Workers’ rights – the Uber ruling

Written By: - Date published: 8:26 am, October 30th, 2016 - 34 comments
Categories: business, class war, economy, labour, workers' rights - Tags: , , ,

Technology has driven huge changes in the nature of work, and the rate of change shows no signs of slowing. As one aspect of this, the web and ubiquitous mobile computing has created whole new models of the relationship between demand and supply, as exemplified by the Uber (or Airbnb) business model.

In some ways the Uber model makes perfect sense – convenient and flexible, an efficient use of resources. The problem that emerged was the treatment of the drivers – are they contractors or workers? A landmark decision clarifies this question in the UK and sets a very useful precedent:

Uber loses right to classify UK drivers as self-employed

Landmark employment tribunal ruling states firm must also pay drivers national living wage and holiday pay with huge implications for gig economy

Uber drivers are not self-employed and should be paid the “national living wage”, a UK employment court has ruled in a landmark case which could affect tens of thousands of workers in the gig economy.

The ride-hailing app could now be open to claims from all of its 40,000 drivers in the UK, who are currently not entitled to holiday pay, pensions or other workers’ rights. Uber immediately said it would appeal against the ruling.

Employment experts said other firms with large self-employed workforces could now face scrutiny of their working practices and the UK’s biggest union, Unite, announced it was setting up a new unit to pursue cases of bogus self-employment.

The Uber ruling could force a rethink of the gig economy business model, where companies use apps and the internet to match customers with workers. The firms do not employ the workers, but take commission from their earnings, and many have become huge global enterprises. Uber now operates around the world, with the company valued at more than £50bn.

The decision of the employment tribunal comes amid mounting concern within government about the growing trend towards self-employed workforces. The government has recently announced a six-month review of modern working practices and HMRC is setting up a new unit, the employment status and intermediaries team, to investigate firms. …

A victory for workers and their rights. See also: Uber ruling is a massive boost for a fairer jobs market.

It is worth noting once again that the only party in NZ actively monitoring and exploring issues like this is Labour with its Future of Work Commission.

34 comments on “Workers’ rights – the Uber ruling”

  1. Ad 1

    Hey all you NZ Uber driver suckers: Unionise!

    • Sacha 1.1

      The only reason you’re seeing local stories is because they have formed a drivers’ association, with support from First union.

      • Ad 1.1.1

        NZTA have been working on the Uber problem for some time now. The Minister has commented on it regularly.

        Would be great to here Andrew Little of Labour saying in black and white: “All Uber drivers should unionize.”

        At moment we don’t have anywhere near the same kind of legal framework in New Zealand that they do in the UK. The Peter jackson case against contracted workers is the closest, and it seriously needs looking at again.

  2. James 2

    In NZ anyway every Uber I have taken has been a normal taxi picking up additional work (not exclusively a Uber driver).

    I wonder how this works – who would be their main employer ?

    • One Anonymous Bloke 2.1

      Don’t worry your little head about it: the IRD employs people who will be able to work it all out for you.

      • James 2.1.1

        What a stupid reply.

        If I’m employed by a company paying me a wage – I won’t be allowed to work for other people in my contracted time.

        Thus it will cause workers to choose one or the other.

        • One Anonymous Bloke

          Or the other employer who understands how the market works these days. Don’t worry, someone who isn’t you will figure it out and show you the way.

        • Draco T Bastard

          The supposed benefit of having independent contractors is that the contractors can work for multiple businesses thus improving efficiency as it allows people to work where the work is. If you think about it it’s actually more expensive because the short term work now has to cover time when the contractor has no work as well as pay for the increase in the number of accountants and other support work that the contractor needs that the business would normally do.

          The problem is that many businesses don’t want the people who work for them to work for other businesses and put into the contract restrictions on the ‘independent contractor’ which, of course, means that the contractor is now dependent. Under such conditions then the worker should be paid for a forty hour week by that employer because they’re actually an employee.

        • Lanthanide

          What are you even wondering about?

          If someone has a full time job as an employee, and then has a part time job afterwards, then they have two jobs.

          Perhaps the second part time job is on a contractor basis. It’s still a job. That whole point of this course decision (and subsequent developments) is that Uber drivers may be declared not to be contractors, but part/full time employees.

