GIG ECONOMY – EMPLOYEES, WORKERS OR CONTRACTORS?

GIG ECONOMY – EMPLOYEES, WORKERS OR CONTRACTORS?

Introduction

The term “gig economy”, to which we are all becoming more and more familiar, defines a labour market where labour is exchanged for money between individuals or businesses via digital platforms, on a short-term and/or payment by task basis (as opposed to permanent jobs)[1].

In 2017, research carried out by the Chartered Institute of Personnel and Development estimated that 4% of UK working adults aged between 18 and 70 (equivalent to approximately 1.3 million people) were working in the gig economy[2]. Of these, nearly 40% fell into the 18-29 age range, compared to just 21% of workers who do not work in the gig economy. Although the research does not tell us with any certainty whether these people are doing so to supplement other work or to substitute employment entirely with this type of work, it is believed that 58% of those engaged in gig economy work are permanent employees who supplement their income.

As pointed out in the Taylor Review[3], on the one side this emerging new type of work is certainly adding flexibility to the UK labour market (which is seen as a positive characteristic). On the other, however, it raises issues in relation to the definition of the employment status of those working in the gig economy sector: this issue impacts on the ability of the gig economy workers to identify and understand their rights.

Indeed, often the individuals engaged in the gig economy are not employees nor workers, but self-employed contractors, who have the freedom to accept work or reject it. As we will see in the following paragraphs, however, such an employment status has been challenged (with success), giving gig economy workers increased protection.

Like the UK, the rest of Europe is also witnessing a rapid growth of this business model and struggling to define the employment status of those engaged in the gig economy. Therefore, as part of this analysis, we will also comment on some decisions of the Italian, French and Spanish employment courts on this matter.

Finally, we will consider the fact that the new way of working introduced by the gig economy poses questions about the suitability of the current employment law framework and the ways in which the UK Parliament and the European Union are addressing this issue[4].

Employee, worker or self-employed?

The Employment Rights Act (ERA) 1996 provides definitions of the terms “employee” (s. 230(1)) and “worker” (s. 230(3)(b))[5], although these are not comprehensive and the case law has added substantial contents to such definitions. By exclusion, anyone who is neither an employee nor a worker will be self-employed for employment law purposes. The system, therefore, comprises three types of work statuses[6].

In particular, s. 230(1) of ERA 1996 reads “In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment”, whereas in accordance with s. 230(3)“In this Act “worker” (except in the phrases “shop worker” and “betting worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under)— (a) a contract of employment; or (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual; and any reference to a worker's contract shall be construed accordingly” (workers are also referred to as “limb (b) workers”).

Undeniably, the statutory definitions quoted above are ambiguous and open to much interpretation (so that only courts can fully differentiate employees from workers based on the above basic principles), to the point that the Taylor Review advocated for the Government to make the legislation clearer and more transparent in this respect[7]. A change in the law appears even more advisable in light of the new emerging models of working such as the gig economy.

Indeed, clarity becomes crucial as the most extensive employment rights are limited to employees. Individuals who qualify for worker status are entitled only to some core rights (e.g. National Minimum Wage, regulated hours of work and annual leave, protection from discrimination due to part-time worker status, protection from detriment on the grounds of trade union membership or activity, protection from detriment or dismissal when whistleblowing, protection under the Equality Act 2010), whilst those who are genuinely self-employed are entitled to very few statutory protections at work.

It follows that the correct definition and understanding of somebody’s employment status matters greatly (and not just in relation to the application of statutory protections, but also contractual obligations, statutory duties and tax treatment)[8].

However, clarity is not simply a matter of statutory definition. It is also a matter of interpretation of the terms of the contract between the parties and of their genuine intention as regards the type of relationship they wish to create (beyond the terms expressly set out in the contract and with regard to the bargaining positions of the parties)[9].

The interpretation of the real terms of the agreement between the parties is difficult to achieve without recourse to formal channels such as employment courts, which apply a series of tests and look at a number of factors to determine an individual’s actual employment status.

These clues include (but are not limited to): the contents of the job advertisement; the contents of any written agreement between the parties; the tax status of the worker; the extent of control exercised by the employer over the worker; the arrangement of a replacement if the worker cannot attend work; provision of equipment or professional insurance; financial risk (factors sometimes referred to as “general indicators”); existence of a staff handbook or collective agreement governing the individual’s work; formal induction process or provision of training; receipt of sick pay; exercise of disciplinary power; presence of restrictive covenants (“specific pointers” towards employee or worker status); performance of work from the individual’s own premises; personal liability for expenses; issuance of invoices before receipt of payment; (“specific pointers” towards self-employed status).

