LECTURE 3 - THE RISE OF ‘ATYPICAL WORK’
AND THE CHALLENGE TO THE ‘BINARY
DIVIDE’
Introduction
‘Imagine the following case: three nurses with similar qualifications
who work the same shifts together on a hospital ward discover that
they receive different pay and other benefits and that they enjoy
different measures of legal rights. The differences result from the
separate identity of their employers. One nurse is employed by the
hospital trust that operates the hospital as a whole, another is
supplied by a private sector employment agency, and the third by a
public sector nurses’ bank for casual work. Each employer has
offered different terms for what is essentially the same work. Is
there anything wrong with that?’
H Collins, ‘Multi-segmented workforces: Comparative
fairness, and the capital boundary obstacle’ in G. Davidov & B.
Langille, Boundaries and Frontiers of Labour Law (Hart, 2006)
This lecture will focus on the growth and legal regulation of new forms of work, in
particular forms of work that we associate with the growth of the so called ‘gig-
economy’. What is meant by non-standard and gig-work and why has its use
increased? What is the attraction of gig-work to employers or enterprises? How
should such work be regulated? Can labour law cope with the growing diversity
of the workforce? Is the ‘worker’ concept apt to do that? Is work in the gig-
economy a result of fundamental economic changes. Or is it really labour law
(both as produced by Parliament and as interpreted in the Courts) that has
produced or facilitated it in the first place? You are kindly asked to familiarise
yourself with the recent SC decision in Uber.
We will focus on four main issues
Readings
Uber v Aslam [2021] UKSC 5
The Supreme Court has handed down Judgment in the long awaited appeal in
Uber BV v Aslam and others [2021] UKSC 5, upholding the first instance decision
that the drivers were workers, within the extended “Limb B” definition under the
Employment Rights Act 1996 (ERA), National Minimum Wage Act 1998 (NMWA)
and Working Time Regulations 1998 (WTR).
,The decision of the Supreme Court reasserts and extends the approach taken in
Autoclenz and makes clear that the focus in determining worker status is on the
true nature of the relationship between the putative worker and the putative
employer. Critically the question is whether it is truly a relationship that is within
the scope of the protection of the relevant statutory regime. In conducting that
analysis the written terms of the contract are not the starting point.
The appeal has tracked its path through the EAT, Court of Appeal and eventually
the Supreme Court from the original ET hearing. The practical issue, as no doubt
will be played out in the media, will be that Uber’s precise contractual
arrangements with its drivers will have changed over the period it has taken for
the case to travel up through the appellate courts. As a result the contractual
position, as it stands today, may be argued to have changed such the Supreme
Court decision does not govern Uber’s present arrangements.
Nonetheless, the decision has important repercussions for modern employment
law and the breadth of the approach relegates the status of written contractual
terms and thus any attempt by “armies of lawyers” to seek to reclassify a
relationship as not being that of employer and worker. The decision then has
wide ramifications even beyond the field of platform based working
arrangements.
Platform arrangements were at the heart of Uber’s arguments that the
contractual relationship was truly a direct one between the driver and the
“rider”, i.e. the passenger. As a matter of agency it was argued that there was
no contract between the driver and licensed private hire vehicle operator: Uber
London. Lord Leggatt, giving the Judgment of the entire Supreme Court,
dismissed that argument head on. The Supreme Court focused on the
relationship between Uber London and the “riders” because for regulatory
reasons Uber London held the private hire licence. The drivers had a written
contractual relationship with Uber UV the Dutch based operating company. As a
matter of agency law the Supreme Court concluded that when Uber London
accepted a booking from a “rider” they did not do so as agent, so as to create a
contract between the “rider” and the driver, but as principal. It followed that
Uber London contracted directly with the “rider”. Logically it followed that Uber
London could only operate as a business by entering into contracts with the
drivers to carry out the journeys, even on a per trip basis. That fatally
undermined the basic agency argument of Uber. But the Supreme Court also
proceeded to address the wider arguments advanced by Uber, which had
focused on the approach in Autoclenz and how that decision should be properly
understood. Uber sought to argue that the written contractual terms had to be
the starting point in defining the relationship between the parties and that
Autoclenz should not be read as intending to change that starting point.
Critically the Supreme Court approached the interpretation of the earlier decision
in Autoclenz on the basis that it was concerned with the application of statutory
of protections which had the objective of protecting “workers”. In that context
Lord Leggatt observed the exercise was one of statutory interpretation and not
contractual interpretation. The question was whether the putative worker fell
within the definition of those protected by the legislation citing Lord Reed in UBS
AG v Revenue and Customs Comrs [2016] UKSC 13:
“The ultimate question is whether the relevant statutory provisions, construed
purposively, were intended to apply to the transaction, viewed realistically.”
