The negative press around gig economy working has been prevalent over the past few months. Below, we take a look at the most significant developments in case law, including some innovative attempts by one trade union to achieve prompt and cost-effective resolution for its prospective members.

In Aslam and others v. Uber BV and others ET/2202550/15 the Tribunal (at a preliminary hearing stage) found that Uber's drivers were workers for the purposes of bringing claims for unlawful deductions (failure to pay National Minimum Wage) and failure to give paid leave in accordance with rights granted under the Working Time Regulations. The organisation, which enables consumers to order taxis via a smartphone app, built its employment model around individuals being self-employed and, as such, not accruing key employment law rights.

There were some factors that were consistent with self-employed status. Drivers supplied their own vehicles and were responsible for upkeep, running costs and private licences. They were not required to make any commitment to work, but were considered on duty when they logged onto the app. If a job was available, they had 10 seconds to accept the job, before it moved on to locating another driver.

However, there were also some factors pointing to worker status, with a level of integration and control by Uber. If drivers continually missed jobs they would receive warnings which could ultimately result in their access to the app being suspended or blocked. They did not have complete access to customer details. Uber could withdraw use of the app for drivers rated poorly. Drivers were not aware of the final destinations until collecting a passenger and all directions were supplied by the smartphone app. Uber took some risk, for example, with regard to fraud by passengers.

In this case the Tribunal was seemingly influenced by the scale of Uber's operation, saying that it was an unbelievable notion that London could be covered by a mosaic of 30,000 small businesses linked by common practices. They said that it was unreal to deny that the individuals were suppliers of transfer services. It was not believable that Uber was working for the drivers. In so far as there was a contract between drivers and passengers, there was no ability for any real bargaining. As a result, the individuals were workers as long as the app was turned on, they were ready and willing to accept fares and in a territory where they were authorised to drive. Whilst the assessment for the claim under the Working Time Regulations was different, the outcome was the same.

Hot on the heels of the above claim was a claim by a CitySprint cycle courier (Dewhurst v. CitySprint UK Ltd ET/2202512/16) for holiday pay under the Employment Rights Act. In that case, individuals were required to enter into a "tender to supply services" and then electronically supply terms including terms which stated that:

  • there was no obligation on CitySprint to provide work;
  • substitution was permitted (although it did not occur in practice);
  • no pay would be received when the individuals did not work;
  • individuals were not entitled to holiday pay, maternity pay, or sick pay; and
  • self-billing and invoicing system would be required for payment (although in practice CitySprint calculated what was due and paid the couriers after deductions).

In a similar way to the app used in the Uber case, couriers were directed via a centralised service. However, unlike in the Uber claim, drivers wore a uniform. CitySprint told them to smile, as part of a professional service.

Relying on the previous claim of Autoclenz v. Belcher and others [2011] IRLR 820, the Tribunal found that the words "confirmation of tender" were not enough. They did not reflect the true relationship between the parties. The Tribunal found that in practice, the Claimant had little autonomy to determine the manner in which services were performed and that she had been integrated into CitySprint's organisation. Accordingly, she was a worker at the times she was logged onto the tracking system.

While these are first instance decisions, they display an interesting appetite to protect against the mis-use of a self-employed status to prevent individuals who are truly workers from gaining certain employment law rights. While, in the case of Deliveroo, one trade union (Independent Workers Union of Great Britain), following a historic precedent, was innovative in asking the Central Arbitration Committee to make a decision on worker status in an application for recognition (which if decided in the union's favour would result in a non-binding but persuasive decision which could be used for negotiation, or in any employment tribunal claim), there does not appear to be too much of an appetite among the trade unions for any mass action. This may be influenced by the fact that there may be more valuable claims to pursue on a collective basis; in the case of CitySprint the claim was only worth two days of holiday pay.

Wholesale reform is unlikely to result from the above cases, or from those of a similar nature which are pending. It is much more likely to inform legislative change. The following dates are indicative that key bodies have this issue firmly in their sights, even if no firm proposals have been issued yet:

  • 26 October 2016 BEIS Committee launched inquiry into future world of work, including looking at gig economy. The deadline for written submissions was 19 December 2016;
  • 30 November 2016 BEIS launched Independent Review of Employment Practices in the Modern Economy. The outcome will inform government's strategy (expected to last six months);
  • 1 December 2016 Work and Pensions Committee inquiry to consider whether the UK welfare system adequately supports the growing number of self-employed and gig economy workers. The deadline for written submissions was 16 January 2017; and
  • 2 December 2016 Office of Tax Simplification (OTS) published a focus on exploring tax issues and implications of the gig economy.

One approach that affected companies may take is to pacify staff with some small concessions and resist any more substantial changes (unless and until legally required) and sensibly use the time to plan how best to re-work their employment model. If they are unable to do this, the obvious impact is that these organisations will have to pass their cost increases on to their customers, making them much less competitive in the market.