New employment status would give some protection to those working in ‘gig economy’

Technological advances have led to the emergence of the so-called ‘gig economy’ – an environment in which temporary positions are the norm and organisations contract with individuals, usually via apps, for short-term engagements.

Does this modern business phenomenon unleash innovation into the market place or reduce employment rights?

Uber

Working in the gig economy involves being hired by a company on a job-by-job basis and often being subject to similar rules to that of an employee, without any of the job security.

Many were unaware of this new phrase until the landmark ruling in a recent UK Employment Tribunal decision, Aslam, Farrar and Others v Uber.

At the centre of this case was the question of whether Uber controls and subordinates its drivers to an extent that makes them ‘workers’.

James Farrar, an Irish man, was one of the two claimants in the significant legal victory. He described working for Uber as “brutal” and alleged that if something went wrong, he was very much on his own.

Uber argued that it was not a transport business but a platform to connect passengers with drivers. It described itself as “a mosaic of 30,000 small businesses linked by a common platform”, a description the tribunal rejected as “faintly ridiculous”.

Uber drivers are confined to strict terms and conditions and, if they fail to comply in time, they will find themselves timed out of the app.

Drivers can be “removed from the platform” for low passenger rides or low passenger ratings and the penalties are communicated to them via their smartphones. The ultimate penalty is “deactivation”. Furthermore, drivers cannot set their fares, nor are they allowed to contact passengers directly.

The ‘worker’ status sits inbetween an employee and an independent contract (the concept does not yet exist in Ireland). It was held that the two drivers were ‘workers’ and, therefore, under the Employment Rights Act 1996 they are entitled to rights such as pension contributions, minimum wage, paid annual leave and rest breaks.

This decision was based on the fact drivers “do not and cannot negotiate with passengers” and they are “offered and accept trips based on Uber’s strict terms”. This decision leaves Uber exposed to claims from its 40,000 drivers in the UK and it is planning an appeal.

CitySprint

A similar result arose in a further UK ruling concerning a bike courier for CitySprint.

Maggie Dewhurst cycled up to 75km a day making deliveries in London. She told the tribunal she feared her work would deplete if she “didn’t do as she was told”.

The tribunal found Ms Dewhurst was a ‘worker’ rather than self-employed.

The British government has responded by commissioning a review of modern working practices, while the European Parliament has voted to back a report calling for better worker protections in the gig economy. Although this isn’t binding, it does present a real threat to companies such as Uber.

However, not all gig-economy workers are unhappy. Those who benefit most are those who do not rely on this work as their primary source of income.

Ireland

So what does this mean for Ireland?

The decisions are unlikely to affect those working in the taxi industry, as current Government policy restricts apps like Uber contacting anyone other than registered taxi drivers and chauffeur-driven cars.

However, it may affect other companies such as Deliveroo (an app which delivers restaurant food straight to your door) and, currently, a UK union is pushing for a pay deal for its Deliveroo ‘riders’.

Unlike the UK, Ireland has only two categories of employment status: independent contractors and employees. Other countries such as Germany, Canada, France and Italy have all introduced a similar third category of ‘worker’.

If Ireland was to introduce this hybrid status it could afford those working in the gig-economy some protection. There would need to be clear guidance in order for someone to be considered a ‘worker’.

Source:

Irish Independent – 301th Jan 2017

Author:

Catherine O’Flynn is a partner in William Fry’s employment and benefits department