12 - Krista Ellul

Krista Ellul Employment and the Gig Economy

Dr Krista Ellul graduated as Doctor of Laws at the University of Malta in November 2013 and has obtained her ACCA qualification in December 2015. Krista is actively involved in corporate restructuring and M&A, and her main practice areas are commercial and corporate law, and employment law. Krista is a senior associate with David Zahra & Associates Advocates. Krista lectures the Business and Corporate Law Module (F4 ACCA Module), lectures on Maltese Employment Law with Lead Training Services and Company Law with the Malta Institute of Taxation. This article reflects her opinion at the time of writing, being October 2019.

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1. Introduction:

W

hat is the gig economy? Upon googling the definition of the gig economy, one comes across the following definitions ‘a labour market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs’, and ‘working in the gig economy means constantly being subjected to last-minute scheduling’.1 On the other hand, the Google definition of the collaborative economy is ‘business models where activities are facilitated by collaborative platforms that create an open marketplace for the temporary usage of goods and services often provided by private individuals’.2 These economies have grown substantially over the last few years and this has opened questions to be answered: how should the workforce of companies operating within such industries be characterised? Are persons working within these growing economies, to be characterised as employees of companies with whom they are engaged to carry out services or shall they be deemed to be self-employed? Alternatively, is there some sort of status characterisation that falls between the two?

In order to answer these questions it is imperative to understand whether the companies running collaborative platforms, such as Uber and Deliveroo for example, are seen to be the providers of the services being provided over the platforms (that is taxi services or delivery services) or whether they are seen to be simply as intermediaries. Companies often argue that their service/product is the collaborative platform which connects the service provider to the customer, and that therefore the taxi service or delivery service are not being provided by them. The relationship between the service providers and the platform operators, as well as the relationship between service providers and the platform operators with the customers need to be delved into deeper in order for such questions to be addressed.

Companies forming part of this economy are striving to (often by engaging armies of lawyers) ensure that their arrangements with persons 1 ‘Definition of gig economy in English’ <https://www.lexico.com/en/definition/gig_ economy> accessed 28 August 2019.

2 European Commission, ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – A European agenda for the collaborative economy’ (2016) <https://eur-lex.europa. eu/legal-content/EN/TXT/?uri=COM%3A2016%3A356%3AFIN>

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Maltese law is silent and does not offer guidance as to how persons providing services over these platforms should be categorised. Their employment status is not the only lacuna at law as this is just one matter of unclarity; various other matters remain unaddressed. Firstly, the need for certain authorisations is questionable. With many of these new companies operating in traditional industries such as delivery, postage, cleaning and taxi services – the need for certain authorisations and licences is questionable.

A prime example of this is a delivery company which delivers food – what standards must be upheld in this regard? Does the person who logs into an app for an hour or two on a Saturday night as available to deliver your Chinese take-out need to have applied as a food business/premises and undertaken a food handling course? When reading into the applicable Maltese laws in this regard, it seems that such requirements would apply to such persons – however, is this not an overkill? Moreover, would it be the company that would need to apply for such licenses/authorisations or each person who logs into the app? From my understanding, yes, there is the need for certain standards to be upkept however, the laws need to be kept proportionate and necessary for the purpose that they are serving. Legislators must delve into these laws and analyse whether the current laws are relevant for emerging industries.

The second matter which requires clarification is that of liability. This has been addressed for certain industries under EU Law. Under EU law, it is clear that companies providing information society intermediary services, which carry out solely hosting services (their conduct being merely technical, automatic and passive), are exempt from liability for the information they 241

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store.3 One also questions the applicability of EU consumer and marketing laws â&#x20AC;&#x201C; are these to be imposed on persons who perform one off taxi rides over a platform? In addressing these matters, one must keep in mind two points: the protection of the consumer on the one end (which is the purpose of these laws in the first place) and the proportionality on the other hand.

Most collaborative platforms provide for certain trust mechanisms such as rating systems which aid the protection of consumers. The last issue that must be tackled is that of taxation (being personal and corporate tax, value added tax or social security contributions). The lack of a clear classification of persons providing services within such industries renders it difficult to determine their tax status and therefore who the taxpayer is, and what the taxable income is.

Upon casting a critical eye on the applicable rules, rights and obligations of the players within this market, it is evident that there is a lack of clarity and uncertainty. These grey areas, affect both players in this industry as well as public authorities which may hamper the development of these industries and possibly result in the abuse of such grey areas in the law, thus going against the will of the legislator who was trying to protect public interest and safety.