The test of employment status (s.230(1) ERA 1996) is the requirement of a personal service and mutuality of obligation, that is an ongoing obligation on the employer to offer work and an obligation on the employee to discharge the work offered. There must be some level of control; the employer must broadly direct how, when and where the work is undertaken. In the case of more senior employees, there is less day-to-day supervision.

It is in this context that some gig economy workers have challenged their formal employment status of self-employed contractors, seeking the application to their work relationship at least of the core rights recognised to workers.

Gig economy in the case law of English courts

English courts so far have decided five cases where the judges have been presented with the preliminary task of assessing the actual employment status of gig economy workers. We will now briefly describe the outcome of their analysis.

Uber BV and others v Aslam [2018] EWCA Civ. 2748

The claim was originally brought in 2016 by London-based Uber drivers against the respondents (Uber BV, Uber London Ltd and Uber Britannia Ltd) for failure to pay the minimum wage and provide paid leave. The Employment Tribunal (ET) was, therefore, required to determine at a preliminary hearing whether the drivers were workers for the purposes of s.230(3)(b) of ERA 1996 at all times when they had the Uber App switched on. Uber argued that drivers were independent contractors and that they were under no obligation to switch on the App or accept any assignments offered to them. Such freedoms, according to Uber, were incompatible with the existence of any form of employment or contract for services.

Based on the evidence presented, the ET found that:

(1)    When the Uber App was switched on, any driver who was in the geographical area in which he is authorised to work and is able and willing to accept assignment is working for Uber under a worker contract;

(2)    Uber is a business supplying transportation services: it does not simply sell software, it sells rides;

(3)    the notion that Uber in London was a mosaic of 30,000 small businesses linked by a common “platform” as a means of Uber helping them to “grow” their businesses was faintly ridiculous. Uber did not work for the drivers; the drivers worked for Uber by providing the skilled labour through which the organisation delivered its services. Drivers had to operate strictly on Uber's terms and were in no position to “grow” except by spending more hours at the wheel;

(4)    Uber's proposition that the only contract in existence was between the driver and the passenger was absurd, and pure fiction bearing no relation to the real dealings between the parties: the driver does not know the passenger’s identity, he does not know the destination to which he should drive the passenger until the journey begins, the route is prescribed by Uber from which driver is not free to depart, the fee is calculated by Uber and is paid to Uber (which in the situation envisaged by Uber, would be a third party to the contract);

(5)    the drivers fall full square within the terms of ERA 1996, s. 230(3)(b): they undertake to provide their work personally, they provide their work for Uber and they do so pursuant to a contractual relationship;

(6)    the second respondent, Uber London Ltd (ULL), a UK company holding a private hire vehicle operator’s licence for London, was the employing entity. It recruited, instructed, controlled, disciplined and dismissed the drivers;

(7)    the drivers’ working hours were “unmeasured work” within the meaning of reg.45 of the national Minimum Wage Regulations 2015. A driver’s hours spent returning to his territory to continue working after an out-of-territory trip counted as reckonable time. However, drivers living outside the London territory could not count their travelling to and from home as travel "for the purposes of...work" within reg.47.

The ET’s analysis focused on the actual manner in which the drivers performed their activities and the actual relationship with Uber, interpreting the terms of the contract between the parties and of their genuine intention as regards the type of relationship they wish to create, thus applying the principles set out by the Supreme Court in Autoclenz v Bercher.

Uber appealed the ET decision, contending that: (1) the ET had erred in law in disregarding the written contractual documentation presented as evidence by Uber (there was no contract between the drivers and ULL); (2) the ET had erred in relying on regulatory requirements as evidence of worker status; (3) the ET was not correct in concluding that the claimants were required to work for Uber; and (4) the ET failed to take into account relevant matters relied on by Uber as inconsistent with workers status.

On 10 November 2017 the Employment Appeal Tribunal (EAT) dismissed the appeal brought by Uber BV against the decision of the ET which had concluded that ULL employed drivers as “workers”, for the purposes of ERA 1996 c. 230(3)(b). The EAT found also that the ET had been right in rejecting the label of agency and the characterisation of the relationship between the drivers and ULL in the written documentation as self-employment, since not properly reflecting the reality.