, It is anticipated that this citation will appear in many future status cases. Thus
the focus becomes the purpose of the legislation in question (here the ERA, WTR
and NMWA) which was the protection of workers. Having analysed the purpose
of the relevant legislation Lord Leggatt observed:
“Once this is recognised, it can immediately be seen that it would be
inconsistent with the purpose of this legislation to treat the terms of a written
contract as the starting point in determining whether an individual falls within
the definition of a “worker”. To do so would reinstate the mischief which the
legislation was enacted to prevent. It is the very fact that an employer is often in
a position to dictate such contract terms and that the individual performing the
work has little or no ability to influence those terms that gives rise to the need
for statutory protection in the first place. The efficacy of such protection would
be seriously undermined if the putative employer could by the way in which the
relationship is characterised in the written contract determine, even prima facie,
whether or not the other party is to be classified as a worker. Laws such as the
National Minimum Wage Act were manifestly enacted to protect those whom
Parliament considers to be in need of protection and not just those who are
designated by their employer as qualifying for it.”
Thus the “armies of lawyers” could not define the contractual relationship so as
to defeat the purpose of the legislation. The Supreme Court additionally relied
upon the anti-contracting out provisions within the relevant statutes, ERA, NMWA
and WTR.
The written contract is not then the beginning and the end of the analysis in
defining the relationship, even if the contact contains a clause stating that it is
intended to record the entire agreement of the parties. Lord Leggatt did observe
that this did not mean that:
“the terms of any written agreement should be ignored. The conduct of the
parties and other evidence may show that the written terms were in fact
understood and agreed to be a record, possibly an exclusive record, of the
parties’ rights and obligations towards each other. But there is no legal
presumption that a contractual document contains the whole of the parties’
agreement and no absolute rule that terms set out in a contractual document
represent the parties’ true agreement just because an individual has signed it.
Furthermore, as discussed, any terms which purport to classify the parties’ legal
relationship or to exclude or limit statutory protections by preventing the
contract from being interpreted as a contract of employment or other worker’s
contract are of no effect and must be disregarded.”
The Tribunal was entitled to look at the reality of the working arrangements. In
doing so the focus was on the degree of control exercised by the putative
employer over the work or services performed by the individual concerned. The
greater the extent of such control, the stronger the case for classifying the
individual as a “worker” who is employed under a “worker’s contract”.
On that analysis the Tribunal were entitled to look at the reality of the
arrangements between Uber London and the drivers and to find that the degree
of control was sufficient to conclude that although the drivers were free to
choose when and where they worked it was the case that, at times when they
were working drivers, they were in fact workers for and under contracts with
AND THE CHALLENGE TO THE ‘BINARY
DIVIDE’
Introduction
‘Imagine the following case: three nurses with similar qualifications
who work the same shifts together on a hospital ward discover that
they receive different pay and other benefits and that they enjoy
different measures of legal rights. The differences result from the
separate identity of their employers. One nurse is employed by the
hospital trust that operates the hospital as a whole, another is
supplied by a private sector employment agency, and the third by a
public sector nurses’ bank for casual work. Each employer has
offered different terms for what is essentially the same work. Is
there anything wrong with that?’
H Collins, ‘Multi-segmented workforces: Comparative
fairness, and the capital boundary obstacle’ in G. Davidov & B.
Langille, Boundaries and Frontiers of Labour Law (Hart, 2006)
This lecture will focus on the growth and legal regulation of new forms of work, in
particular forms of work that we associate with the growth of the so called ‘gig-
economy’. What is meant by non-standard and gig-work and why has its use
increased? What is the attraction of gig-work to employers or enterprises? How
should such work be regulated? Can labour law cope with the growing diversity
of the workforce? Is the ‘worker’ concept apt to do that? Is work in the gig-
economy a result of fundamental economic changes. Or is it really labour law
(both as produced by Parliament and as interpreted in the Courts) that has
produced or facilitated it in the first place? You are kindly asked to familiarise
yourself with the recent SC decision in Uber.
We will focus on four main issues
Readings
Uber v Aslam [2021] UKSC 5
The Supreme Court has handed down Judgment in the long awaited appeal in
Uber BV v Aslam and others [2021] UKSC 5, upholding the first instance decision
that the drivers were workers, within the extended “Limb B” definition under the
Employment Rights Act 1996 (ERA), National Minimum Wage Act 1998 (NMWA)
and Working Time Regulations 1998 (WTR).
,The decision of the Supreme Court reasserts and extends the approach taken in
Autoclenz and makes clear that the focus in determining worker status is on the
true nature of the relationship between the putative worker and the putative
employer. Critically the question is whether it is truly a relationship that is within
the scope of the protection of the relevant statutory regime. In conducting that
analysis the written terms of the contract are not the starting point.
The appeal has tracked its path through the EAT, Court of Appeal and eventually
the Supreme Court from the original ET hearing. The practical issue, as no doubt
will be played out in the media, will be that Uber’s precise contractual
arrangements with its drivers will have changed over the period it has taken for
the case to travel up through the appellate courts. As a result the contractual
position, as it stands today, may be argued to have changed such the Supreme
Court decision does not govern Uber’s present arrangements.
