In all the excitement which December brought, businesses could be forgiven for failing to notice that it was a significant month for the modern world of work.

It saw the Government reveal its Good Work Plan, on which we recently reported here, but there were also two relevant court judgments.

Deliveroo

First, the High Court rejected an application from the Independent Workers Union of Great Britain, which challenged the Central Arbitration Committee’s finding that Deliveroo couriers were not workers (on the grounds they could engage substitutes to do their work for them). This is the only significant case to date which has gone against the prevailing trend that individuals in the gig economy have worker status.

Uber

Second, the Court of Appeal upheld the Employment Appeal Tribunal’s decision that Uber drivers were workers. Specifically, the Court confirmed these drivers are entitled to the rights which come with worker status, in particular the right to paid holiday and the minimum wage.

The Court relied on the law established by the Supreme Court in the Autoclenz case. This found that if written documentation does not reflect the real relationship between the parties, their actual agreement should be determined by the court or tribunal looking at all the circumstances (of which the written agreement is only a part).

Reality matters

It emphasised this approach was appropriate when the document signed by the individual contains standard and non-negotiable terms and puts them in a position of unequal bargaining power. It also said: “Tribunals should take a ‘realistic and worldly-wise’, ‘sensible and robust’ approach to the determination of what the true position is”. This means they can “disregard the terms of any documents generated by the employer which do not reflect the reality of what is occurring on the ground.”

In this case, the documents, which Uber had written and required the drivers to sign, were found to contain a high degree of fiction and artificiality. Uber claimed to be an intermediary between drivers and passengers, but in fact its contractual relationship was with the drivers. In short, the drivers worked for Uber (rather than the other way round).

The high level of control which Uber exerted over the drivers was particularly relevant. For example, it would penalise them for not accepting a certain number of trips within a specified timeframe and/or failing to maintain a certain passenger star rating.

The other main issue was when a driver could be said to be Uber’s worker. The Court agreed this was when they were signed into the app in their territory, and ready and willing to accept bookings.

Is this definitive?

This judgment is highly fact specific so it may be tempting for gig economy companies to assume they can seek to distinguish their own business models from that of Uber. We’re still waiting for clear guiding principles that can be applied to the shifting sands of the gig economy. Many practitioners have noted that the recent Supreme Court judgment in the Pimlico Plumbers case is unhelpfully lacking in elucidation of legal principles of general application.

We think the Court of Appeal (in what it calls a ‘final general observation’) has potentially set up the Supreme Court to give just such a judgment in this case. The majority decision said:

“We consider that the extended meaning of ‘sham’ endorsed in Autoclenz provides the common law with ample flexibility to address the convoluted, complex and artificial contractual arrangements, no doubt formulated by a battery of lawyers…”

To the next level

It is worth noting there was one dissenting voice amongst the Court of Appeal judges. Lord Justice Underhill (who has a distinguished reputation in employment law) disagreed that the contractual documentation could be so readily dispensed with or that the relationship was artificial. The judgment overall is therefore calling out for a determination of where precisely the line of the court’s power is drawn. In this context, it’s not surprising Uber was granted permission to appeal to the Supreme Court.

If the Supreme Court does indeed address the limits of the court’s flexibility in looking beyond documentation in these contexts, then its judgment could prove seminal, particularly as far as the gig economy and the modern world of work is concerned.

It’s worth remembering that the workers in the Autoclenz case were car-washers – very different from the technology platform-based gig economy workers in Uber. As such, it is about time we had a Supreme Court judgment to augment Autoclenz and provide more salient guidance in future gig economy cases, which takes full account of the nuances that technological advances have brought. This, together with legislative reform to recalibrate the boundaries between ‘employee’, ‘worker’ and ‘independent contractor’ status, could help bring clarity for both individuals and businesses, as the modern world of work continues to develop.