The 'Gig Economy' - Uber Appeal

welcome to this weapon are on employment status in the gig economy, part for the uber appeal. I'm Ben. Um, Anwar and I'm embarrassed her at the 36 group practicing in commercial and public law. Thanks so much for choosing this webinar. This continues on as part of Siris on the gig economy on in the last part, part three off its Siri's. I was talking about uber's employment tribunal case, which it lost on which may well affect the rights off around 40,000 off its drivers in this part part for I'm going to be looking at taking you through a uber's appeal toothy employment Appeal tribunal. Now, this is a very recent that recent because I actually observed part of the appeal hearing in the E 80 on live Tweeted province, and I've also blocked about it as well. So what we're going to learn about is what happened in the 80 a summary off the key arguments put forward by uber to try and overturn this landmark employment tribunal determination. We're going to think about how these arguments might fit in or might not fit in to the existing case law on employment status and worker status. And finally, consider some potential future developments effectively. What do I think of how what's going to happen with the uber appeal and with the courts approaches and judges approaches to the gig economy more generally. So to recap Uber lost in the employment tribunal in a claim brought by a handful off union back drivers who claimed basic employment rights, including the national minimum wage, holiday pay on protection for whistleblowers. And, of course, the main issue was whether or not the drivers were workers within Section 2 30 subsection three b off the Employment Rights Act. Now, if you've been following this Siri's, he won't need me to be repeating that definition again. I'll leave you to go back and explore the materials in the previous parts if you need a refresher. So on the 27th and 28th off September 2017 Uber's appeal was heard in the Employment Appeal Tribunal at the time off recording this, the E 80 is still deliberating on its judgment. It's unclear when that judgment will become available, and when it does, you will probably be hearing from me and a further update webinar uh, analyzing that decision. So all we can do at this stage is really explore what was said on what was argued before the E 80. It was her honor Judge E. D. Sitting in the E 80 one of the full time judges off fat jurisdiction. So the main arguments that were being put forward by uber were to some extent familiar from its employment tribunal hearing. Although they were represented by a different council, the company continued to argue that there was no personal contract in place between uber and its drivers. Effectually what they were trying to say. Waas that there simply is no contract or the only contract jewel document that exists between driver and uber is one that creates a relationship off agency and not a relationship off worker and employer. So their attack was mainly focused on trying to dislodge this notion that the arrangement that uber has between it and its drivers puts any obligation on drivers to actually perform any work. The factual basis off this argument was that the uber app doesn't actually require these drivers to do any work, what so ever they have total flexibility and total control, as do many other operatives working in the gig economy over their hours of work and over how frequently they lock in or lockout. A failure by a driver to log in for a certain number of days doesn't actually lead toe any adverse consequences. They won't be punished. There won't be treated less favourably. There won't be paid less. It is their prerogative, and so that total flexibility can only in the eyes of uber be inconsistent with a personal obligation toe work. And it's precisely precisely that personal obligation toe work, which is a requirement of the definition in Section 2 30 subsection three b. And so, in a way, it's a rerun off the argument before that, the employment tribunal, although with a renewed emphasis of renewed attack, really on the existence off a contract for services now. In support of this argument, the boobs Council was expectedly drawing on the law off agency, and it was arguing that effectively in the field off tax and V a T law, it's very well established and commonly acknowledged by the tax tribunal that traditional minicab firms operate as agents on behalf off their drivers. They don't act as principles, and so therefore that has various implications for their liability for the 80. So there was quite a lot of time taken up actually, during the appeal hearing, going through various notable decisions off the of the tax tribunal in order to extract an idea or principal from that jurisdiction and transpose it into employment law that this established model or mini cab operators who have a fleet off drivers who are all self employed. It's not something that's controversial or not, something that is some way fails to reflect reality. It's actually an established business model, and uber is no different. So already one convey begin to see that there's perhaps some tension between those two arguments. On the one hand, here is this online platform that doesn't oblige anybody toe work. That is an entirely new business model of vast scale Andi, which is innovating through new contractual models that allow people to clock in and clock out whenever they choose and doesn't create any traditional employment law obligations. And then, on the other hand, we've got a company that wants to present itself or wants toe bring itself within a well established traditional minicab model, so it is difficult to see how those two arguments can exist comfortably together. But the way in which it was presented to the Employment Appeal tribunal is that the only innovation that uber has presented is one of scale. It's nothing to do with the particular the mechanics of how it operates and operates, just