Uber sought permission to appeal the EAT decision directly to the Supreme Court (bypassing the Court of Appeal – so-called leapfrogging), but the Supreme Court refused the application, so Uber brought the case before the Court of Appeal (Civil Division).

The Court of Appeal heard Uber’s appeal on 30 and 31 October 2018[10] and confirmed that Uber drivers are to be considered workers as they are under a positive obligation to be available for work while the app is on, and that that amounts to “work” for the purpose of the Minimum Wage Regulations 2015 (Lord Justice Underhill dissenting)[11]. The Court of Appeal has granted Uber leave to appeal to the Supreme Court.

Pimlico Plumbers Ltd v Smith [2018] UKSC 29

On 13 June 2018 the Supreme Court considered whether Mr Gary Smith, a plumber engaged as an independent contractor, was actually a worker for the purposes of s. 230(3)(b) of ERA 1996. It found that the main feature of the relationship was the personal performance of work and therefore Mr Smith would fall within the definition of worker.

The claim had been originally brought by Mr Smith, who carried out plumbing work for Pimlico Plumbers between August 2005 and April 2011. He complained that, following a heart attack, he was unfairly or wrongfully dismissed and claimed his entitlement to pay during medical suspension, holiday pay and arrears of pay. The respondent company relied on a written term in the contractual documents stating that the claimant was an independent contractor of the company, under no obligation to accept work. The ET, the EAT and the Court of Appeal had found in favour of Mr Smith’s contentions.

The ET found that, despite the claimant being able to reject particular jobs, deciding his own working hours and being unsupervised in relation to the plumbing work, there was not an unfettered right given to the claimant to appoint a substitute to carry out the work and in fact Mr Smith was under the obligation to provide work personally for a minimum number of hours per week. Moreover, the ET found that the respondent company exercised very tight control on the claimant in most respects (that included a degree of restriction on the claimant’s ability to work in a competitive situation, which suggested that he was not in a business on his own account and was inconsistent with the respondent being a customer of any such business). Finally, the ET stated that in reality the claimant was an integral part of Pimlico Plumbers Limited’s operations and subordinate to it.

Therefore, the ET found (and the EAT and the Supreme Court confirmed) that, during the period that the claimant worked for the respondent, he was a worker within the meaning of the Employment Rights Act 1996 s.230(3)(b) and the Working Time Regulations 1998 reg.2, and his working situation fell within the definition of “employment” in the Equality Act 2010 s.83(2)(a).

Dewhurst v Citysprint UK Ltd - unreported[12]

This case was brought by a cycle courier of Citysprint when the respondent failed to pay her for two days’ holiday.

The ET carried out a detailed analysis of the contractual documents executed by the parties (tender to supply courier services to Citysprint), where the relationship was described as a service supply agreement from the cycle courier (defined as “contractor”) to Citysprint as well as of the actual manner in which the relationship unfolded.

The ET found that the manner in which the respondent controlled how the services were performed was not consistent with the above contract, since the courier had no discretion to determine the manner in which the services were performed. Further, the ET found that – contrary to the provisions of the tender document - couriers could not in practice accept and undertake work for others whilst in the process of undertaking jobs for Citysprint nor could they pick and choose jobs when on circuit. In addition, from the ET analysis it emerged that there was no real possibility of substitution of the courier (in reality, a mere swapping of jobs between Citysprint courtiers was allowed).

In terms of work performance, the claimant provided personal performance to the respondent and, even if present, the opportunity of delegation available to the claimant was so small that it could not be said to show that she did not render personal service to the respondent.

The description of the relationship between Ms Dewhurst and Citysprint as a contractor/client relationship did not reflect reality as the claimant was recruited by the respondent to work for it as an integral part and as a worker in a subordinate position, having little autonomy to determine the manner in which her services were performed and no chance at all to dictate its terms.

The ET therefore concluded that the claimant was a worker for the purposes of the Working Time Regulations 1998 during the time that she was on circuit.

