Legal briefing: Reality bites in the gig economy

With almost five million people working in the gig economy, some of the biggest names in business are part of this phenomenon. Lean structures relying on armies of flexible workers have created lucrative global operations.

Uber hit the news recently when the Supreme Court confirmed that its drivers are ‘workers’ and not independent contractors. “Drivers are in a position of subordination and dependency in relation to Uber,” read the judgment.

The gig economy model is a challenge to our health and safety laws, which were designed for more traditional structures with employees and small numbers of contractors. But this isn’t the first case to highlight gaps in the protections afforded to gig economy workers. Here we look at two cases that are laying the foundations for a more regulated future.

Case 1: Failure to implement EU Health and Safety Directives
The Independent Workers Union of Great Britain sought a judicial review of the UK’s implementation of two EU directives designed to encourage improvements in the health and safety of workers.

The issue was highlighted by the pandemic; many Union members are drivers and couriers in public facing roles. They complained they were working without PPE and that social distancing was not being observed. Their roles also had higher than average rates of death from COVID-19 and so they had particular need for the additional health and safety controls required by the directives.

The Union argued the current law gave greater protection to ‘employees’ even though the EU directives were aimed at the protection of ‘workers’; a wider group. UK law should, they said, have reflected that position.

The government and the Health and Safety Executive argued that existing laws were adequate to protect both employees and other workers. The High Court ruled that the UK had failed to implement the EU directives.

Gig economy workers should:
• be able to take steps to avoid serious and imminent danger without being disadvantaged;
• be entitled to PPE when the risks involved in their work cannot be avoided or sufficiently limited by technical means of collective protection or by working methods and organisation.

The government declined to appeal and must legislate to fully implement the EU’s intentions.

Case 2: Uber drivers are workers
In February the Supreme Court confirmed that Uber drivers are not independent self-employed contractors as the transport app had contended. The level of control exerted by Uber from the moment drivers switched on the app was such that the drivers were ‘workers’.

This landmark ruling entitles drivers to claim national minimum wage, paid annual leave, sick pay, minimum rest breaks and whistleblowing protection.

The ruling is further evidence of a judicial appetite for change in how gig economy businesses are run.

Viewpoint
A working relationship can’t circumvent certain laws just because the dominant party labels it in a particular way. It is clear the courts are not just interested in the letter of any contract but also with the day-to-day reality.

Businesses relying on casual workforces will need to rethink and restructure as the law eventually catches up with their more innovative business models.

Rhian Greaves is associate partner at Pannone Corporate LLP