Uber and the gig economy – where are we now?
The long running Uber v Aslam
saga has finally come to an end. The Supreme Court has confirmed that Uber
drivers are workers rather than self-employed contractors. As such, drivers are
entitled to basic employment rights such as the national minimum wage, paid
holiday and rest breaks. The Supreme Court upheld the decision of the
employment tribunal and changed the emphasis for determining worker status. A
‘worker’ is defined by section 230(3) of the Employment Rights Act 1996. The
statutory definition includes employees
and anyone else who works under ‘any other contract…whereby the individual
undertakes to do…personally any work…for another party’ provided the other
party isn’t a client or customer of the individual (which would make them
genuinely self-employed).
Uber and other gig economy cases
have shown that written contracts can mask an entirely different state of
working affairs. Instead of looking at the individual’s contract with the
business, the Supreme Court said the starting point should be the statutory
definition. It is important to consider what the statutory wording was designed
to achieve in the first place – the protection of vulnerable workers from being
paid too little, being required to work too much, or being treated otherwise
unfairly. The Supreme Court noted that many individuals in the gig economy do
not have the negotiating power to match the businesses they work for. In this
case, drivers were subordinate to and dependent on Uber. This imbalance in
power means that the contract cannot be the right starting point, as it was
drafted by the party who holds all the cards. Laws such as the national minimum
wage and paid holiday were brought in to protect individuals and that
protection would be undermined if those rights could be circumvented by some
clever contract drafting.
In this case, the evidence showed
that Uber exercised significant control over drivers in relation to the work,
from the car they drove, the price a customer paid and whether drivers could
accept or decline work. That control made the drivers workers. A genuinely
self-employed person could make these choices for themselves. The contracts
were designed to mask the true relationship to Uber’s advantage.
The key point for businesses from
this case is that contracts can never trump statute on this issue. If the
starting point for deciding worker status is the statute itself, then it
doesn’t matter how you dress up the relationship in any contractual documents.
This decision will be costly for Uber. The Supreme Court agreed that the
drivers were working when they were logged into the app not just when they were
driving. The value of drivers’ backdated claims for national minimum wage will
be enormous, and that’s before considering paid annual leave. Who’s holding the
cards now?
Harassment
Harassment occurs if an employee
(X) engages in unwanted conduct relating to a protected characteristic (such as
sex or race) which has the purpose or effect of:
- Violating another employee’s (Y) dignity or
- Creating an intimidating, hostile, degrading,
humiliating or offensive environment.
X’s employer will be responsible
for harassment which takes place during the course of their employment unless
they can show that they took ‘all reasonable steps’ to prevent X from behaving
that way or doing something similar.
In Allay v Gehlen, the
employee was of Indian origin and employed as a senior data analyst between
October 2016 and September 2017. During that period, a colleague regularly made
racially discriminatory comments to and about him. Mr Pearson commented on Mr
Gehlen’s brown skin, suggested that he should work in a corner shop, noted that
he drove a Mercedes ‘like all Indians’, and asked why he was in this country.
Mr Pearson described the comments as ‘banter’. Another colleague and two managers
were aware of the comments, but nothing was done except one manager issuing a
mild rebuke to Mr Pearson. Mr Gehlen brought a harassment claim. The employer
tried to defend the claim by saying that they had equal opportunities and
anti-bullying/harassment policies and had trained staff on their terms. As such
they had taken all reasonable steps to prevent this kind of behaviour.
The employment tribunal upheld Mr
Gehlen’s harassment claim. They accepted that the employer had policies and had
done training, but the standard was poor even for a small employer. The
training had taken place in January 2015 and had become stale. The fact that
one colleague and two managers failed to challenge the harassment showed that
any training had worn off. The employer had not taken all reasonable steps to
avoid discrimination - a further reasonable step would have been to provide
refresher training. The Employment Appeal Tribunal agreed. If there is a
further reasonable step that an employer should have taken, the defence will
fail, even if it would not have prevented the discrimination occurring. The EAT
noted that the employer had now provided Mr Pearson with additional training,
and they wouldn’t have done so if they thought it would be ineffective.
