The Court of Appeal has just announced its majority opinion that drivers who work for Uber are...well...Uber's workers, and so they have the same rights as other workers (essentially, claims to the minimum wage and paid time off). The courts have arrived at that conclusion by applying the duck test, i.e. if it looks like a duck and quacks like a duck and waddles like a duck then it's absurd for Uber to argue that it's not a duck. By this reasoning, most people would say that Uber drivers are definitely workers because they look like workers. We can all identify a worker when we see them there, working. But wait, what about the law of contract? Do legal outcomes simply depend on how the arrangement looks to the naked eye, meaning that the actual contract agreed between them is irrelevant?
How does contract law fit in with this 'I know a duck when I see one' approach to classifying employment relationships? Is the very concept of contract, i.e. the notion that grown up people can agree about things and then sign an agreement to that effect, now completely irrelevant in unravelling such disputes?
Essentially the court did not quite agree on that question, disagreeing on two key issues: first, whether people can make an agreement that doesn't really look like the sort of agreement you'd expect them to make, and second, whether most people would regard Uber drivers as Uber's workers regardless of the actual terms of their agreement.
This gives phenomenal power to the concept of 'I would never do it that way'. If most people wouldn't do it that way, then a contract agreeing to do it that way will be regarded as a 'sham' disguising the true facts: because the true facts must conform to how most people would do things. And the truth is that 'most people' are not trying to be innovative in their day to day life. They're just trying to do things how everybody else does things. Anybody breaking out into a new way of doing things must by definition be going against the way that 'most people' would do it. This means that in law, old thinking (what most people would do) is superior to innovative thinking.
The dissenting opinion rests partly on this point: under the prevailing view, it is assumed that since most workers are economically weaker than most employers, it follows (it is assumed) that most workers would not willingly agree to terms that are 'unfair': if the written contract looks unfair it should therefore be set aside as it can't possibly reflect the 'true agreement' and must therefore be a sham. This is surely wrong.
In addition to the approach of Uber holding that workers would never truly agree to work without 'employment rights', we know also that 'freedom of contract' no longer applies to employment relationships because <exploitation, discrimination, and other undesirable practices>. Thus we have mandatory laws designed to protect people from entering into employment relationships that might turn out to be 'unfair'.
The relevant law in deciding who is a 'worker' states that a worker is any individual who works under:
Any 'worker' under that definition will get basic legal protection. Obviously, since reasonable people want 'protection', nobody can freely 'choose' to work without 'protection' and if they do, the agreement must be a sham.
In Uber the court found that the drivers were definitely workers as defined in s. 230:
Great care had been taken by Uber to define the driver in the contract as a ‘customer’, which would (they assumed) make it clear that they did not count as 'workers', but the court essentially held that although defined in the written contract as a ‘customer’ the written contract did not reflect the 'true agreement'. The 'true agreement' was to be derived from the facts, and the facts clearly showed that the drivers were not customers but workers.
Now, what is this 'true agreement', if not the agreement actually signed by both parties?
The point about the irrelevance of the 'label' has an element of common sense. If we could all escape legal obligations simply by carefully describing ourselves in a written agreement as something we are obviously not, that would make legal obligations pointless.
So, to state in the contract that Uber did not control its drivers would make no difference to the legal outcome if, in fact, Uber did direct and control the performance of the work to an extent that brought them within the scope of the legislation. This bit is not controversial. It is basic law that applies in many different areas, eg a landlord cannot pretend that he is not a landlord by describing himself as a 'licensor' in the written agreement, to avoid statutory landlord obligations.
The issue as to whether Uber in fact controlled the workers therefore became crucial to the outcome in this case. The court had no hesitation in finding the requisite degree of control based on many factors, for example monitoring the rate at which drivers accept or cancel work, and logging drivers off the app if they failed to accept at least 80% of the work offered to them while logged on.
The drivers were free to log on and off as they pleased and advised to log off if they did not wish to accept work, which would prevent them from being 'employees' (no duty to offer or accept work) but the court thought that there was still an element of ‘control’ exercised by Uber when they preventing drivers from remaining logged on to the app when they were not available to work. The system of rating drivers was also seen as an element of ‘control’.
In his lone dissenting voice of reason in the Court of Appeal, Lord Justice Underhill was certainly not impressed with Uber's 'egregiously ugly pieces of corporate-speak, tendentious definitions and lawyerisms' (what the blazes is a 'driver partner'?). Nobody could describe these contracts as elegantly worded.
Nevertheless, Underhill did not consider Uber's business model to be so patently unrealistic or absurd that their contracts must be disregarded and set aside as a sham. Nor did he think that it fell within the province of the courts to decide that Uber (and similar gig-economic firms) should be treated as an employer in relation to those who work for them in the context of the platform economy, where the parties have agreed that the relationship between them is not one of employment.
In other words, the parties' contract should not be set aside and disregarded as irrelevant to ascertaining the 'true agreement' between them, even if they say they didn't read it or they read it but they didn't understand it. Nobody forced them to sign a contract they had neither read nor understood.