The growth of these industries renders clarification of these issues as more critical than ever before. Countries are slowly starting to legislate and address these issues accordingly, and courts are being called upon to give guidance on these matters. The scope of this article from here onwards is to delve into the employment status of persons providing their services in these industries, with specific attention to collaborative platforms.

2. The GIG Economy Firstly, the article is going to tackle the subject matter from a Maltese law perspective. Maltese employment law does not cater for this industry specifically, and neither has the Maltese Industrial Tribunal delivered any judgements in this specific regard as at the date of writing. Having said that, the law does shed some light in order to guide one into determining whether a person should be deemed to self-employed or employed, through The Employment Status National Order (S.L. 452.108). This legal notice includes 3

European Commission (n 2) 7.

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eight ‘tests’ and should five of the eight tests be satisfied one is presumed to be an employee of the entity at hand and would accordingly be subject to the same wage and conditions to that of a comparable employee. The eight tests are as follows: (a) he depends on one single person for whom the service is provided for at least 75% of his income over a period of one year; (b) he depends on the person for whom the service is provided to determine what work is to be done and where and how the assigned work is to be carried out; (c) he performs the work using equipment, tools or materials provided by the person for whom the service is provided; (d) he is subject to a working time schedule or minimum work periods established by the person for whom the service is provided; (e) he cannot sub-contract his work to other individuals to substitute himself when carrying out work; (f) he is integrated in the structure of the production process, the work organisation or the company’s or other organisation’s hierarchy; (g) the person’s activity is a core element in the organization and pursuit of the objectives of the person for whom the service is provided; and (h) he carries out similar tasks to existing employees, or, in the case when work is outsourced, he performs tasks similar to those formerly undertaken by employees.4 Moreover, the law stipulates that an employee may, prior to entering into an agreement to provide any services, request an exemption in this regard from the Director of Employment, who will issue such exemption if there are grounds to do so. Examples of such grounds as per law include when the activity being carried out is an uncommon occurrence or for a 4

Employment Status National Order, S.L. 452.108.

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very short duration. The law makes it abundantly clear that each scenario must be analysed on a case by case basis in order to assess whether a person providing services to a company would satisfy these conditions.

A first rule to follow in this regard is that of substance over form; it is the actual arrangements that are in place in practice which are to be looked into and not the wording in the contract. It is practice for companies to carefully word their contracts in a way to ensure that the tests mentioned above are not met, however the test of the law applies with regards to actual working arrangements rather than any agreement. ‘Worker clarification always has been a legal determination and not a creature of contract or a matter of private agreement’.5 In some countries, such as Switzerland, it is interesting to note a contract is not necessary for obligations under employment law to kick in.6 This rule is also evident in case law with courts always looking into the reality of the arrangement over and above the contractual terms.

Another grey area in relation to the gig economy and employment in Malta is whether a person providing services over a collaborative platform be deemed, in light of the above tests, to be an employee. The employment laws in place are not apt to clearly cater for the flexible working arrangements and so called ‘zero-hour contracts’ which are increasing in frequency and popularity. That is to say, even if persons providing services over such collaborative platforms are classified as employees under our law, our law is not equipped to cater for such arrangements. These issues include the problems when it comes to calculating one’s leave entitlement, social security contributions and other entitlements if employees are working under zero-hour contracts. Employees under these contracts may technically not work any hours but are still deemed employees of the company. The general understanding is to apply such benefits pro-rata as in the case of part-time workers, but this is not as simple in practice given the flexibility and unpredictability of working times.

Insight has been provided through Transport Malta. The entity has recently recognised and addressed the fact that the current frameworks within the transport sector do not cater for standards to be followed by 5 Lucy Trevelyan, ‘The gig economy: a new global battleground’ (IBA News, 11 April 2018) <https://www.ibanet.org/Article/NewDetail.aspx?ArticleUid=CBA4C174-2A35-4E5F-A278 -9255C1C2577E> 6 Mark Freeland, Jeremias Prassl, ‘Employees, workers and the ‘sharing economy’ Changing practices and changing concepts in The United Kingdom’ (2017) 6(1-2) Spanish Labour Law and Employment Journal <http://doi.org/10.20318/sllerj.2017.3922> accessed 28 August 2019.

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drivers working within the collaborative economy. In September 2019, Transport Malta issued the Public Service Garage Reform for public consultation7 in order to regulate the registration and licensing of chauffeurdriven vehicles, vehicles for hire or lease, and operators of such vehicles.

Two sets of regulations are being proposed: those governing chauffeur driven vehicles and another governing the rental of vehicles. Operator licences will be mandatory, and several requirements must be fulfilled to obtain the licence. Driver requirements have been introduced, including the requirement to undergo training and vehicle and service requirements have also been included.