Nonetheless, the decision has important repercussions for modern employment
law and the breadth of the approach relegates the status of written contractual
terms and thus any attempt by “armies of lawyers” to seek to reclassify a
relationship as not being that of employer and worker. The decision then has
wide ramifications even beyond the field of platform based working
arrangements.
Platform arrangements were at the heart of Uber’s arguments that the
contractual relationship was truly a direct one between the driver and the
“rider”, i.e. the passenger. As a matter of agency it was argued that there was
no contract between the driver and licensed private hire vehicle operator: Uber
London. Lord Leggatt, giving the Judgment of the entire Supreme Court,
dismissed that argument head on. The Supreme Court focused on the
relationship between Uber London and the “riders” because for regulatory
reasons Uber London held the private hire licence. The drivers had a written
contractual relationship with Uber UV the Dutch based operating company. As a
matter of agency law the Supreme Court concluded that when Uber London
accepted a booking from a “rider” they did not do so as agent, so as to create a
contract between the “rider” and the driver, but as principal. It followed that
Uber London contracted directly with the “rider”. Logically it followed that Uber
London could only operate as a business by entering into contracts with the
drivers to carry out the journeys, even on a per trip basis. That fatally
undermined the basic agency argument of Uber. But the Supreme Court also
proceeded to address the wider arguments advanced by Uber, which had
focused on the approach in Autoclenz and how that decision should be properly
understood. Uber sought to argue that the written contractual terms had to be
the starting point in defining the relationship between the parties and that
Autoclenz should not be read as intending to change that starting point.
Critically the Supreme Court approached the interpretation of the earlier decision
in Autoclenz on the basis that it was concerned with the application of statutory
of protections which had the objective of protecting “workers”. In that context
Lord Leggatt observed the exercise was one of statutory interpretation and not
contractual interpretation. The question was whether the putative worker fell
within the definition of those protected by the legislation citing Lord Reed in UBS
AG v Revenue and Customs Comrs [2016] UKSC 13:
“The ultimate question is whether the relevant statutory provisions, construed
purposively, were intended to apply to the transaction, viewed realistically.”
, It is anticipated that this citation will appear in many future status cases. Thus
the focus becomes the purpose of the legislation in question (here the ERA, WTR
and NMWA) which was the protection of workers. Having analysed the purpose
of the relevant legislation Lord Leggatt observed:
“Once this is recognised, it can immediately be seen that it would be
inconsistent with the purpose of this legislation to treat the terms of a written
contract as the starting point in determining whether an individual falls within
the definition of a “worker”. To do so would reinstate the mischief which the
legislation was enacted to prevent. It is the very fact that an employer is often in
a position to dictate such contract terms and that the individual performing the
work has little or no ability to influence those terms that gives rise to the need
for statutory protection in the first place. The efficacy of such protection would
be seriously undermined if the putative employer could by the way in which the
relationship is characterised in the written contract determine, even prima facie,
whether or not the other party is to be classified as a worker. Laws such as the
National Minimum Wage Act were manifestly enacted to protect those whom
Parliament considers to be in need of protection and not just those who are
designated by their employer as qualifying for it.”
Thus the “armies of lawyers” could not define the contractual relationship so as
to defeat the purpose of the legislation. The Supreme Court additionally relied
upon the anti-contracting out provisions within the relevant statutes, ERA, NMWA
and WTR.
The written contract is not then the beginning and the end of the analysis in
defining the relationship, even if the contact contains a clause stating that it is
intended to record the entire agreement of the parties. Lord Leggatt did observe
that this did not mean that:
“the terms of any written agreement should be ignored. The conduct of the
parties and other evidence may show that the written terms were in fact
understood and agreed to be a record, possibly an exclusive record, of the
parties’ rights and obligations towards each other. But there is no legal
presumption that a contractual document contains the whole of the parties’
agreement and no absolute rule that terms set out in a contractual document
represent the parties’ true agreement just because an individual has signed it.
Furthermore, as discussed, any terms which purport to classify the parties’ legal
relationship or to exclude or limit statutory protections by preventing the
contract from being interpreted as a contract of employment or other worker’s
contract are of no effect and must be disregarded.”
The Tribunal was entitled to look at the reality of the working arrangements. In
doing so the focus was on the degree of control exercised by the putative
employer over the work or services performed by the individual concerned. The
greater the extent of such control, the stronger the case for classifying the
individual as a “worker” who is employed under a “worker’s contract”.
On that analysis the Tribunal were entitled to look at the reality of the
arrangements between Uber London and the drivers and to find that the degree
of control was sufficient to conclude that although the drivers were free to
choose when and where they worked it was the case that, at times when they
were working drivers, they were in fact workers for and under contracts with