          I don’t know why you’re worried about “main employer” because such a concept is irrelevant to what is being discussed (in fact, it is irrelevant for the vast majority of employment law).

          • james

            “If someone has a full time job as an employee, and then has a part time job afterwards, then they have two jobs.”

            Of course that makes sense.

            However with Uber thats not how it works.

            People go out and work for ABC taxis. They sit on ranks and get hailed as driving along with their light on.

            They also have uber on their phone. When they pick up the Uber job, they turn off their light and complete it. Then they go right back to being a taxi.

            If they were being paid per hour by either – they would not like someone working for someone else at the same time (when being paid by them).

            Quite different to two different jobs at different times.

            • Lanthanide

              If the taxi company is not paying them per hour, and they ARE employees, why would you think if they’re employees of Uber they’d be forced to pay per hour, when taxi companies already don’t?

              • james

                What makes me think Ubre would be made to pay them ?

                I dunno – the post we are commenting on perhaps: “Uber drivers are not self-employed and should be paid the “national living wage”, a UK employment court has ruled in a landmark case which could affect tens of thousands of workers in the gig economy.”

                • Lanthanide

                  So again, if taxi drivers are employees, and are NOT paid by the hour in New Zealand (as is the case), why would Uber drivers, if they were made to be paid employees, have to be paid by the hour in New Zealand?

            • Jono

              Uber drivers cannot work under a taxi sign. They have to remove all signage before accepting Uber jobs.

              • Lanthanide

                I’m not surprised by this, I figured james was talking out his arse but wasn’t sure.

              • james

                That may be the rule – but in practice it does not happen. I caught an Uber on Saturday that was a taxi – again with just the light out.

  3. Draco T Bastard 3

    You know what?

    That’s not actually the problem with Uber. The problem with Uber is that it was a capitalist owned enterprise and as such it benefited the bludging shareholders rather than the drivers while bypassing many laws and taxes.

    And, no, there’s nothing wrong with workers being independent contractors although I think that they’d all be better off joining a cooperative.

    There’s two solutions to Uber and other similar businesses that use the same business model,

    The first solution is that the servers and software belong to the drivers and the people who maintain it are employed by the drivers on a fixed wage. The drivers would be a cooperative and they’d have direct control over their conditions, how much they charge for a ride and how much they get paid. Likely that the IT guys would also be part of that cooperative.

    The second, and probably most efficient, solution is that the government owns the service and makes it freely available to anyone who wants to use it. It would be paid for via the drivers taxes.

    • Lara 3.1

      If everyone who comes up with a new idea, and in our new digital world apps are the big new ideas, has it taken away from them and made a co-operative or taken away from them and the government owns it, then I’m pretty sure entrepreneurs aren’t going to put money into creating new ideas.

      It takes hours blending into months of work, and a lot of money to create apps like this. They don’t magically appear out of nothing. That’s many hours people put into development for no pay, hoping their idea is good enough to one day make them money.

      If you manage to be successful with your idea and it’s then taken away, how many new ideas do you think would become reality?

      Please do not misinterpret my comment as stating that Uber is just fine, I don’t think how they treat their drivers is just fine at all.

      I think this ruling is just and reasonable. I think minimum employment rates and standards are essential to prevent workers from being exploited.

      • Draco T Bastard 3.1.1

        then I’m pretty sure entrepreneurs aren’t going to put money into creating new ideas.

        I’m pretty sure that it would have been created anyway.

        Here’s a question for you: Who came up with the idea for Uber and developed it?

        Because I can guarantee one thing: It wasn’t the shareholders who are now exploiting the drivers.

        It takes hours blending into months of work, and a lot of money to create apps like this.

        Yep, true.

        That’s many hours people put into development for no pay, hoping their idea is good enough to one day make them money.

        Nothing stopping them from making money. It’s more a question of who’s paying them.

        Also, do you truly have any idea of how many apps, games and other software that gets created on spec that doesn’t produce any income for the developers?
        I use one called Groboto which was developed for many years and only stopped after the lead developer came down with leukaemia. It cost the developers quite a bit of money to do that. The two points about it was that they did it anyway and that they never had a guarantee of income from it.

        BTW, this is one of the reason why I support a UBI. It would free up people to develop stuff rather than going to BS Jobs.

