Uber the Employment Rainbow

Uber the Employment Rainbow?

Employment lawyers are (rightly) accused of hyping up the ramifications of employment tribunal decisions and the impact they may have on business or workers.  There’s a decision pending though which may actually live up to its billing.

Over the summer, Uber drivers brought test cases arguing that they are entitled to basic workers’ rights such as holiday pay and the national minimum wage.  The judgment is due soon.

The decision will affect the tens or thousands of Uber drivers in the UK (there are 42,000 in London alone).  But it will also impact on all the other delivery drivers and couriers who are contracted on a self-employed basis, the numbers of whom have increased exponentially to meet our insatiable demand for goods ordered online.  And it will have wider impact on other apparently self-employed workers, for example those who are engaged to carry out activities via online platforms.

The new jargon term for this is the “gig economy”: think Uber, Airbnb, Etsy (online marketplace), Takrabbit (home chores), fivver (anything online for £5!).  Many see the trend as generating risk-free entrepreneurship with the in-built flexibility to fit around other work or family life.

The downside though is the lack of a steady pay cheque and fixed hours, let alone other company benefits such as pensions.  At worst, for their efforts gig workers can end up earning significantly less than the minimum wage with no job security.

You can read an interesting article about the two sides of the gig economy here.

The trend fits in with the wider growth of self-employment, which relies principally on a good broadband connection.  Many embrace the opportunity to develop good businesses, but many others find to their cost that all they have done is create not a business but a lower paid job with longer hours and more insecurity.

Back to our Uber drivers.  Are they genuinely self-employed, or does Uber have enough control over them that they are entitled to workers’ rights such as holiday pay and national minimum wage?  My guess is that the tribunal judge will decide against them, on the basis that common sense dictates that Uber drivers are not in essence much different to other mini-cab or black cab drivers, none of whom have “an employer”.

But you can bet that whatever the decision, it will get appealed all the way through the appeal courts (the GMB is backing the Uber drivers).

The point however is that our employment laws, despite what the judges may say, are not equipped to deal with this kind of self-employment.  The basic concept of self-employed is that you take on more risk for potentially better pay (and you can pay yourself a decent holiday if you wish).  But if increasing numbers of the new self-employed end up poorer, the trade-off breaks down: what is the logic of the rest of society having rights to a minimum wage and holiday pay?

To be cynical about this, it is all very well outsourcing goods and services to other countries where they pay a pittance and have lax health and safety laws (who cares so long as we get cheap goods?), but we may well end up creating similar issues back home.

Sounds a bit dramatic I agree, but the danger is that if the growth of self-employment continues they will increasingly replace paid employment and there will be fewer paid jobs to go round.  Increasingly, for many people self employment will be the only way to go, a good portion of which will be (very) poorly paid.

My view is that at some point there will be basic level of protection for the new self employed, but that this is role of Government not the Courts.  But given current priorities I wouldn’t hold your breath that this will happen anytime soon.

(c)  Thornber Employment Law Ltd