This case shows that the ‘all
reasonable steps’ hurdle is a high one to clear, even for a small employer. It
isn’t enough to have policies and training – they must be good quality and the
message cannot be allowed to go stale. The courts noted here that the message
of any training had clearly been lost because staff both made and ignored
obviously racist comments. Annual refresher training is a must. So is
revisiting policy and practice to see whether there are other reasonable steps
which could be taken to protect employees from harassment. This will help
protect a business from liability.
Whistleblowing
A worker is protected from
detriment and dismissal if they have made a ‘qualifying disclosure’. The worker
must reasonably believe that the disclosure is in the public interest and tends
to show wrongdoing such as a failure to comply with a legal obligation. The
public interest element of the test is designed to differentiate between
personal interests and those which have a wider application. But the worker
need only reasonably believe that the disclosure is in the public interest
(rather than it actually being so) and it doesn’t have to be the worker’s only
motivation in making the disclosure. The EAT has recently looked at the public
interest requirement in Dobbie v Feltons.
The employee worked for a firm of
solicitors as a consultant solicitor, working with one of the firm’s biggest
clients. He made what he said were protected disclosures about the firm
overcharging the client. One of his disclosures also related to his own fees
being written off to a greater extent than other fee earners. He said he had
been treated badly because of these disclosures including having his
consultancy agreement terminated. He brought a whistleblowing claim.
The employment tribunal found
that the employee reasonably believed that the disclosure tended to show the
breach of a legal obligation - he believed the overcharging was a breach of the
firm’s client obligations and a possible breach of accounting rules. However,
they found that he did not reasonably believe that his disclosure was in the
public interest. They found that he believed it was a private matter relating
to the individual client. The employee appealed to the EAT who agreed with him.
The tribunal had misapplied the public interest test. They hadn’t considered
the identity of the alleged wrongdoer – a firm of solicitors which is subject
to high standards of honesty and integrity. The nature of the wrongdoing had
not been properly considered either, which included potential regulatory
breaches. Those regulations are in place to protect the public. Although public
interest is more likely to be found when more people are affected, there are
cases where disclosures relating to one person can have a wider remit. Here,
the disclosures could have advanced a wider public interest around solicitors
complying with regulatory requirements and not overcharging their clients.
Having found that the employee reasonably believed that there had been
regulatory breaches by way of overcharging, the tribunal had not explained
their finding that this was a purely private matter and wasn’t protected. The
EAT sent the case back to a fresh employment tribunal to reconsider whether the
disclosures were made in the public interest.
This case shows that disclosures
can be made in the public interest in cases which relate to apparently private
matters. This can be the case even when matters may be motivated by
self-interest – in this case the solicitor’s own fees being disproportionately
written off. Provided the employee reasonably believes that the matter is in
the public interest, the test will be satisfied. Even if issues relate only to
one client or person, they may have a wider public interest as was the case
here.
Unfair dismissal
Conduct is one of the potentially
fair reasons for dismissing an employee. It is the employer’s job to show that
conduct was the reason for the dismissal in question. An employment tribunal
will then decide whether the dismissal was fair. In making that decision, the
tribunal will look at the size of the employer and the resources it has
available and decide whether the decision to dismiss fell within the range of
reasonable responses. A fair procedure is also key to a fair dismissal.
In Northbay Pelagic v Anderson,
the employee was a director of a seafood company. He was dismissed for gross
misconduct at the same time as two other employees. The cases were connected
but not identical, so the employer got three HR consultants to investigate and
hear the cases. The grounds for dismissing Mr Anderson were various but
included failing to follow a management instruction and covertly recording
anyone who came into his office via a secret camera (he wanted to protect
personal confidential information on his work computer). The employee brought a
claim for unfair dismissal which the employment tribunal upheld. They said
there was a fatal flaw in the dismissal process because the consultant hearing
his case had gleaned information (a witness statement from a Mr Ritchie) about
his case from conducting the investigation into one of the other employees. The
employer appealed.
The EAT allowed the appeal. The
tribunal hadn’t been clear on whether an instruction had been given for the
employee to then ignore. Although fact finding is not a job for the EAT (that
is the employment tribunal’s job), the EAT looked at the evidence and said it
gave a clear answer on the issue - the instruction in question had been given
at a specific company meeting. The EAT also found that the consideration of Mr
Ritchie’s evidence in the employee’s case was not a procedural flaw. They
referred to the Acas Code which did not give specific guidance on how to deal
with procedures relating to multiple employees. The EAT said it would not have
been reasonable to expect the employer to retain three separate sets of HR
consultants. Nor was there any need to seal off the evidence between the
individual investigations. If evidence is relevant, it can be used in multiple
cases as required. In relation to the
surveillance point, the EAT agreed the dismissal on this ground was unfair. The
secret recording was set in a background of mistrust and a poor relationship
between employee and employer. The employer did not properly consider the fact
that the camera was set up in an office to which only the employee had access.