This dissent placed much reliance on the fact that the appropriate scope of regulation in the gig-economy is a matter of controversy under parliamentary review:
If the matter is openly faced as a policy debate, that might allow all the arguments to be canvassed without an assault upon the fundamental liberty that each person enjoys, to enter into agreements regarding their working relationships on the terms and conditions they choose.
Of course, many workers feel that they are forced by economic pressures to enter into working agreements because the only choice open to them is: either sign on the dotted line or starve. I'm sure Uber doesn't let each driver-partner choose their own personal relationship with the app: everyone has to sign the same contract. So, this works exactly like the slavery of long ago, except worse because in its modern manifestations everyone who works for a living can claim to be an actual slave: a wage-slave.
However, if people were not held to contracts that they freely agreed, life would become quite challenging, especially if your transactions were quite complex and you hired a lawyer who used too many suspicious 'lawyerisms' in drafting the contract. It seems, from what the employment tribunal said, that the very complexity of the contract would be likely to render it vulnerable to being cast aside as a sham: you must be trying to hide something (see 'exploitation, discrimination and other undesirable practices', above), otherwise you'd have put the point plainly and simply on no more than one side of A4 paper double spaced. 'Methinks the lady doth protest too much', intoned the tribunal when it saw Uber's lengthy and over-complex contracts, and the Uber executive who stood to defend her firm was described as 'grimly loyal' because let's face it, anyone with the temerity to stand up and defend those contracts in court must be constructed of stern material [Editor: she did eventually quit].
This then is a case about contracts, new technology, and new ways of organising business affairs that make the old ways of thinking very difficult to apply to evolving business models in the platform economy. When the new business model doesn't fit the old legal constructs, the correct approach is not to say that the new business model is not realistic and must surely be predicated upon a sham because it doesn't fit our legal categories. When the new reality doesn't fit our tired legal classifications, the better approach is to acknowledge that sometimes, new technologies will make possible interactions that were not previously possible, and new ways of thinking about those interactions are then required.
Now, Uber had a contract with the drivers under which the drivers agreed that they are offering their services as 'partners' or independent contractors. There are two possible ways such contracts can be challenged by a 'partner' who claims that in fact they are a worker and entitled to legal rights granted to all workers:
1. By arguing that the contract is a 'sham', and although the contract clearly and expressly states that the drivers are independent contractors, that contract was merely a device intended to create smoke and mirrors obscuring the true facts (Autoclenz Ltd v Belcher  UKSC 41).
2. By arguing that although it was agreed that the drivers are business 'partners', as a matter of legal interpretation the drivers are in fact workers, and so the label put on the relationship by the contracting parties is irrelevant. To use the example courts like to use, a cat does not become a dog simply because two people have agreed in their contract to call it a 'dog' and carefully refer to it at all times as a dog. A cat is a cat is a cat (even in cases where your cat wrongly thinks it's a dog, which happens more often than you'd think).
These lines of reasoning work very well when you're trying to identify ducks, cats, dogs, and such creatures whose features are scientifically identifiable (or used to be, anyway, before science became all about expressing acceptable opinions). That approach works less well when you're faced with complex commercial contracts, especially when the contractual relationship is conducted through the interface of new technology that transforms the relationship from its traditional form into new ways of interacting. In this situation, it's not really good enough for judges simply to say 'well, it looks very much like an employment relationship to me'.
In this case the drivers argued that they are workers at any time when they are available to drive for Uber.
Many employers do not like having to pay their employees simply because they've shown up to work, if they're not actually doing anything productive: a phenomenon known as 'presenteeism' - i.e. I will be paid because I was present at my workplace during working hours, and whether I actually did anything of use to my employer during that time is irrelevant for purposes of deciding whether I'm entitled to collect my wages. So it's not surprising that a business model which allows Uber to agree with drivers that they are not being 'employed' and will earn their own fares as independent contractors is attractive to Uber. But is it lawful?
Long ago, before Uber emerged from a formless void and proceeded to shake everything up, the legal relationships surrounding taxi drivers were quite clear:
As pointed out by Underhill LJ, this is one example of the many different ways in which the legal relationship between the firm, the driver and the passenger could be constructed. The question is whether, by offering the app that connects the driver to the passenger, Uber has now become the employer of that driver even though they agreed only to serve as agent connecting driver with passenger. After all, if eBay provides a platform for me to sell stuff, eBay does not become my employer. So far, the majority opinion of the courts is that yes, looking at the matter realistically (i.e. applying the duck test) the way the Uber platform operates makes Uber look very much like the employer of those drivers. eBay doesn't look like the employer of the various sellers, but Uber does indeed look like the employer of the various drivers. We know this because of the duck test: when I see a goose coming along, I can immediately see that it's not a duck. It's all about how realistic the thing looks, when it is masquerading as something else.
What about the contract, that was carefully constructed to make it clear that the drivers were acting as independent contractors? Is it relevant, at all?
Scholar, Writer, Friend