With the rising concern of global warming, the 21st century is the era of share-economy. The share-economy is a new social-economic system that usually involves a trite party built around sharing resources. The system is a global success and it has been implemented as a new business model for many startups. As a service provider, the good thing about the system is it encourages maximum use of resources so that nothing is wasted. For example, if you owned a car just to go to work from Monday to Friday, now you can use it to take on passengers over the weekend through a booking agent without being a full-time driver. Or if you owned a three-room apartment but you are staying alone, now you can rent out the other two easily through a booking agent. As a booking agent, you can now start your empire in the transportation or the hospitality industry without the need to own a single vehicle or a hotel. As a customer, you can enjoy the same service at a cheaper price. As a result, the system created many multi-millions unicorn startups such as UBER, Airbnb, and Grab. I believe Uber or Grab is not a stranger to many of us who do not own a vehicle, the Supreme Court in UK has recently in a case defined the relationship between Uber, one of the leaders in the share-economy system, and the drivers, who ride on customers through the booking apps. There are two central questions in the case:
The first, whether the drivers whose work is arranged through the apps work for Uber under workers' contract and so qualify for the national minimum wages, annual leave, and other worker's rights?
Second, if the 1st question is answered in affirmative, whether the driver is considered working for the company once they logged into the Uber apps and ready to take on passengers or they were working only when driving passengers to their destination?
UBER's case
It is contended by Uber that these drivers do not have the rights because they are not employees of the company, they work for themselves as independent contractors performing service to the customer through UBER as their booking agent.
It is further submitted that the correct starting point to defined the relationship is to interpret the terms in the service agreement signed by the company with the drivers and also the agreement between the company and the customers. Uber relies on the terms which state that their only role is to provide technology services and to act as a payment collection agent for the driver, once a booking is accepted there is a contract created between the passenger and the driver which no UBER entity is part of it.
Counsel for UBER claims that the tribunal is erred in law to apply a statutory meaning for workers because that will disregards the terms of a written contract.
Court Decision on First Question
To answer the first question in the case, the Supreme court breaks the first question into 2 parts:
Whether the word 'worker' shall be decided by the terms of the agreement as submitted by UBER or defined by S230(3) of the Employment Act 1996; and
If the word 'worker' is to be defined by applying the statutory meaning, whether the status of the drivers in the case fits into that interpretation.
Agreement or Statute?
The Supreme Court applying the principle in the Autoclenz case and states that whether a contract is a worker's contract within the meaning of the legislation is not to be determined by applying ordinary principles of contract law such as the parol evidence rule and the signature rule. The general purpose of the legislation is to protect vulnerable workers from being paid too little and required to work excessive hours or subjected to other forms of unfair treatment. It is these features that give rise to a situation in which such a relationship cannot be left to contractual regulation and considered to require statutory regulation. To do so would reinstate the mischief which the legislation was enacted to prevent.
In short, the court is of the opinion that one cannot contract out of the Employment Rights Act 1996, what decide the relationship between the company and the drivers is by looking at the scenario as a whole and whether the person is working under the direction of another person in return for which he receives remuneration. Hence, the court disagrees with UBER's contention that the starting point of the relationship shall be referred to the terms in the agreement.
Does the Driver status fit into the definition of the Employment Rights Act 1996?
"worker" is defined by s 230(3) of the Employment Rights Act 1996 to an individual who has entered into or works under (or, where the employment has ceased, worked under):
a contract of employment;
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;
The tribunal decided that the drivers were workers within the meaning of the second limb. The supreme court concurred with the decision and states that the greater the extent of control from the company towards the drivers, the stronger the case for classifying the individual as a worker who is employed under a workers' contract.
What is fatal to the UBER case are the five aspects of the tribunal's finding :
The remuneration paid to the drivers for the work is fixed by Uber and the drivers have no say in it.
The drivers are required to accept Uber's standard agreement but the terms on which they transport passengers are also imposed by UBER and drivers have no say in it.
A driver's choice on whether to accept a request for rides is constrained by UBER once they logged on to the apps.
UBER exercises a significant degree of control over the way in which the drivers deliver the services. Ubers vets the type of car that may be used.
UBER restricts communication between passenger and driver to the minimum necessary during the trip.
Taking all these factors together, it can be seen that the service performed by the drivers is tightly defined and control by UBER.
Court Decision on the Second Question
On the second question, the supreme court agrees with the tribunal that the drivers were "working" during any period when they
(a) had the Uber app switched on,
(b) were within the territory in which they were authorized to work, and (c) were ready and willing to accept assignments.
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