No one’s image had been captured on it. The employer should have weighed up the
right to privacy against the employee’s desire to protect his confidential
information. The EAT also said that the employer had failed to call the right
witnesses to counter the employee’s evidence, which had led to the tribunal
believing him over the company. The case was sent back to a fresh employment
tribunal to decide whether the dismissal was unfair based on the management
instruction point.
This case has many take away
points for employers. Firstly, choose the right witnesses. Where there are
disputed facts, individuals with first-hand evidence of those disputes should
be called as witnesses in tribunal. Calling the people who conducted the
disciplinary processes may not be enough. Secondly, the EAT confirmed that
surveillance by employees involves the same balancing act between rights and
privacies that employers are required to undertake in relation to surveillance.
Handbooks and policies can address this, for example by saying that covert
surveillance will be considered gross misconduct. The EAT’s confirmation about
the acceptability of using relevant witness evidence across multiple
disciplinary processes is also comforting. In fact, the EAT specifically told
the tribunal to consider Mr Ritchie’s evidence when considering the issue of
failing to follow a management instruction.
TUPE
The Transfer of Undertakings
(Protection of Employment) Regulations (TUPE) provide that employees who are
employed in the relevant part of the business, immediately before a transfer,
will automatically transfer to the transferee. This is called the automatic
transfer principle. If an employee would have been employed immediately before
the transfer but for being automatically unfair dismissed – where the transfer
is the sole or principal reason for the dismissal – liability for the dismissal
passes to the transferee. The Employment Appeal Tribunal has recently decided
that an employment tribunal made a mistake when it ordered reengagement of an
employee by a new service provider when the new service provider wasn’t part of
the proceedings.
In Greater Glasgow Health
Board v Neilson, the employee was a GP who was employed on a fixed term
contract which was terminated when the GP service transferred to a new service
provider. He had enough continuity of service to bring an unfair dismissal
claim. He brought a claim against the
old service provider – the Health Board – saying he had been automatically
unfairly dismissed and should be reengaged by the new service provider,
Levenside Practice (LP). The Health Board admitted that the employee’s
dismissal was TUPE related so the only issue for the employment tribunal to
deal with was remedy. The tribunal ordered that LP reengage the employee, even
though LP was not a respondent in the proceedings. The Health Board appealed.
The EAT said the employment
tribunal had made errors. If the employee had been assigned to the group of
employees which transferred, he had no claim against the Health Board at all.
Either his employment would have transferred to LP or he would have a claim
against LP for automatic unfair dismissal. Either way, the Health Board would
not be liable. The tribunal was wrong to make an order against one respondent
to be reengaged by another business (LP) which was not a respondent in the
proceedings. The EAT sent the case back to the employment tribunal to decide
whether the employee was assigned to the group of employees which transferred:
either he was, and liability passed to LP as his new employer, or he wasn’t,
and liability would rest with the Health Board. If the employee wanted any
remedy against LP, he would need to apply to join them into the proceedings as
a respondent.
It will now be for the employee
to join LP into proceedings if he wants to seek a remedy against them. This
case shows the importance of employees identifying the correct respondent. In
TUPE cases where an employee is arguing they should have transferred, that will
include the transferee.
Dismissal – Covid-19
Throughout the Covid-19 pandemic,
employers have had to grapple with the health and safety risks to employees and
customers. Jobs where employees have contact with the public are particularly
exposing in terms of the virus. Many employers have brought in rules about face
coverings/masks and social distancing to protect customers, clients and staff.
Most employees have no issue with these necessary steps, but there are always
exceptions. An employment tribunal has recently looked at a claim for unfair
dismissal by an employee who refused to wear a face mask at work.
