Recent UK Supreme Court Decision dismissing Uber Appeal sparks debate on the Rights of Gig-Workers

Casualisation has long since been a substantial feature of the labour force. However, in recent times, the rapid rise of the ‘gig economy’ has contributed to a major shift in traditional understandings of what ‘work’ is and the various, unconventional forms that it now takes. Accordingly, perceptions of what ‘workplace protection’ looks like, who ‘workers rights’ should apply to, and the extent to which they should apply has ignited debate in politics and the general community.

One example of this debate was seen in the recent UK Supreme Court’s decision to dismiss an appeal by Uber claiming that Uber drivers are ‘independent contractors’ and not ‘workers’ for the company.[1] The substance of the initial claim made by two Uber drivers went to the definition of ‘worker’ under s 230(3) of the Employment Rights Act 1996 (UK) (the UK Act) and whether they ought to be classified as such.[2] Although Uber contended that the contractual relationship was strictly between the Uber drivers and customers, making them independent contractors of Uber, the Court rejected Uber’s argument.

Ultimately, the UK Supreme Court decided that since the statutory definition of ‘worker’ under the UK Act includes individuals paid to personally perform services under a contract for another who is not a client or customer – in this case, the Uber company – Uber drivers should be considered workers, which would then entitle them a right to the UK’s minimum wage, paid leave, rest breaks, and protection against unlawful discrimination. The UK Supreme Court preferred implementing a ‘purposive approach’ reminiscent of the earlier UK Supreme Court decision in Autoclenz v Belcher,[3] reaffirming the position that regardless of the legal device utilised to engage a worker, a worker is an employee and not an independent contractor if the relationship is marked by the traditional characteristics of employment.

In the Australian context, many gig-economy workers are treated as ‘independent contractors’ with no employment rights under the Fair Work Act 2009 (Cth), including the right to legal minimum pay rates, sick leave, or unfair dismissal protections, which are traditionally afforded to permanent employees. Further, the insecurity that gig-economy workers currently face in Australia has been compounded by COVID-19, where casuals and those working in insecure employment bore the brunt of job losses because of the pandemic-borne recession that ensued. It is apparent that the risks associated with insecure work for gig-economy workers need to be addressed with certainty sooner rather than later.

Additionally, tension continues to rise due to recent decisions pertaining to the actual relationship between gig economy workers and the entities they perform work for. One such decision included the Fair Work Commission Full Bench’s majority finding[4] that a delivery driver for Uber was not technically an employee and, therefore, not entitled to initiate an unfair dismissal claim against Uber Australia under the Fair Work Act.[5] The claimant, Ms. Gupta, appealed the matter to the Full Court of the Federal Court of Australia. However, as the matter was privately settled, questions about the employment relationship between Ms. Gupta and Uber remain unanswered. This silence has added to confusion about the relationship between gig workers and the online platforms they perform work for, emphasising the need for an in-depth policy discussion of insecure work and legislating gig-workers’ rights.

Labor has recently commenced policy discussion on the issues faced by gig workers in Australia. Federal opposition leader Anthony Albanese recently addressed the issue of insecure work by recommending reforms to improve job security for gig economy workers. Such reforms would afford gig economy workers entitlements such as award benefits, minimum pay, superannuation, access to paid leave, and the right to collectively bargain. Further, Mr. Albanese confirmed Labor’s policy also includes the development of a portable entitlements scheme for various forms of paid leave and that, if elected, Labor will ‘legislate to ensure more Australian workers have access to employee protections and entitlements currently denied to them by the Fair Work Act’s narrow definition of an “employee”’.

While the rise of the gig economy has seen workers seize the opportunity to obtain more flexible employment, the need for legislative safeguards for this section of the Australian workforce is pressing. According to the Actuaries Institute, the gig-economy has undergone a 9-fold increase between 2015 and 2019. Although, the supply of gig-workers has simultaneously increased to meet this demand, safeguarding the gig section of the Australian workforce has been limited. The question remains as to whether the Morrison Government will, or should, legislate to provide stronger protections for gig-economy workers before future claims arise.

If you have any questions in relation to the classification of employees and/or contractors, please do not hesitate to contact Nick Stevens, Luke Maroney or Daphne Klianis.

[1] Uber BV and Ors v Aslam and Ors [2021] UKSC 5.

[2] Ibid, [2018] EWCA Civ 2748.

[3] [2011] UKSC 41.

[4] Amita Gupta v Portier Pacific Pty Ltd; Uber Australia Pty Ltd [2019] FWC 5008.

[5] Ibid.