        I think this ruling is just and reasonable.

        I don’t because it entrenches the present failed paradigm of exploitation.

    • Jono 3.2

      Not too many coop’s around now mostly private companies. But coops could make a big come back soon if Uber fails.

      • Draco T Bastard 3.2.1

        Coops are private companies and there’s actually quite a few of them. Last I looked there’s about 50000 in NZ.

        IMO, Coops would be a much bigger part of the economy if people were actually taught about them. It’s lack of knowledge that has people looking for traditional jobs. People simply don’t know that there’s something better out there.

        • Gordon

          I seem to recall if you are a co-op the accounting standards (developed of course by the big accounting firms that like private business and not co-ops) have a number of rules designed to make life difficult for co-ops. Perhaps an accountant might comment.

  4. red-blooded 4

    The taxi industry is also worth thinking about. Many firms classify all their workers as contractors (with some owning more than one car and employing others or subcontracting to them). It’s a model that gives no security of income, encourages dreadfully long hours and also fails the passengers because the drivers pretty much work the shifts they choose, leaving some really underserved.

    • Lanthanide 4.1

      I thought one of the requirements for a taxi company is that they have to have coverage of certain times of the day, and meet requirements about having vans available for wheelchairs, and taking pensioners with gold cards etc.

      • red-blooded 4.1.1

        There’s a big difference between “coverage” (which might be 2 cars on the road, with waits of 20+ minutes) and adequate coverage. As for vans with wheelchair ramps and hoists, I don’t think these have to be available at all times. Besides, my main point remains, which is that most companies class taxi drivers as contractors, even though they can’t drive for any other company.

  5. I’m dubious about this. Employers are having a field day turning employees into contractors, and the biggest success in fighting it so far is in a field in which the people involved aren’t actually employees. That could actually do more harm than good.

    • One Anonymous Bloke 5.1

      Let’s hope this “biggest success” lasts a bit longer than the decision in Bryson vs. 3ft6.

    • UncookedSelachimorpha 5.2

      ” the biggest success in fighting it so far is in a field in which the people involved aren’t actually employees.”

      The whole point of the Uber ruling is that they are employees, after all.

      • Psycho Milt 5.2.1

        I’m sure some of them would like to be employees, but there’s a quid pro quo in the employer/employee relationship: the employer gets to say when and where you’re going to work. There are a lot of Uber drivers who won’t want that.

        If this ruling means that Uber has to make drivers employers if it wants them to work a particular number of hours, great. If it means drivers who want to do a few hours of their choosing outside their day job must make the commitment of becoming an employee, not so great.

        • Lanthanide

          “the employer gets to say when and where you’re going to work”

          But, they don’t have to.

          I’m sure if the courts/government forces Uber to treat all their contractors as employees, then Uber might like to take up that right as part of the arrangement.

          Casual contracts, where work is by mutual agreement of both parties, and the employer cannot punish the worker for failing to work, are perfectly legal. That is really what the whole 0-hours contracts thing with fastfood workers was all about – the employers were treating the employees as if they were on a casual contract, but with the extra fishook that they had to work when requested, which doesn’t apply to a casual contract.

          • KJT

            “The fish hook that you have to work when requested, which doesn’t apply to a casual contract”.

            In reality almost all the young people i know are on “so called” casual contracts, but if they do not work, when told to, they lose the job.
            The current power imbalance means they have to accept the reality of being on call 24/7 even though the employer only pays for actual hours worked.
            Turning up and being told you are not required today is common.
            Rosters are only given out on the same week for most, even though the employer knows the requirements months ahead.
            All these sort of tricks makes for employees who are unable to take a second or third job. And employers who get an, on call, 365 days a year work force without paying for it. Totally powerless because of reductions in hour. if they make trouble, plus 13 week standowns if they quit.
            What makes it even worse, is that WINZ are forcing people into 12 hour a week guaranteed, or less, mcjobs.

        • KJT

          Most of these casual contracts, the employer does get to say when and where you work, but they get away with paying minimum wage rates, for only hours worked, and still having employees on call all the time.
          Imagine what that does to family life, income and the ability to earn money elsewhere.
          That was what the Ports of Auckland lockout was all about.

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