As companies like Uber, AirBNB, Deliveroo and others continue to disrupt traditional business practices, SOR Solicitors examine the impact of the “on demand" economy on employment law in Ireland.
The Guardian recently reported on a UK employment tribunal case against Uber, which is set to cast light on some of the grey areas in employment law created by companies which allow individuals to trade goods and services freely. The explosion of a ‘gig’ economy – an environment in which temporary positions are common and organisations contract with workers for short-term engagements - has come about with the rip-roaring success of technology companies such as TaskRabbit, Deliveroo and AirBNB, and is rapidly re-shaping the landscape for businesses. Employment law has not yet caught up with this fluid, evolving economy and the need for clarity in this area has been apparent for some time. The case against Uber (an app which allows individuals to offer an ad-hoc taxi service) has employment law and HR professionals waiting eagerly on an outcome that could finally clear up the murky definition of the term ‘worker’ in the UK and set a precedent for future employment tribunal cases across all sectors of industry in Ireland.
The Case Against Uber
Uber operates a taxi hailing platform that connects passengers to both licensed and unlicensed drivers via smartphone app technology. The assertion made by Uber that drivers are ‘partners’ and not ‘workers’ is being contested by GMB, the trade union for private drivers in the UK. The UK has three types of employment status: employee, worker, and self-employed, as opposed to the two we have here in Ireland (employee and contractor). ‘Workers’ in the UK have fewer rights than employees, however, they are still entitled to other rights such as the National Minimum Wage, holiday pay, anti-discrimination and pay deduction protection – all of which self-employed ‘partners’ are not entitled to. GMB argue that Uber drivers do not fit within the definition of a self-employed person as their drivers are penalised for not responding to customer alerts, and are not allowed to pick and choose the jobs they want to do as the destination of the hires are not revealed until the job has been accepted by the driver.
What are the Implications for Uber?
In Ireland, Uber are already in tough competition with Hailo, a licensed taxi hailing app, who are thriving under the current rules which forbids unlicensed taxi drivers from working. It was also revealed recently that Hailo and German app developers MyTaxi have now merged. MyTaxi, owned by German manufacturing stalwarts Daimler, currently operate in Germany, Australia, Italy, Poland, Portugal and Sweden, and are determined to beat Uber worldwide to become leaders in the field. It is, therefore, unlikely the Uber case will have a big impact on the cab industry here. In the UK however, it is likely if Uber lose the case that they will have to fall in line with a model more along the lines of Hailo if they are to survive.
Legal Implications for Businesses in Ireland
It is probable the outcome of the case could have some influence on future determinations by authorities including the Department of Social Protection, the Revenue Commissioners and the Irish employment tribunals when determining whether or not a worker is an employee or a contractor. In the absence of a test for establishing whether an individual is an employee in Irish legislation, the courts and tribunals have developed criteria over the years to determine employment status which consider the reality of the relationship between the parties. Decisions are made on a case-by-case basis. A recent decision in Ireland saw workers defined as ‘employees’ on the basis that they were provided tools and clothing for the task they are undertaking, and importantly, that the individuals were not in control of the hours they worked or the type of work they performed. This recent broadening of the term has brought the Irish definition of employee closer to that of the UK’s definition of worker, in which case the UK Uber case could be highly persuasive in future Irish decisions and can have huge implications in not only gig economy, but across the board, particularly in healthcare and the care services industries where much of the work is carried out by individuals who currently fall under the current definition of contractor. On the other hand, the recent case in California against Uber may also be considered (the case confirmed Uber drivers as self-employed contractors) however, US law is only of limited persuasive authority in Ireland.
If GMB win their case, there will be an immediate impact on Irish technology companies looking to take advantage of the gig economy across Europe. Business models will have to be developed to comply with employment law changes in the UK should they want to roll out their business in the UK territory.
We are undoubtedly living in interesting times, with the pace of technology having a marked influence on people’s lives and the way we work, it’s no wonder the law is struggling to keep up. With the recent boom in self-employment, the need for a review of the protections afforded to the self-employed has been pressing for some time, with problems only exacerbated by the growing gig economy. It is important the level of protection we have built up over the years for individuals at work is maintained. It is also crucial that employers have a very clear understanding of their obligations at the outset of any work relationship in order to minimise conflict. Hopefully the outcome of the Uber case will help to trigger much-needed development in this area of law.