For the past few years, the “gig economy” business model – in which workers are classified as independent contractors and therefore not given basic employment rights – has been on trial across the world.
From Uruguay and the United States to Australia and France, couriers and drivers have been bringing legal challenges against food delivery and passenger transport companies, such as Uber, Lyft, and Deliveroo, arguing that as their “workers” or “employees” they should be entitled to employment protections such as minimum wage, paid holidays and the right to unionise.
The United Kingdom has been one of the main battlegrounds for such cases and things have not gone well for the companies: they have lost virtually every high-profile workers’ rights case that has been brought against them.
And last week, they lost again. In a landmark decision published on February 19, the UK Supreme Court ruled that Uber drivers belong to the legal category of “limb (b) workers”, which entitles them to employment rights.
The court reasoned that “the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber… [It] is designed and organised in such a way as to provide a standardised service to passengers in which drivers are perceived as substantially interchangeable and from which Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill.”
For anyone who has taken an Uber before, this assessment is no shocker. The decision is also not surprising as Uber had already lost three times in a row before the case reached the Supreme Court. Nevertheless, this decision still has dramatic implications for workers.
“Gig economy” companies often make the people who work for them sign highly sophisticated contracts that are designed to make it look like they are independent entrepreneurs rather than the companies’ employees. When the issue goes to court, the companies rely on these contracts to argue their case. These contracts are key to the functioning of the “gig economy” because they are the main mechanism through which the companies try to disguise the otherwise blindingly obvious fact that they are hiring workers and telling them how to do their jobs but refusing to give them basic employment rights and protections.
The Supreme Court addressed this issue in its latest decision against Uber head-on. In particular, it held that courts and tribunals should not treat these contracts as the starting point of their analysis, because “an employer is often in a position to dictate such contract terms” and “the individual performing the work has little or no ability to influence those terms”.
The effect of the Uber decision is that it will now be even harder for employers to use their contracts to misclassify their workers and deprive them of basic rights. This means that any attempt by Uber to squirm out of the decision by changing the contracts – as the company has already hinted at – will be all but hopeless in the courts.
With last week’s decision against Uber, the Supreme Court also underlined its commitment to ensuring that the laws passed by Parliament – in this case laws that aim to protect vulnerable workers from exploitative employers – are being fully implemented.
The UK Supreme Court has been bolstering the role of Parliament for a while now.
In 2017, the court held that despite the Brexit referendum vote, then-Prime Minister Theresa May could not take the UK out of the European Union without an act of Parliament. Later that year, the court struck down a regime of employment tribunal fees, noting that if people do not have unimpeded access to the courts to demand the enforcement of the laws passed by Parliament, “the democratic election of Members of Parliament may become a meaningless charade”.
And in 2019, after Prime Minister Boris Johnson attempted to shut down Parliament for several weeks, the Supreme Court ruled the decision unlawful. Indeed, it is a hypocritical peculiarity of British politics in recent years that despite a Brexit campaign fought by some – ostensibly – to protect the sovereign role of Parliament, it is the Supreme Court, rather than the Brexiteer government in power, that has become the institution’s staunchest defender.
With its latest decision against Uber, the Supreme Court sent the message to all UK workers that it would not allow gig economy companies to trample employment rights and protections that have been enshrined in law by their elected representatives.
The impact of the decision is likely to be felt beyond Britain’s shores as well.
For example, some of the worker’s rights the Supreme Court considered in last week’s decision come from European Union (EU) law. In EU law, various employment rights, such as paid holidays, equal pay for men and women, and protection from discrimination, apply to “workers”, a legal category with the same definition in the bloc’s 27 member states. So, the fact that Uber drivers were held to be “workers” in the UK would likely be persuasive for courts across the EU considering whether the company’s drivers are entitled to the same rights there.
Beyond Europe, from India to the US, the decision has been hailed as a symbolic precedent for regulators and courts.
Although employment laws differ between countries, Uber’s defence in workers’ rights cases is usually the same: it claims to be a technology, rather than transportation, company, acting as an intermediary between drivers and passengers. The fact that a panel of six justices of the UK’s highest court has unanimously rejected this absurd assertion is likely to be persuasive for courts around the world grappling with the same issue.
In the US, there are multiple definitions of “employee” across state and federal laws. However, the courts often consider the control a company exerts over a worker as a key factor when deciding whether that worker is entitled to employment rights or not. So, the UK Supreme Court’s extensive discussion of how Uber controls its drivers will likely be helpful to drivers arguing their cases across the pond.
In Australia, Uber has successfully defended itself against several legal challenges concerning workers’ rights (although it recently settled the most high profile of these after being scolded by a judge in federal court). However, Sheryn Omeri, one of the lawyers representing Uber drivers in the UK, who also practices law in Australia, suggests the UK Supreme Court’s decision will be influential on future Australian cases. UK court decisions are “the obvious choice for Australia to look to”, she told me.
It is important to note that when it comes to regulating the “gig economy”, the judiciary, workers and trade unions cannot act alone. Governments must force companies to obey the law by way of prosecutions and fines. Indeed, the UK government has a particularly abysmal record on this, making the role of trade unions all the more important. But with last week’s decision, the exploitative “gig economy” business model has been dealt a decisive blow, and for that, couriers, drivers, and unions worldwide should celebrate.
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.