Independent Workers’ Union of Great Britain (IWGB) v Central Arbitration Committee [2018] EWHC 1939 (Admin)

The case concerned the Independent Workers’ Union of Great Britain who applied to the Central Arbitration Committee (CAC) to be the recognised union for collective bargaining purposes for a group of Deliveroo riders. The application would only succeed if the riders were workers for the purposes of the Trade Union and Labour Relations (Consolidation) Act 1992 s.296(1)(b).

In contrast to the Uber and Citysprint cases, Deliveroo’s contractual terms with the couriers indicated that the latter could decide whether to log into the app or not, could decline to do a job even after accepting it and had no obligation of a personal service. On that basis, the CAC classified them as independent contractors, hence denying them the right to union recognition.

The claimant trade union sought permission to apply for judicial review of the defendant CAC's decision. It argued that under Article 11 of the European Convention of Human Rights (ECHR), collective bargaining laws should cover Deliveroo riders because all people have a right of assembly and association, including the right to form trade unions. The application was granted in part and this was seen as a small but important step towards establishing that gig economy workers must be eligible for basic protection, the same as others who work for more traditional companies.

However, with a decision issued on 10 December 2018 the High Court dismissed the judicial review on two grounds.

First, Article 11 was not engaged. The ECHR case law involved the right to collectively bargain within an employment relationship, whilst according to the High Court the Deliveroo riders were not in an employment relationship.

Second, even if Article 11 was engaged, restricting statutory collective bargaining rights to workers with a contractual obligation of personal service was justified under Article 11(2). The restriction was prescribed by law under s296(1)(b). Further the restriction was proportionate and struck a fair balance between competing interests.

Of the five gig economy cases brought before the English courts to assess the status of gig economy workers (and here analysed), this is the only one where the judges recognised the genuineness of the contractual terms establishing the independent nature of the relationship between the parties. The findings of the court and its ruling appear to comply with the principles set out in Autoclenz v Belcher (as well as the case law that followed).

 Addison Lee v Lange [2018] 11 WLUK 193

This case was brought before the ET in 2017 by a group of Addison Lee drivers asserting an entitlement to holiday pay and to the national minimum wage, which would only exist if they were workers for the purposes of the Working Time Regulations 1998 and the National Minimum Wage Act 2015.

The ET accepted that there was an overarching contract between each claimant and the respondent company and added that its decision should be based on the inferences drawn from that fact, such as the arrangements that brought the drivers into the respondent’s business model. Plainly, they had to apply to be drivers and Addison Lee had to carry out certain checks. The drivers would need the relevant licence. They were interviewed for suitability. They were tested about their knowledge of London. They experienced induction. They then signed two agreements and the second, the Hire Agreement, entailed a serious financial commitment, as well as subsidiary insurance obligations. By this point it was impossible to say that the drivers were not undertaking to carry out driving work for the respondent, in the vehicles they were agreeing to hire. At the very least, they were impliedly and necessarily undertaking to do some driving work.

The respondent was correct to say that formally the drivers were free not to do so and that they could choose when to do it. The commercial reality, however, was that they were undertaking to do work when and as soon as they logged on. They remained under Addison Lee's rules between driving jobs. Their use of the vehicle, for example, was restricted and regulated; and they could not remove the Addison Lee insignia. Underlying all of this was the ongoing vehicle hire charge that endured from week to week (subject to the free weeks being earned).

From an economic standpoint, all this obliged the drivers to log on and drive, so as to cover fixed hire costs. This was the mechanism by which the respondent could be close to certain that its drivers would log on. Addison Lee needed them to log on; and they needed to do so in order to pay the overheads and then start earning money. They knew that once they logged on, they had to accept the jobs that the respondent's system offered them.

The ET therefore concluded that the drivers were workers within the Working Time Regulations 1998 reg.2(1) and that the time spent logged on to the respondent’s system other than break times was working time.

Addison Lee appealed the decision of the ET arguing that there was no overarching agreement between the drivers and the company whereby drivers undertook to do some work. Moreover, the terms of the implied overarching agreement were contrary to the express terms of the driver contract (a contract cannot be implied if it is contrary to the express terms agreed between the parties). The ET’s conclusion that there was an obligation to work conflicted with its own finding that there was no obligation to log on to the company’s system.

The appeal was dismissed. The EAT found that the ET had been entitled to conclude that the agreement between the drivers and the company satisfied limb (b) of s. 230(3) of ERA 1996.

Addison Lee appealed the decision of the EAT. The Court of Appeal heard the case on 21 March 2019 but to date we are waiting for its decision.

