There is often a fine dividing line in determining whether, on the one hand, an individual is an employee or worker; or whether they are a genuine self-employed contractor on the other.
Emerging trends in the workplace – particularly that of “agile working” – are making this determination increasingly more complex and have somewhat muddied the waters of the traditional test for determining worker status.
With ever-improving technology leading to further changes in working practices, could the means by which we determine worker status change with it?
The recent decision by Uber drivers to raise Employment Tribunal proceedings against the US-based taxi app has brought this issue sharply into focus.
Uber is widely known as a “disruptive innovator” – a company which breaks new ground by challenging the manner in which services have traditionally been delivered. Taxi drivers who maintain their own vehicles have long been regarded as genuine self-employed contractors.
However, a number of Uber drivers (with the backing of GMB) are arguing that they are “workers” who fall within this mid-tier level of employment status within the UK – sitting somewhere between employees and the genuinely self-employed.
In particular, the drivers are seeking to assert rights in relation to holiday pay and the National Minimum Wage that they would not have as self-employed contractors. According to Uber, their drivers “use Uber on their own terms” and enjoy the flexibility of being self-employed.
The drivers argue that they should be classified as workers for a number of reasons; most notably the level of control that Uber has over them. For example, Uber dictates how much customers should be charged and requires drivers to follow particular routes.
Clearly, something has to give.
In practice, Employment Tribunals consider a variety of factors in determining worker status – including whether there are requirements for personal service and mutuality of obligation, as well as whether an individual is carrying on a business in their own account. A key element of the latter part of this test is the degree of control that an engager has over an individual – but to what extent is this concept of control being eroded by new working practices?
Technology is constantly improving; and as technology has developed, workplace practices have followed suit. The notable recent trend towards agile working has (in no small part) been facilitated by ever-improving technology – but what impact could this have on determining the legal status of an individual?
According to the Employer’s Network for Equality and Inclusion, agile working is:
“a way of thinking in which an organisation empowers its people to work where, when and how they choose – with maximum flexibility and minimum constraints – to optimise their performance.”
On the face of it, such arrangements effectively mimic those of self-employed contractors; yet many people who are working under “agile” arrangements are, in fact, employees.
Those with contractual agile working arrangements are free to determine their own working hours – coming and going as they please and working where they want, when they want in order to complete tasks allocated to them.
Yet this laissez-faire approach is directly at odds with the traditional concept of control, which according to the test in Ready Mixed Concrete v Minister of Pensions and National Insurance, is focused on “the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done.”
Ready Mixed Concrete was decided in the late 1960s – nearly 20 years before Apple unveiled its first Macintosh PC to the world. Back then, nobody could have predicted that technology would develop to such a degree that people could work wherever and whenever they wanted using a handheld tablet computer.
Although subsequent cases have developed the test of control to some extent, the law has not developed at the same rate as working practices have. In reality, technological developments effectively mean that individuals can now perform a traditional “office job” without ever actually physically setting foot in an office.
As the concept of agile working develops further, perhaps now is the time to consider whether the control element of the test for determining worker status should develop with it.
This is the first employment-related litigation against Uber in the UK and the outcome of the case could have wide ranging consequences for a number of web and app-based businesses. In particular, if the Uber drivers are deemed to be workers, it would have a significant impact upon the ever increasing number of app-based “disruptive innovators” that enable those seeking work to be matched online with those who require services to be performed.
This type of business model is now present in a wide variety of different sectors, with low operating costs and a flexible workforce being critical to their success. If the Employment Tribunal does indeed determine that Uber’s drivers are workers under UK employment law, it will be interesting to see whether a rethink of this increasingly popular business model would ultimately be required.