like a minicab firm using new technology to do so. And it's doing so out of our scale. That's the only difference between them. And so essentially. Hoover was saying that it had been unfairly criticized by the employment tribunal, and its contract had Bean unjustly disregarded and their effects sidelined by the employment tribunal because the tribunal was simply not inclined Teoh or not supportive off the scale off Uber's operations, Uber also tried to distance itself from one of its competitive firms. Addison Lee. Absently has also Bean in the employment tribunal, and in fact, a judgment was given against Addison Lee on the 25th off September. So a two days prior to a uber's appeal in a very, very similar case, absolutely. Drivers had brought claims for basic employment rights, claiming that they were workers on the employment tribunal agreed for reasons which I'm going to explore with you in the next part off this webinar Siri's, which will focus on the absently tribunal cases. So you ever had to try to deal with this or at least chose to try and deal with this during the appeal by distinguishing its operations from Addison Lee's. So the difference is that uber drawer drew upon in terms off how it treated its drivers and how Addison Lee treats its drivers were, for instance, the fact that with Addison Lee, the vehicles are branded, so they're very clearly featuring the company logo. Uber doesn't take that approach. In fact, uber simply requests that its drivers drive dark colored vehicle or silver colored vehicle, and it instructs the drivers not to display the uber logo, or at least in London. It does so Thea. Other differences include the fact that rather than allowing its drivers to work whenever they choose to, Addison Lee required the drivers to log on on to be performing a certain number of hours. In effect, where is uber has a different arrangement, which is much more flexible, as I was saying earlier. Other differences include the fact that the drivers were punished and sanctioned by Addison Lee for failing to log on. If they didn't log on for a certain amount of time, then there would be supervisory measures that would be taken. The matter will be looked into and effectively. There was pressure on the drivers, too, looking on a regular basis, Andi. Further difference is the fact that the drivers, for absently least their vehicles from companies related to Addison Lee, whereas a uber drivers don't who doesn't provide the vehicles that doesn't lease out vehicles. Nor do any companies associated with uber do that. So, in fact, I gather that the reality for many uber drivers is that they are. They are taking cars on credit hire agreements, but from companies that is separate from uber. And so we'll be looking in more depth at the Addison Lee decision in the next webinar in this Siri's. But it was interesting to see the company secrets uber trying to distinguish itself from a rival which also uses a an online app to communicate and coordinate with its drivers. So moving on to another set of arguments presented by uber, I mentioned already that Uber presents itself as an agent within its contract between uber and its drivers and what we were doing in the its appeal was drawing on a case law recent case law from the Supreme Court in the law off agency and its basic point was that the tribunal has misunderstood the operations off the law of agency. To illustrate this, it relied upon the decision in the case off revenue and customs commissioners versus secret hotels. Too limited on this is a 2014 case. Full citation is in the reference sheet, but in essence this. This is a case which concerned a hotel booking company. So one of these online companies that allows people to go on there to look at various hotels abroad or in the UK on and to book those hotel rooms in from of selection of hotels via that website and you probably think of many similar websites in the travel sector or any other services sector. It's a very common thing to have these sorts of Internet platform companies. The dispute in secret hotels to limited was that the HMRC was basically saying that secret hotels was trading as a principal, so trying to argue that this was not the company that was simply marketing on behalf of hotels across the globe. It was actually a company that was buying hotel rooms on selling them to customers. Eso a kind of a marketplace rather than an agent Onda. Of course, this would have tax implications if the company was found to be trading as a principle that it will be liable for that that if it was found to be trading as an agent, then it would be able to escape the V a. T. The conclusion of the UK Supreme Court was that this company, this online trading platform waas trading as an agent Andi. In order to get to that conclusion, it rejected a number of arguments by HMRC. Hmrc was saying, Look at the website terms and conditions. This is a company that, for instance, if someone books on and has to cancel at the last minute, there's a cancellation fee. This is a company that levees an administration charge on all bookings. So is profiting from that booking process, and it's also a company that, in its offer to its customers, says that if at the end of the day the hotel lets you down, we will try our best to find you an alternative form of accommodation nearby. And all of these things, HMRC was saying, suggests that this is a company that was actually trading as a principle and not just an agent on behalf off the hotels. The Supreme Court rejected these arguments and found that actually, there's nothing inconsistent with acting as an agent in relation to those terms. So, for instance, with the cancellation and the administration charges that those were essentially a partof part in parcel or its business and also reflected the inequality of bargaining power. But between the website on those it dealt with in relation to the cancellation fees in relation also to Theo, the offer of alternative