gig economy

HPC Law: The Gig Economy

The Gig Economy

The Employment Appeal Tribunal this month upheld a decision last year that ruled two Uber taxi drivers were workers rather than self-employed.


The two drivers, James Farrar and Yaseen Aslam, won a case last year after arguing they were workers and entitled to the minimum wage, sick pay, paid holiday and breaks.


Uber claimed the ruling could deprive drivers of the “personal flexibility they value” but lost its appeal at the Employment Appeal Tribunal in London.


That the Appeal Tribunal ruled in this way means that Uber could now face a flood of backdated claims. It says it plans to appeal the decision.


It had been felt the ruling would also have significant implications across the so called ‘gig economy’.


The tribunal said any Uber drivers who had the Uber app switched on, operated under a ‘worker’ contract and was therefore entitled to workers’ rights.


While business such as Uber wish to maintain the flexibility which sets it apart from more traditional private transport sects, this does not give them carte blanche to ignore worker’s rights and follow employment practices. Uber will therefore have to adjust its business model and modify the relationship with drivers to help it avoid worker status in future.


Meanwhile, a case brought by the Independent Workers Union of Great Britain (IWGB) on behalf of couriers in the Camden and Kentish Town districts of north London however, meant it was not all bad news for the gig economy.


Around this time, Deliveroo won a landmark case that means it does not have to give its riders holiday pay or the minimum wage.


The Central Arbitration Committee which is a labour-law body, ruled the delivery company couriers were self-employed and not, crucially, workers, in the eyes of employment law.


Further, the committee found the riders were self-employed contractors because of their freedom to “substitute” – allowing other riders to take their place on a job.


The CAC ruling states:

“The central and insuperable difficulty for the union is that we find that the substitution right to be genuine, in the sense that Deliveroo have decided in the new contract that riders have a right to substitute themselves both before and after they have accepted a particular job; and we have also heard evidence, that we accepted, of it being operated in practice.”


However, it did add:

“There are clearly concerns about the precarious nature of the work and the wider debate around the gig economy.”


CAC said its finding on the substitute aspect of the relationship between Deliveroo and its riders was “fatal to the union’s claim”.


Deliveroo in the UK and Ireland, hailed the decision as a victory for all riders advocate the flexibility as being the biggest factor for working with Deliveroo.


Meanwhile, the IWGB said it was considering its next move but added the ruling did show Deliveroo riders remained dissatisfied with their current terms and conditions and wanted worker rights, including holiday pay and the minimum wage.


The two cases follows are the latest in a line of claims brought by unions and workers in the gig economy seeking clarification on or definitive answers on employment rights, with many more set to follow in what is a developing area of law.


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