In the meantime, across Europe …

As mentioned in the introduction of this article, similar questions concerning the employment status of gig economy workers have also arisen across Europe, in civil law systems. To date, several cases have been reported (in Italy, France and in Spain). The conclusions drawn by the various courts presented with the issue, as can be expected, vary. This is due to the differences in the statutory framework as well as the focus of the courts’ investigations and their respective interpretation of the general indicators and specific pointers from time to time analysed as well as the employment terms and conditions set out in the different contracts.

What follows is a brief summary of the various courts’ findings and a comparison with the decisions of the English courts commented above.

ITALY – Corte d’Appello di Torino, sezione lavoro, decision no. 26/2019 issued on 26 February 2016

The first Italian ruling on the status of gig economy workers, issued by the Employment Tribunal of Turin in May 2018 found that Foodora couriers (also referred to as “riders”) were genuine independent contractors. The riders had brought the case against the food delivery company claiming their entitlement to salary differences, as well as the reinstatement in their work position and the payment of the salary accrued between their unfair or wrongful dismissal (as the case may be) and such reinstatement. They also claimed their right to damages for the violation of their data protection rights and for the violation of their health and safety rights. First of all, therefore, the court had to assess the real working status of the riders, since the awards sought by the riders only apply to employees and not to self-employed contractors.

The Italian court based its decision on a detailed inspection of the express contractual terms agreed between the parties, on the one side, and the actual manner of performance on the other. In particular, the court found that the claimants had no obligation to work nor was Foodora under the obligation to provide work. Furthermore, according to the Italian court the respondent had no power to give the claimants specific orders and indications as to how they should carry out the work (certainly not through the use of the system the riders logged on to accept the jobs) nor did the respondent exercise disciplinary powers over the worker.

Therefore, the judge concluded that the relationship was genuinely one of self-employment. It follows that, according to the Turin court, the riders were not entitled to salary differences nor to reinstatement in their work position nor to damages of any kind.

The claimants appealed against this decision, seeking a complete review of the decision of the court of first instance.

The Court of Appeal of Turin partially overturned the Employment Tribunal’s ruling. More specifically, whilst the court agreed with the Employment Tribunal that the case at issue did not present the characteristics of an employment relationship under s. 2094 of the Italian Civil Code, it took a different view in respect of the alternative status of the courtiers.

On this matter, the Court of Appeal established that article 2 of Legislative Decree 81/2015 had introduced in the Italian system (traditionally, binary) a third employment status – between employment and self-employment – where the principal had the power to organize the modalities in which the tasks and services must be carried out, including in relation to the time and location of the activities, though without any hierarchical or disciplinary power towards the worker. The Court of Appeal stated that this new type of collaboration can be found where there is an actual integration between the worker and the principal’s business organization which goes beyond the simple coordination, as in the case of work carried out by the riders for the digital platform. The provision, according to the judges, acknowledged the changes and evolutions incurred in the Italian employment system due to new technologies.

Consequently, the Court of Appeal recognised the validity of the claims insofar as the claimants should be considered as collaborators under the definition of article 2 of Legislative Decree 81/2015 (though not employees).

Currently the term to appeal the decision of the Court of Appeal before the Corte di Cassazione (the Italian equivalent of the Supreme Court) is pending.

ITALY - Tribunale di Milano, sezione lavoro, decision no. 1852/2018 issued on 10 September 2018

The claimant of this second Italian case brought an action against Foodinho s.r.l., a food delivery company, seeking to be found an employee of the company, rather than an independent contractor.

In analysing the evidence presented by the parties, the Milan court found that the express terms of the contract between the parties excluded any obligation of accepting or providing work through the company’s platform, provided for the rider’s autonomy in deciding when to work and how long for and that he could even reject a job after having initially accepted it. On the facts, the evidence showed that the rider received no specific instructions on the performance of work nor was he subjected to disciplinary powers.

On that basis, the court found that the rider was genuinely self-employed.

FRANCE - YZ v SAS Deliveroo France – Court d’Appel de Paris Pole 6 – Chambre 22 novembre 2017 n. 16/12875

The French court of appeal reached a decision similar to the ones reached by the Italian courts in establishing that a Deliveroo France rider was not an employee of the company, but a genuine independent contractor.