accommodation that offer was effectively away or protecting the brands off the hotel of the website. It was a way off, ensuring that there was goodwill between its customers. Andi don't be online platform and none of those things are inconsistent with acting as an agent. Taking these arguments into the uber appeal, Uber was saying that by analogy where the employment Tribunal had found that, for instance, the driver rating system but it operates was indicative off an employer worker arrangement, it said. Well, actually, no. That's to do with us protecting our brand and protecting our goodwill in the same way that secret hotels would do so with its online platform. And so in that way, the tribunal have misunderstood agency law, even though Pats wasn't explained in that way before the tribunal. So a further interesting point, which arose during the course of the appeal, was this idea that regulate ary law factors should no way against uber should not be considered against an employer. And let me explain this for a moment. There are various things that uber has to do because off the regulator legal framework that surrounds private hire vehicles in London there's a There's an act which governs this area on, for instance, it has to take bookings on behalf of the drivers. It has to operate a complaint system in order to operate with, with a private hire licence itself a knish You, which transport for London, has recently waded into with its replication of boobs license, and there's a further appeal against that, and we'll be watching this space to see what happens. But who resigned? What was that? These factors the things that uber has to do because of regulatory law shouldn't count against it. If anything, these factors should be neutral when a tribunal is assessing whether a person is a worker or not. Now, one of the very few interventions that was made by her honor Judge Eady during the appeal hearing related to this very point on it emerged from the discussion that there isn't really any clear authority or any click case law on what a tribunal should do with regulator re factors. It will be interesting to see which way this point goes, if only to clarify the correct approach in this area off law in the gig economy on beyond it, because it's never being decided before. My personal view is that there's there's no principle that should prevent a judge from considering these circumstances as relevant factors under the test, nothing in the statutory definition of water worker is suggests otherwise, Andi. There's no other wider principle within contract law which should prevent a judge from considering those factors. If it's something that a company has to do because of regulatory requirements, it's still nevertheless something that that influences impinges upon the relationship off employer on potential worker. So there were a few other challenges that emerged from Cooper's appeal challenges to the tribunal's conclusion that one of the requirements for uber drivers to come within worker status is that they have to be able and willing to work. Uber attacked that finding as being fundamentally impossible. The company can't deter being whether a driver is subjectively willing to work or not on that factor would throw a spanner in the works off calculating things like the national minimum wage and holiday entitlement. I think there are legitimate practical issues there, but I I'm slightly doubtful as to the extent to which the tribunal will be troubled by that, particularly given the tribunal's approach in the Addison Lee case, which I'll be discussing in the next part. Finally, the drivers, obviously through their counsel on the second day off the appeal hearing, were arguing that the employment tribunal was entirely justified in coming to its conclusions on drew attention to the absence of any written consent from the drivers that you should should act as their agent in relation to the customers. It was also argued that the tribunal was entirely justified in concluding from all the circumstances looking outside of the contract, that the drivers were under a personal obligation toe work for uber and to find that it would be virtually impossible for the drivers to enforce a a separate contract against the riders. The contract was between Uber and its drivers and obliged the drivers to work for it. So, looking ahead, the Employment Appeal tribunal needs to decide this appeal. Uber have made it clear at the hearing that it's likely to ask for what's known as a leap frog appeal. If the appeal doesn't go its way, it wants to go straight to the UK Supreme Court, and this could be something of a crossroads. Really, because looking ahead or at least looking ahead at the time of recording this, the case of Pimlico Plumbers, which I was talking to you about in a part two of this Siri's is due to go to the UK Supreme Court on the 20th and 21st of February 2018. So the gig economy in relation to employment always coming to something of a legal moment in which we hope that it will be clarified by the UK Supreme Court what is the right approach? But we will see these cases are all of them very fact sensitive, and any guidance is really got to be quite high level. But what will be interesting is to see how any higher court, whether it's the 80 the Court of Appeal or the UK Supreme Court approach uber as an online digital platform with this highly flexible approach toe, when important when its drivers clock in and clock out. And what that means for the mechanics of working out how the national woman minimum wage or to be applied in calculated on how holiday pay entitlement ought to be calculated. Thank you very much for listening. We've gone slightly over time, but I hope that you've enjoyed it. Andi got some value from what I saw at the Employment Appeal Tribunal. I'm Veneman War on This is being the webinar Siris on the economy. Do do you join me next time for a review off the Addison Lee litigations? Thanks again. Take care