By Kingshuk Sarkar
After a prolonged legal battle that started in 2016, on 19 February 2021, Uber London lost its final appeal when the British Supreme Court ruled that Uber drivers are to be classified as “workers” and not as “self-employed” individuals.
The court held that the group of Uber drivers who had applied to it were “workers” under the Employment Rights Act 1996. This implies that Uber drivers are now entitled to minimum wages, paid leaves and other legal entitlements in the same way as their employed counterparts.
Even though it only concerns the drivers involved in the 2016 case, this judgement has set an important precedent that could affect the working entitlements and conditions of other gig and platform workers across the globe.
In 2016, two individuals, James Farrar and Yaseen Aslam, who worked as Uber drivers, initiated a case against Uber before the Employment Tribunal. They argued that they should not be considered as gig workers or independent contractors but as employed individuals. They won the case against the ride-hailing app in October of the same year. Uber decided to appeal the decision. However, the Appeals Tribunal upheld the earlier ruling in November 2017.
Following this, Uber took the case to the Court of Appeal, which also upheld the ruling in December 2018. This eventually led to the final decision delivered on 19 February, wherein British Supreme Court ruled on the last appeal. It has confirmed that Uber drivers are indeed workers and not independent self-employed individuals.
The two drivers had contended that during the periods covered by their claims they were workers for the purposes of the Employment Rights Act 1996, the National Minimum Wage Act 1998 and the Working Time Regulations 1998. They argued that this entitled them to the minimum wage paid leave and other legal protections.
Uber argued that the drivers are independent third-party contractors and not workers. Uber further focussed on the fact that it is merely a cab-booking platform that is used by the self-employed contractors (also known as “gig workers”) that provide transport. They said drivers wish to retain their status as independent contractors since it provides them greater flexibility as they are free to choose their time of operation compared to those who are employed full-time.
The court held that the question about whether or not the drivers are “workers” is not to be associated with the contract between Uber and its drivers. Rather, it is important to understand the purposes behind the protective labour legislation, namely, the Employment Rights Act 1996.
The court has held that the purpose of the legislation is to protect vulnerable workers from exploitation by granting them certain rights. If Uber’s argument was accepted, it would be allowed “to determine for itself whether or not the legislation designed to protect workers will apply to its drivers”. Allowing Uber to exempt its drivers from statutory rights conferred by Parliament would seriously undermine the meaning and efficacy of the legislation.
The UK Supreme Court also raised concerns in relation to how Uber strictly limits communication between the driver and passenger requesting a ride via the app.
Lord Leggatt, while delivering the judgement, observed that the relationship between Uber and drivers is one of “subordination and dependency” and noted that drivers have little ability to increase their professional skills, and can only boost their earnings by carrying out more work for Uber.
The Labour Party said the ruling sent “a very clear message” to companies whose workforce was made up of those in the gig economy.” Andy McDonald, MP and shadow employment rights and protections secretary, said, “This is a hugely important ruling with significant implications for the gig economy. Uber drivers and all gig economy workers should get basic rights at work, including decent pay, safety and job security.”
Paul Jennings, a partner at Bates Wells—the law firm representing the drivers who brought the case against Uber—said, “The Supreme Court’s judgment is a clear and powerful restatement of the importance of basic employment protections. It will shape all future cases concerning the gig economy.”
In India too, there has been a steady proliferation of gig and platform platforms and workers over the last five years of the last decade. In India, there are about three million gig workers—temporary workers including independent contractors, online platform workers, contract firm workers, and on-call workers.
The number is certainly small if one were to compare it with India’s 500 million workers. However, the good part is that an estimated 56% of new employment is generated by the gig world.
This figure is set to rise as there are very few employment opportunities in the formal sector. In the pre-pandemic period, we had decent growth over a considerable period of time but the employment growth rate in the corresponding period was low. The few jobs that are available are mostly informal with gig and platform work being a significant contributor.
In India, the issue of establishing employer-employee relations in Uber/Ola operations has been brewing for the last few years and the UK experience will have an impact on the Indian scenario. For one, Uber has worldwide operations and things happening in the UK would have an impact in other countries too. Besides, App-cab drivers in India have demonstrated before Uber authorities regarding issues related to pay, working period, weekly holiday etc. Uber drivers mostly consider themselves as employees of Uber. However, Uber maintains it provides the online platform only. Uber does not consider itself as its employer.
The UK ruling clearly establishes that there is enough justification to consider Uber an employer and Uber drivers are entitled to receive protection under the relevant existing labour laws. Technology is being used to mystify employer-employee relations here. The verdict thus untangles the labyrinth of mystification in this instance. The ramification will not be limited to Uber or for that matter other app-cab drivers but to gig and platform workers on the whole.
Behind the veil of technology, there lies the employer-employee relation in gig and platform works. Employees are entitled to receive protection as postulated in various labour legislations. The newly-formulated Code on Social Security explicitly includes gig and platform workers under the broad social security umbrella. They are considered part of the unorganised sector workers’ diaspora.
However, the UK Supreme Court verdict shows gig and platform work can also be a part of formal work structures and the employer can be held responsible to provide statutory protections as postulated in labour laws. Employers in gig economy can no longer hide behind the veil of technology to deny workers their statutory labour rights. (IPA Service)