I'm really excited for this Supreme Court Uber webinar with Laura Robinson and @timothygoodwin later, and there is still time to sign up.
If you can't make it, I'll be attending and tweeting out the highlights from 4pm.
#ukemplaw #uber #legalwebinar
And we're starting. @timothygoodwin says this case sends "tremors, not ripples" through employment law; and that it raises questions about whether Uber's business model is sustainable. #uberdecision #ukemplaw #legalwebinar
Laura Robinson (LR) is taking us through the decision. In summary:
1. Were Uber's drivers workers (and not independent contractors);
2. If they were workers - were they working whenever logged in, or just when driving?
#uberdecision #ukemplaw #legalwebinar
The (less interesting) answer to question 2 is: Uber's drivers were working whenever they were logged in (not just when driving).
But the most important part of the decision, is on issue 1 - worker status. #uberdecision #ukemplaw #legalwebinar
The parties were important. As well as the drivers, there were:
- Uber BV - the parent company;
- Uber London - British company, a holder of relevant private hire licences; and
- Uber Britannia - the "rest of UK" version
#uberdecision #ukemplaw #legalwebinar
There was a complex web of written agreements, with Uber London holding the private hire booking licence, but the drivers entered an agreement with Uber BV (a non-UK company) #uberdecision #ukemplaw #legalwebinar
An important feature of this case is that Uber London held a Private Hire Vehicle Operator's Licence for London - taking private hire bookings without one, or non-compliantly, is a criminal offence. #uberdecision #ukemplaw #legalwebinar
This is a case about so-called "limb (b) workers" - an intermediate status between employees working on employment contracts, and "true" private contractors (well-described in van Winkelhof v Clyde & Co) #uberdecision #ukemplaw #legalwebinar
(Just as an aside here: there are 90 attendees to this webinar; well done to @timothygoodwin Laura Robinson and the @12kbw team in getting this together on the first working day after the decision!) #uberdecision #ukemplaw #legalwebinar
Some important findings of fact, found by the ET and not challenged:
1. Uber fixed remuneration, and drivers couldn't challenge.
2. Contractual terms were dictated by Uber.
3. When logged in, driver behaviour is heavily circumscribed by Uber. #uberdecision #ukemplaw #legalwebinar
Re: 2: Uber's argument in the SC was that the contractual terms should be construed strictly, eg in labelling drivers as contractors. The SC noted that this would allow Uber to decide what rights drivers did and didn't have. #uberdecision #ukemplaw #legalwebinar
Some more findings of fact:
4. Uber exercised consderable control over drivers, cars, and the route, and a rating system for further control (and to decide whom to terminate);
5. Uber restricted communication between drivers and passengers. #uberdecision #ukemplaw #legalwebinar
The practical effect of 5, was that drivers could not e.g. build up favoured customers, or their own business relationships. #uberdecision #ukemplaw #legalwebinar
Of the 3 elements of a "limb (b) worker", only the first (contract to perform work or services) was in issue. It was agreed that they were to perform services personally; and it wasn't suggested that there was a client/customer relationship #uberdecision #ukemplaw #legalwebinar
The ratio of the decision is deceptively simple:
- Uber said this was merely an agency relationship, and one defined by contract...
- But there was no written agreement between Uber LONDON and the drivers; the agreement was with Uber *BV*.
#uberdecision #ukemplaw #legalwebinar
If Uber London was trying to comply with private hire licensing (and it had to be assumed to be), then it had to be assumed to be providing a service to passengers to provide a vehicle & driver - not an agency matching drivers and passengers. #uberdecision #ukemplaw #legalwebinar
...this in turn, indicates a contract between Uber London and a driver, that the driver is in a contract of service. #uberdecision #ukemplaw #legalwebinar
The second difficulty for Uber, was that there was no factual basis to say that drivers conferred authority on Uber London to be their agents. Drivers didn't have an agreement with Uber London, but with Uber BV. #uberdecision #ukemplaw #legalwebinar
Thanks for that Laura - now over to @timothygoodwin.
The SC could simply have stopped there and said "the facts of this business model don't match the law".
But instead, they went on to give judgment on worker status more generally. #uberdecision #ukemplaw #legalwebinar
In Autoclenz v Belcher, it was held that for worker contracts, the courts consider the substance of the relationship, not merely the form of wording used. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Uber argued for privity of contract: there was apparent consistency between the contract and contractor status, so no looking behind it (Autoclenz only applied if there was inconsistency). @timothygoodwin #uberdecision #ukemplaw #legalwebinar
The SC rejected this approach completely. Lord Leggatt: the effect of Autoclenz was that the "ordinary principles of contract law" aren't applied mechanistically to questions of worker status. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Why is this? In work relations there is an imbalance of the bargaining power of the parties. But not only that - the relationship is extensively regulated by statute; and the rights asserted by the Claimants were statutory. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
This, in turn, means that this isn't an exercise of contractual interpretation: the case is about whether certain statutory rights apply, and so it's an exercise in *statutory* interpretation, which means a purposive approach. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
The case relies heavily on what the SC says is the "modern approach" to statutory interpetation: looking to the purpose of the statute. In this case the statutes are there to protect vulnerable workers from various detriments. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
This is stated in Burns Brothers (decided by the now-Underhill LJ): workers and employees are subordinates; contractors are of a different status, and should be assumed to be able to look after themselves. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
The question therefore isn't "do you meet the criteria for a worker"; it's "is your status sufficiently independent that you drop out of the statutory protections"? @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Having identified that purpose, to agree with Uber - that the contract is the start and end - would be illogical; because to do so "would reinstate the mischief the legislation was enacted to prevent" @timothygoodwin #uberdecision #ukemplaw #legalwebinar
If that is right: Uber and others can simply draft their contracts to decide who is and isn't a worker, and who does and doesn't benefit from their statutory rights. This would undermine those protections. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Tying all of this out, is the prohibition on contracting out of employment rights (s203 ERA1996). Parliament has banned contractual terms restricting statutory rights and ET access. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
This (and similar provisions) being the case, how do we approach a term saying "you agree you are not a worker, and indemnify against claims to the contrary"?