In Kubilius v Kent Foods,
the employee was a delivery driver whose job involved travel to and from Tate
& Lyle, the main provider of work at the Basildon depot where the employee
worked. The employee handbook required employees to be courteous with clients
and take all reasonable steps to safeguard their own health and that of others
they worked with. The drivers’ handbook required employees to follow customer
rules on PPE. Tate’s rules required visitors to their site to wear face masks
at all times, even when in their vehicles. The employee attended Tate’s
premises but refused to wear a face mask while in his own cab. He was told that
it was a Tate rule and necessary in his elevated cab to avoid droplets from his
mouth from landing on people below as he spoke to them. He continued to refuse,
saying the cab was his own area and he wasn’t legally required to wear a mask.
Tate banned him from their site and reported the incident to the employer. The
employer dismissed him for breach of both company rules and Tate’s rules.
The employment tribunal said his
dismissal was fair. The employer had conducted a reasonable investigation into
an event where the facts were not disputed. They had formed a reasonable belief
that the employee was guilty of misconduct. The employee continued to insist
that he had done nothing wrong which caused concerns about his future conduct.
His ban from the Tate site caused practical difficulties for his continued
employment. The employer was entitled to take into account the importance of
maintaining good relationships with its clients. The decision to dismiss fell
within the band of reasonable responses even though another employer might
reasonably have issued a warning instead.
Employers will breathe a sigh of
relief at this judgment. It isn’t binding on other tribunals, but it feels like
a common sense decision. The employer had followed a reasonable process and
could show that the decision to dismiss was reasonable in the circumstances.
The message to employees is simple: if you are asked to wear a face mask for
work, you need to do it unless there are sound medical or other reasons for not
doing so. In this case, the employee had no justification, no regrets and
clearly no regard either for the health and safety of those he worked with or
the reputation of the business which employed him. He paid for that with his
job.
Compensation
Section 1 of the Employment
Rights Act 1996 requires employers to give employees a statement of their
employment terms no later than the beginning of employment. The law changed
recently - previously employers had a period of 2 months after employment
commenced to comply with this duty, which didn’t apply at all if employment
continued for less than a month. Section 38 of the Employment Act 2002 provides
for additional compensation of between 2 and 4 weeks’ pay if an employee wins a
claim in the employment tribunal and, at the time those proceedings began, the
employer had been in breach of section 1 duties.
In Levy v 34 & Co, the
employee worked for the employer for a short period. He brought a claim for
unlawful deduction from wages of around £150. He told the tribunal he worked
for the employer from 29 October to 28 November, which he said was one month.
He did not raise the issue of the section 38 claim in his claim form and it
wasn’t raised at all until he produced a schedule of loss claiming more than
£1000 in extra compensation. The employer did not engage in the tribunal
process because he thought the claim was so low value. The employment tribunal
awarded the employee £150 compensation for his unlawful deductions claim but
didn’t make an order for additional compensation under section 38. The employee
appealed.
The employer didn’t respond to
the notice of appeal either. They wrote to the EAT later in the process,
providing additional evidence which showed that the employee had resigned on 27
November with immediate effect, meaning he had not worked for one month after
all. The employee said it was too late to argue about this: the tribunal
decided he had been employed for a month and he was therefore entitled to the
extra 2-4 weeks’ pay. The EAT disagreed. The employment tribunal had not been
obliged to order the extra compensation under section 38. That claim wasn’t in
the claim form and had not been brought to the attention of the employer, who
had failed to take part in the process because of its apparent low value. Had
the employer known there was a claim for up to 4 weeks’ pay, of over £1000,
they might have requested an adjournment, to address the point properly, and it
would likely have been granted. The EAT said the additional evidence showed the
employee’s last day of work was either 25 or 26 November and he resigned on 27
November. He had not been employed for a month. The employment tribunal had not
been wrong in law. Quite the opposite, it would have been wrong in law to award
the uplift in the first place.
This claim got a bit sticky for
two reasons. Firstly, the employee didn’t plead all relevant points properly,
which meant the employer didn’t know about a valuable part of what the employee
was claiming. However, this was compounded when the employer did not engage in
the tribunal process. The EAT noted that this may have been a proportionate
choice by the employer based on its low value, but it meant that vital evidence
wasn’t brought to the attention of the employment tribunal. This case shows the
potential dangers of ignoring tribunal process, and how small claims can
sometimes grow into much bigger claims if they are left unchecked.
Post Brexit Changes to
Employment Law?