The court of appeal found that the terms of the contract between the parties would not themselves reveal the existence of an employment relationship and, furthermore, that the actual manner of the performance would suggest that there was no imposition on the rider of specific instructions (for instance, on the itinerary to be followed by the rider or on the means to be used by him) or working time.

The Paris court concluded that the contract was genuinely of self-employment, thus rejecting the worker’s appeal.

SPAIN - Jose Enrique v RooFoods Spain S.l. (Deliveroo) Juzgado no. 6 de Valencia, decision no. 244/2018

The Valencian court reached conclusions that are in stark contrast with those of the other European courts (mentioned above), as it found that the claimant, a Deliveroo rider, was an employee of the food delivery company.

It did so by recognising that (1) the rider had to download an app developed and managed by the respondent, (2) the respondent decided the geographical area in which the worker had to perform his work, (3) although the claimant had communicated the time slots in which he would be available to work, this would have to be within the programme set out by the respondent, (4) the respondent provided specific instructions to the claimant on the terms of his performance, its timing and standards of behaviour and (5) the company could always localise the rider through the app, monitoring the timing of each food delivery

The Spanish judge further considered that it was the respondent who set the contractual conditions with the restaurants using its service as well as the contractual conditions with the ultimate clients who required the food delivery. The rider had no knowledge of the number or identity of the ultimate clients. In addition, the court found that the rider did not work independently in the market but using the respondent’s logo, thus promoting the respondent and representing its image.

Based on the above considerations, the Valencian court concluded that the rider was an employee of the respondent.

Interestingly, the above Spanish decision was followed only a few months later by a ruling of the court of Madrid (delivered on 3 September 2018) which declared that a rider of the food delivery company Glovo was an independent contractor, arguing the significance of the will expressed by the parties in the express contractual terms executed.

* * * * * *

As a general comment, it is worth noting that the various courts’ analysis covers similar factual aspects of the relationships. These are the provisions of the contracts entered into by the parties and the actual manner of the performance of the gig economy workers, with a focus on the power of the employing companies to direct and instruct the workers, to control their performance and to exercise disciplinary powers over them (although English courts seem more focused than their European counterparts on the right to substitution of the worker).

Despite that, the conclusions reached by the judges are sometimes completely different from one another. Surprisingly – at least for who is writing – the courts of the jurisdiction that is notorious for being more favourable to employers rather than employees, the English courts, have recognised more protection to gig economy workers than continental courts.

The main reasons for these results may be certainly found in the different contractual documents (and their structure) as well as the different manner in which work is actually performed by the gig economy workers and their relationship with the platform. However, more importantly, the different conclusions reached by the English courts are due to the peculiar legislation of the English system. Indeed, while other countries have a binary and clearer definition of the forms of working relationship (employed/self-employed), in England and Wales there is a three-tier approach to employment, which sees the worker as a blurred figure in between the employee and the independent contractor, enjoying some but not all the protections of the employee status. One wonders whether the English courts would have granted gig economy workers the full employment protections if the intermediate status had not existed in the system or whether they would have confirmed them as independent contractors, especially where the social aspects of the gig economy (such as the need to supplement an existing income) cannot and should not be taken into consideration in construing the will of the parties.

Looking ahead

While we wait for the decision of the Supreme Court on the Uber case, we should also look at the future of the gig economy and its workers in the UK and in the European Union.

The Taylor Review called for a clarification in the legislation but maintaining the three-tier approach. Indeed, for the authors of the Review “the status of worker provided in employment law is helpful in being able to apply basic protections to less formal employment relationships”. Clarity, in their opinion, would be achieved by having an intermediate category covering casual, independent relationships, with a more limited set of employment rights applying, with the introduction of a new name to refer to the category of people who are eligible for worker rights but who are not employees. The Review recommends that the legislation refer to this group as “dependent contractors”.

However, Parliament does not seem to have embraced this approach, proposing instead an amendment in the law to adopt a binary definition. The Workers (Definition and Rights) Bill (the date of its second reading is yet to be announced) aims at consolidating a single statutory definition of the people to whom employment rights and duties apply and at clarifying the nature and status of workers. This is achieved by amending the definition of worker in various pieces of legislation (such as ERA 1996 and TULRCA 1992) and providing for a single employment status for workers and employees for the purposes of employment rights and employer responsibilities in the workplace.

