The recent UK Supreme Court verdict that Uber drivers are workers and not self-employed individuals has significant labour market repercussions for the world. This verdict has implications for India too, for it acknowledges that behind the veil of technology there lies the employer-employee relation in gig and platform works too. KINGSHUK SARKAR explains the implications.
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.
A Landmark Case
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.
Two Uber drivers in the UK had contended before the courts that 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.
Elements considered by the UK Supreme Court
The UK Supreme Court while delivering the judgement, considered the following elements:
- Uber sets the fares for each ride the drivers carry out and the drivers are not permitted to set their own prices as they would if they were self-employed.
- Uber determined the contract terms, and the drivers had no say in this respect; the driver can only accept the terms and conditions.
- A driver’s performance rating is monitored by Uber, where Uber has the capacity to terminate the working relationship if this is not to their satisfaction and if the driver does not improve following repeated warnings. Here the court observed that this is a classic form of subordination that is a characteristic of an employment relationship; and
- Uber monitors the requests that each driver receives and may penalise drivers if they cancel too many rides.
The UK Supreme Court felt that since a driver’s performance rating is monitored by Uber, where Uber has the capacity to terminate the work relationship if this is not to their satisfaction and if the driver does not improve following repeated warnings, therefore working for Uber is a classic form of subordination that is a characteristic of an employment relationship
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.
Reactions from stakeholders
The United Private Hire Drivers (UPHD) branch of the Independent Workers Union (IWGB) said the decision is “very significant” for all private hire drivers in the UK.
The union wrote on Twitter: “As a worker, you have certain legal protections and benefits, such as the right to paid holiday and the right to receive the National Minimum Wage.
“You also have a right to union representation in disciplinary matters and to collective bargaining,” UPHD added the ruling could help them push for better pay and conditions.
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.”
Jamie Heywood, regional general manager at Uber London, said, “We respect the court’s decision, which focused on a small number of drivers who used the Uber app in 2016. Since then we have made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury. We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”
Uber said the consultation would “shape the future of flexible work”. But it said some of the main arguments in the Supreme Court’s ruling no longer applied. For example, drivers now know their destination before accepting a ride; they have full transparency over price, and Uber argues that since 2017 there has been no impact on drivers who cancel multiple consecutive trips.
Implications for India
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.
The gig economy is set to grow 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, most of it gig and platform work.
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.
Uber has worldwide operations and things happening in the UK would impact other countries. 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.
Behind the veil of technology, there lies the employer-employee relation in gig and platform jobs. 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.
The article was originally published in The Leaflet.
(Dr. Kingshuk Sarkar is an independent researcher and labour administrator with the government of West Bengal. He was a faculty of the VV Giri National Labour Institute, Noida and NIRD, Hyderabad. Views expressed are personal and not necessarily that of his organisation.)