Brexit rather slunk into effect
back in January, the headlines overtaken by Covid-19 and the third national
lockdown in the UK. To salve some of the negative effects on business, many
employers have been wondering whether Brexit would mean a change to some
EU-derived employment laws that cause consternation on the ground. Hope
therefore surged earlier this year when the Financial Times hinted at
government plans to rip up certain employment laws including the 48 hour weekly
working time limit, rest breaks and the inclusion of overtime in certain
holiday pay calculations.
It wasn’t to be. The newly
appointed business secretary has confirmed that there is no plan to reduce
workers’ rights. Kwasi Kwarteng MP said it is the government’s intention to
protect and enhance workers’ rights rather than row back on them. He confirmed
that the department of Business, Energy and Industrial Strategy was carrying
out a consultation with business leaders
on EU employment rules including the Working Time Directive. Apparently,
the consultation will look at our previous EU membership and the aspects that
the UK may want to keep. Mr Kwarteng acknowledged that there had been stories
about a bonfire of rights but added that ‘this couldn’t be further from the
truth’. Sadly, for anyone hoping that TUPE would be a thing of the past, or
that holiday pay calculations might become a bit easier, a seismic post-Brexit
shift in employment law isn’t on the cards just yet.
Health and safety – Covid-19
Offices seem to be worse hit by
Covid-19 outbreaks than other types of workplace. Data shows that in the second
half of 2020 there were more than 500 outbreaks or suspected outbreaks in
offices, more than in supermarkets, construction sites, warehouses, restaurants
and cafes combined. The BBC reported recently that there were 60 suspected
Covid-19 office outbreaks in the first two weeks of the third lockdown, more
than any other type of workplace. Issues which may contribute are a lack of
ventilation, hot desking and insufficient cleaning.
At the time of writing, the
message from the government is still for employees to only go to work if they
cannot reasonably work from home. However, a TUC survey found that one in five
employees are still travelling to work despite the government edict. 40% of
respondents to the survey said that they had been pressured by management into
going in.
Despite the high attendance at
workplaces, the Health and Safety Executive confirmed this month that it has
not issued any prohibition notices to employers since March 2020 in relation to
unsafe pandemic practice. The Guardian reported that inspectors’ hands were
tied because the virus is only classified as a ‘significant’ threat rather than
a ‘serious’ one. However, the HSE has refuted allegations that it isn’t taking
the pandemic seriously. They confirmed they would prosecute if appropriate but
said that they were using persuasion, advice and reprimand to effect change
rather than time consuming legal process.
And thank goodness for that.
Employers are trying to do their best in unprecedented and testing times. Many
have learned that it simply isn’t possible to do certain tasks or jobs at home.
Businesses must take care to ensure that appropriate risk assessments are in
place for employees who must attend work, with particular importance placed on
good ventilation, social distancing and advanced cleaning measures. Try to keep
those who must come into work to a minimum - employees should still work from
home if they can.
Flexible working
The Chartered Institute of
Professional Development, which represents HR professionals, has called for
flexible working to be a day one right for employees and for jobs adverts to
stipulate that they can be done flexibly. Currently, the law requires an
employee to have 26 weeks’ continuous employment before they can make such a
request. Flexible working requests can be rejected for a variety of reasons:
the burden of additional costs, detrimental impact on meeting customer demand,
inability to organise work among existing staff or recruit more, detrimental
impacts on performance or quality of work, or lack of work during periods where
the employee wants to work.
Their recent survey included more
than 2000 workers and found that almost
half don’t have any kind of flexible arrangement such as flexitime, part time
working, compressed hours or job shares. The survey revealed that although the
pandemic has resulted in a huge increase in homeworking, two out of every 5
employees continue to go to work, with most saying the nature of their jobs
prevented them working at home. The CEO of the CIPD, Peter Cheese, said that if
employees can’t work from home, giving them more control over when and how they
do their work would help. He encourages employers to look at other modes of
flexible working to give more choice to all employees and allow them greater
control over their working lives.
At a time where we have lost
control over so many of our choices and freedoms, it is understandable that
employees might want more control over their work. But flexible work can be
good for employers too. Studies have shown that remote working can actually
increase employee productivity. Flexible arrangements can promote a healthy
work life balance and reduce stress and burnout. Flexible working can increase
work satisfaction and enable businesses to attract the best talent. Who
wouldn’t want this from day one?
