precisely because it is hard to specify otherwise.
This blog isn’t designed to provide a definitive answer. In theory, the answer is technically already present in the wording of the legislation itself – albeit, as with everything, it’s all about interpretation! However, as a wise man once said (Pablo Casals, in fact), ‘the art of interpretation is not to play what is written’. Pablo would have been a good lawyer…
Let’s have a peak at the legislation itself first. The Act in question is the Employment Rights Act 1996 (“ERA 1996”). This is the shining light of employment law – if in doubt, always check the ERA 1996! The relevant section of the Act in relation to employees and workers is at section 230 and, to paraphrase, it states that a ‘worker’:
‘means an individual who has entered into or works under:
(a) a Contract of Employment; or
(b) any other contract, whether express or implied, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.’
Put simply, and cutting through the legalese here, a ‘worker’ is an indiivdual who isn’t an employee under a (written or verbal) Contract of Employment affording them guaranteed rights and isn’t a self-employed individual working for their own business. Whilst this is the foundation for ‘worker’ status, it offers very little further detail on what a worker is. Albeit, just to muddy the waters further, other legislation (such as the Equality Act 2010) mentions ‘workers’ and this does include employees! We’ll leave that one for another blog post…
At present, the business model of some businesses works upon the premise that the individuals are ‘self-employed’. This may be the case even where the individuals concerned act in a similar way to workers (or employees). So what? Surely if the individual signs a contract agreeing that they are self-employed, specifically stating that they are not a worker or employee and specifically agreeing that nothing the employer does will give the legal impression that they are anything but a self-employed ‘contractor’ that is that? Nope.
Why not? A contract is a contract, right? Well, employment law takes a much less literal approach to employment-related contracts than commercial contracts. With a commercial agreement between two businesses, if one doesn’t meet the obligations, the other has the ability to sue them and either enforce its terms or claim damages. However, in employment-related situations, the Employment Tribunal has the ability to view the bargaining power of each party at the time of entering into the agreement first. The majority of the time, the employer is (rightly) seen to have more bargaining power in dictating the terms of the Contract and the job applicant or current employee is viewed as having limited power to amend it. Therefore, the Employment Tribunal steps in to ensure that the contract itself reflects the ‘reality’ of the working situation. Put simply, if they don’t believe a clause of the contract is correct and/or accurate, they won’t enforce it. Note that doesn’t mean Tribunals will target ‘unfair’ clauses, just inaccurate ones…
Now, this is where Uber came unstuck in their Employment Tribunal defeat. When I say defeat, I mean that Uber argued that their drivers weren’t ‘workers’ and the Employment Tribunal, in the strongest possible language, stated that they were. I read the Aslam and Farrar v Uber judgment in full, as I usually do with new judgments, and I remember finding it highly unusual for an Employment Law Judge to rip into a legal argument with such venom.
Perhaps it was understandable in the circumstances. After all, Uber’s basic argument was ‘we’re not a taxi company, we’re not a technology company’ and that Uber in London was ‘a mosaic of 30,000 small businesses linked by a common ‘platform’’.
The Employment Judge’s blunt responses included that Uber had resorted in its documentation to “fictions, twisted language and even brand new terminology”, which had to be treated with a “degree of scepticism”. Going further, the Judge singled out the loyal evidence of a senior Uber figure as reminding them “of Queen Gertrude’s most celebrated line: The lady doth protest too much, me thinks” and of Uber’s submission about each driver being an individual business as “faintly ridiculous”. Brutal.
Unsurprisingly, Uber applied to appeal the decision and permission was granted. However, in the meantime, a similar company, Addison Lee, had a comparable case heard in the Employment Tribunal. Now, Addison Lee are slightly different to Uber in that they are a ‘premier private hire and courier service for business and personal needs’ and are ‘more than a taxi’ (both quotes lifted from their website). How you can be ‘more than a taxi’, I don’t know… The core case against them was that their ‘self-employed’ drivers were actually ‘workers’.
The Employment Tribunal agreed with the drivers. It decided that the drivers were due to be paid for the periods of time they were logged into Addison Lee’s driver portal system and, on balance, were to be classified as ‘workers’ not self-employed. In this case, Addison Lee had a sizable amount of control over the drivers, in that the drivers rented and drove Addison Lee vehicles, drivers weren’t allowed to remove the logo from the car, drivers had to dress in a specified manner and had to follow a number of rules when logged into the driver portal system. Additionally, the recruitment process, requirement to use Addison Lee’s handheld XDA device (not their own phone) and the need to develop skills at their ‘Knowledge School’ all created an impression of sizable control and branding from a legal, and customer, point-of-view.
Put in simple terms, there was no real reason to regard the drivers as being self-employed other than the ‘self-employed’ clause in their contract which, when viewed in light of the real circumstances, didn’t reflect the reality of the drivers’ day-to-day experience with the Company.
If there is such uncertainty over worker status, why do employers continue to class individuals as self-employed? Well, mainly because it covers less in tax and, also, to avoid having to provide certain employment law rights (i.e. holiday pay, sickness pay, maternity leave, etc.)
Unfortunately, from the view of those employers with individuals in the ‘grey area’, if an Employment Tribunal faces a marginal call between an individual being a worker or self-employed (or between being an employee or worker), the presumption is that the individual has the higher protection with the onus then on the Company to prove otherwise.
Recently, the Conservative government commissioned the Taylor Review (otherwise known as the Good Work Review). It was 116 pages long and the majority was quite interesting and contained useful suggestions for future employment law reform, albeit I don’t recommend it as bedtime reading. Importantly, the Taylor Review had its own solution to this issue: replace the name ‘worker’ with ‘dependent contractor’. That’s it – literally just change the name of the second tier of employment status without changing anything else. Obviously, this isn’t a solution at all but akin to changing the name of Marathon bars to Snickers. So, it’s safe to say that this issue is here to stay for the foreseeable future.
Interestingly, Uber appear to have approached the appeal with a new strategy. Rather than continuing to focus on the submission that they are a ‘technology company’, not a transport company, they seem to be basing their revised (appeal) argument about the concept that they are acting as ‘agent’ for the individual drivers. I.e. that Uber are, in fact, acting no differently than a standard taxi company in that they take the booking, connect the hirers to the taxi drivers and provide directions. Whether this will be successful is another thing as direction changes of that magnitude rarely end well and, personally, I believe it is fairly clear that, in the majority of situations (which is as good as we’ll get in the circumstances), Uber drivers are ‘workers’ under existing case law.
So, what now? Well, Employment Tribunals will continue to hear cases bought by employees and will need to have a Company actively show them direct evidence that the individuals in question are either employees or self-employed to avoid them being labelled as a ‘worker’ and gaining various employment law rights. Those normally involves those individuals having a suitable degree of autonomy in how they perform their job in comparison with full employees and/or not appearing as an employee of the company to an outsider in comparison with genuinely self-employed workers.
Which employment rights do ‘workers’ qualify for? Well, that is a subject for another blog. No doubt that blog will come before the expected Uber appeal decision in December…