The Bill’s approach appears to be preferable and more effective, providing a clear cut distinction between those benefiting from employment rights and those who are self-employed, whilst the creation of yet another category of workers (the “dependent contractors”) suggested by the Taylor Review seems to be the cause of even more problems of identification of employment status.

Other investigations and initiatives relating to the gig economy have also taken place (not all of which employment law related). Among these, of particular interest appear to be: (1) the Cross-Government Working Group on Employment Status, which should review the rules for employment status across government and consider the possibility of moving towards a more uniform set of tests on employment status across tax, employment rights and the welfare and social security system; (2) a series of employment status consultations launched by the government in February 2018.

At an EU level, on 16 April 2019 the European Parliament passed a resolution approving the proposal for a new Directive on transparent and predictable working conditions in the EU. The proposed Directive (which could become applicable in 2021/2022) aims to set new rights for all workers, particularly addressing insufficient protection for workers in more precarious jobs, while limiting burdens on employers and maintaining labour market adaptability. The proposed Directive includes a statutory definition of worker, to whom the EU employment rights would apply. Application of the proposed Directive in the UK will depend on the ratification by the UK of the agreement on the withdrawal of the UK from the EU and on its terms.

In conclusion, the employment law challenges created by the development of the gig economy – and particularly the definition of the employment status of gig economy workers and the set of rights applicable to them – is being addressed by courts and legislatures across Europe in similar ways: on the one hand, by analysing the genuine and true will of the contracting parties based on the actual manner in which the relationship between workers and platforms unfold. On the other, by seeking to provide clarity in the legal definitions and the entitlements which ensue.


[1] Department for Business, Energy & Industrial Strategy, “The characteristics of those in the gig economy” (7 February 2018) - https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/687553/The_characteristics_of_those_in_the_gig_economy.pdf.

[2] Chartered Institute of Personnel and Development (CIPD), “To gig or not to gig? Stories from the modern economy” (17 March 2017) - https://www.cipd.co.uk/knowledge/work/trends/gig-economy-report.

[3]Good work: the Taylor review of modern working practices” (11 July 2017) - https://www.gov.uk/government/publications/good-work-the-taylor-review-of-modern-working-practices.

[4] Workers (Definition and Rights) Bill (HC Bill 114) - https://services.parliament.uk/bills/2017-19/workersdefinitionandrights.html and Transparent and Predictable Working Conditions in the EU - https://ec.europa.eu/social/main.jsp?langId=en&catId=1313.

[5] Statutory definitions of the above terms are also provided for by the Equality Act 2010 and ss. 295 and 296 of the Trade Union and Labour Relations (Consolidation) Act 1992, as well as a number of statutory instruments governing various aspects of the employment relationship such as working time, part-time and agency working, maternity and parental leave.

[6] As we will see, this is a crucial difference from other jurisdictions, such as the Italian one, where there is a binary system. This characteristic has a direct impact on the employment courts’ findings in relation to the employment status of gig economy workers.

[7]Good work: the Taylor review of modern working practices” (see note 3), page 34.

[8] The matter is not exclusively a UK issue: at EU level, in May 2016 the European Commission launched a platform to facilitate co-operation in tackling undeclared work, including false self-employment. The platform brings together enforcement authorities (such as labour inspectorates, tax and social security authorities) and other actors (including social partners) involved in fighting undeclared work allowing them to build know-how and showcase transferable practices to tackle undeclared work - https://ec.europa.eu/social/main.jsp?catId=1299&langId=en.

[9] See the seminal decision Autoclenz v Belcher [2011] UKSC 41.

[10] Uber BV and others v Aslam and Farrar, Court of Appeal (Civil Division).

[11] Uber BV v Aslam [2018] EWCA Civ. 2748.

[12] Dewhurts v Citysprint UK Ltd, Employment Tribunal, 5 January 2017 – Case No 2202512/2016.

Chiara Muston, LL.M - 5.06.2019

This article is a summary of recent developments and, whilst every care has been taken to ensure the accuracy of the information provided, it should not be regarded as a substitute for advice in any particular case. Every case is different and you must not act solely on the basis of information contained here. BILA and the article’s author make no warranties as to the accuracy of the information contained in the article and are not responsible for the content of external websites. Where opinions have been expressed, they are the personal opinions of the author and do not constitute professional advice on any level, nor do they represent the opinions of BILA.