SC: the prohibition is very wide. These clauses cannot be upheld.
@timothygoodwin #uberdecision #ukemplaw #legalwebinar
One of the wider effects, therefore, of the Uber decision, is that indirect (as well as direct) exclusion clauses will be of no effect and will be disregarded - clauses saying "I agree I'm not a worker" are simply void.
@timothygoodwin #uberdecision #ukemplaw #legalwebinar
Even further: any employer who includes such a clause after this decision raises a red flag - they doth protest too much @timothygoodwin #uberdecision #ukemplaw #legalwebinar
At first instance, EJ Snelson criticised the "twisted language and fictions" of trying to structure arrangements around avoiding worker status; substance always trumps form @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Contract is not irrelevant; but the facts have to be viewed realistically, and the purpose of the statutes (protection of vulnerable workers) is paramount. It's a simple application of facts to law. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
The overarching issue for worker status is subordination and control; and the touchstone for that, is the degree of control exercised (or independence enjoyed) @timothygoodwin #uberdecision #ukemplaw #legalwebinar
What does this mean for employment lawyers practically?
We have to revisit contracts - and avoid highlighting difficult relationships with "exclusion clauses"
No more express or implied attempts to contract out
@timothygoodwin #uberdecision #ukemplaw #legalwebinar
Lawyers have to understand their clients' business models, and be candid that they either have to give up control to truly independent contractors, or accept worker status @timothygoodwin #uberdecision #ukemplaw #legalwebinar
As soon as employers (and lawyers!) start trying to construct the contracts to avoid worker status - you're probably creating a worker relationship which will be doomed to a successful challenge by the workers @timothygoodwin #uberdecision #ukemplaw #legalwebinar
How has Uber reacted? Their public statement says they will "consult" drivers on giving them "more control".
Uber is apparently doubling down on non-worker status; preferring granting greater independence to statutory rights @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Is this going to be successful? Probably not: the SC goes further than mere control, because there is little ability for drivers to improve their position by entrepreneurial skill; their commerical future is dependent on Uber @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Unless the extra control granted by Uber can convert the drivers into truly independent professionals (and not people who simply have to work longer to make more money), they are likely to fail again @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Now questions.
First, does this apply only to the Claimants, or to all Uber drivers?
Probably all drivers. Uber argued that they were bound by regulators and so had to exercise some control. The SC were not impressed by that. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Another Q: what if a company offered the choice to be a contractor, or a worker?
LR: that probably won't work. The SC said there should be no contracting out, the statutory rights exist for an important reason. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
LR: this is also likely to be an unequal bargaining position - it doubles back to the SC's overarching point about the purpose of the legislation. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Q: does this apply more widely to the rest of the gig economy?
TG: Deliveroo are in the CA at the moment - they won their case, on somewhat different facts. But the principles in Uber are very wide. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
The "margin of appreciation" the courts will have for employers will reduce post-Uber: this is likely to have a big knock-on for the rest of the gig economy. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Q: Can Minimum Wage questions before the 2-year ET limitation period, be pursued in the County Court?
LR: yes; people may start to try that. Uber may resist drivers beyond these Claimants, but are unlikely to succeed. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Q: what about e.g. less vulnerable consultants, like lawyers and other professionals?
TG: vulnerability is important; but the SC didn't set down a test of vulnerability for application of the rules. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
...rather, in applying the test of e.g. subordination/control, vulnerability is a relevant factor.
But also: why isn't a professional contractor in a law firm "vulnerable" in this way? @timothygoodwin #uberdecision #ukemplaw #legalwebinar
LR: in Van Winkelhof v Clyde & Co, it *was* a consultant in a law firm who asserted worker status. That person couldn't work on their own account, and so was sufficiently subordinated to be a worker. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Q: what does this mean for IR35 status determinations?
TG: this is a tricky one; but historically the courts have been willing to consider questions of status for tax, and for employment, as potentially divergent. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
How that plays out in relation to IR35 is difficult to say.
LR: the tax regime is separate. The main issue in IR35 is that many of those people *are* independent, but the issue is about tax status. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
Q: do all Uber drivers have to pursue these claims individually, or will there be a collective ruling?
LR: strictly these drivers will have to pursue individual claims. But there's no reason why the ET wouldn't group them @timothygoodwin #uberdecision #ukemplaw #legalwebinar
TG: on the holiday pay claims (Williams) more than 10 years ago, there were countless claims; Uber and other gig economy companies may see similar for NMW and holiday. They'll have to bring individual claims, then be joined. @timothygoodwin #uberdecision #ukemplaw #legalwebinar
TG: one of the alternatives is through a union: one of the drivers has set up an App Drivers' Union; the most help it will be, will be to try to negotiate a collective agreement @timothygoodwin #uberdecision #ukemplaw #legalwebinar
I think we are now wrapping up: if there are any questions or you would like our slides, please email events@12kbw.co.uk, or consult our website at 12kbw.co.uk for Tim and Laura's individual email addresses @timothygoodwin #uberdecision #ukemplaw #legalwebinar

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