Our thoughts on the world of employment law - and beyond.

Uber confusing

I noted with interest a recent ruling by the California Labor Commissioner that an Uber driver in that state was an employee, not a self-employed contractor.   

Uber argued it was no more than a “neutral technology platform” but this commissioner disagreed, concluding “the reality… is that [Uber] are involved in every aspect of the operation”.  That included controlling the tools drivers use (for example the iPhone app provided and the fact that cars must be registered with Uber, be less than 10 years old and comply with “industry standards”), monitoring drivers’ approval ratings and terminating their access to the system if their ratings fell below 4.6 stars.  Aside from her car the driver had no investment in the business and her work did not entail any managerial skills that could affect profit or loss. 

Uber are appealing and have been at pains to state that the decision only applies to one individual.   In any event the case does not of course bind the UK courts (or even other parts of the US) and so any London cabbies rubbing their hands in glee should contain their excitement.  But particularly if it is followed by a similar UK challenge the case raises questions in relation to a host of apps that match a network of potential service providers with customers and perhaps for the future world of work in general, where traditional employer/employee relationships may arguably be overtaken by more flexible and possibly harder to define relationships. 

Reading the case was also a reminder of something that has often struck me over some 15 years as an employment lawyer, namely that one of the biggest perennial questions is whether someone is, in fact, an employee.  It’s such a fundamental question that, logically, the answer should be self-explanatory – and yet all too often the exact reverse is the case.  The Uber decision is just the latest example in an ever-lengthening list of cases which have grappled with the issue.  A very experienced HR Director once said to me “But what is a worker?!” and many will I suspect share that pain. 

The tests for employment status are many and varied and the associated confusion isn’t helped by the fact that, trite though it is to say it, every case does of course turn on its own particular facts so watertight precedents are few and far between.  The legal principles established piecemeal over many years also now need to be overlaid onto the brave new world of work and the expansion of phenomena such as zero hours contracts and other atypical arrangements not in contemplation when the law of master and servant (as it used to be known) first evolved.     

What does seem clear is that the current lack of clarity helps no one.  The individual risks being exploited and losing out on valuable statutory rights.  The organisation risks breaking the law and a chunky backdated tax bill.  Uncertainty of that magnitude is no friend of business growth.

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