The proposals note the growth in the use of digital platforms and the challenges this is posing for policy makers and legislators to ensure safety of passengers together with recognising that service providers are operating on par with other traditional service providers. It is stated in such proposals that ‘such digital platforms will be required to either acquire an operator’s licence under the new regime and abide by all the licencing conditions, or serve as an intermediary booking service platform solely for licensed operators, and not for drivers – even if such drivers are professionally licensed’.8 In accordance with such proposals, intermediary service providers will still have certain obligations under the new regime, including the need to register as a transport booking service with the Authority, have an office in Malta at which they are to keep all information and ensure customers using the app service are given information on the operator with whom they are booking a service when using the app.

Moreover, the need for drivers to be employed by the operator licence holder has also been extended to drivers providing services over digital platforms. This being proposed in order ‘to curb current practices where such platforms are marketing and offering their services to a new breed of ‘self-employed’ drivers who have no employment or contractual relationship either with the platform itself or with the operators whose permit the vehicles used are licensed’.9 It is to be noted that drivers can be employed by more than one operator. Therefore, it is clear that through these proposed laws the legislator is implying that the drivers must be employed 7 Ministry for Transport Infrastructure and Capital Projects, ‘Public Service Garage Reform’ <https://www.transport.gov.mt/PSG-Reform.pdf-f4142> accessed 11th September 2019.

8 Ministry for Transport Infrastructure and Capital Projects (n 7) 10.

9 ibid.

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by an operator.

Looking outside of Malta, Californian legislators recently passed a bill which classifies all persons engaged with app-based companies as employees. This was despite the various attempts by such companies to be exempt or to strike some sort of mid-way deal (classifying the persons as workers and giving them certain rights). It is predicted that this bill is likely to increase costs of such companies substantially, and it will possibly result in a business environment where workers will not be as flexible with the companies, possibly having to rely on employees and pre-schedule their shifts.10 The main tests under this bill are twofold: does the company direct the tasks of the person it engages and whether the tasks carried out by that person form part of the company’s main business.11 On other fronts, Canada has introduced the term ‘dependant contractor’.12 Here the exclusivity is primarily examined in order to see whether a contractor is dependant or independent. Once one is defined as a dependant contractor certain specific rules would apply, specifically in relation to termination.

On the other hand, in Texas and Alaska, drivers for services like Uber are, under certain circumstances, excluded from being classified as employees.13 Under EU law the essential feature of an employment relationship is defined as follows: ‘the essential feature of an employment relationship is that for a certain period of time a person performs services for and under the direction of another person in return for which he receives remuneration’.

According to such definition the three essential criteria for an employment relationship to exist are (i) the existence of a subordination link, that is looking into whether the person acts under direction of someone else; (ii) the nature of work, that is the person providing the underlying service must be performing 10 Kate Conger, Noam Scheiber, ‘California Bill Makes App-Based Companies Treat Workers as Employees’ (The New York Times, 11 September 2019) <https://www.nytimes. com/2019/09/11/technology/california-gig-economy-bill.html> accessed 12 September 2019.

11 Kate Conger, Noam Scheiber, ‘California’s Contractor Law Stirs Confusion Beyond the Gig Economy’ (The New York Times, 11 September 2019 ) <https://www.nytimes. com/2019/09/11/business/economy/uber-california-bill.html> accessed 12 September 2019.

12 Trevelyan (n 5) 49.

13 Freeland and Prassl (n 6).

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an activity of economic value; and (iii) lastly the presence of remuneration.14 Lastly, in the US, the US Fair Labour and Standards Act defines a worker as someone who is ‘economically dependent’ on an employer, is one who has ‘suffered or permitted work’. This test typically consists of six related factors, which are: a) The extent to which the work performed is an integral part of the employer’s business; b) The worker’s opportunity for profit or loss depending on his or her managerial skill; c) The extent of the relative investments of the employer and the worker; d) Whether the work performed requires special skills and initiative; e) The permanency of the relationship; and f) The degree of control exercised or retained by the employer.15 On the other hand, the US courts then mainly focus on the economic reality test and ‘the ultimate question under this test is whether, as a matter of economic reality, the workers depend upon someone else’s business for the opportunity to render service, or are in business for themselves’.16 When analysing the above tests applied in different jurisdictions and in light of other studies it is abundantly clear that one of the main tests is the test of control. If the company is deemed to have control over the person then that person is inclined to be seen to be an employee. However, the question is: how much control is necessary for employment duties to attach? Within most of the tests mentioned above, one is left questioning what the parameters or rather thresholds are? How much dependence is necessary? What is deemed to be a substantial investment? Take the case of a taxi driver who buys a car, is that seen to be a sufficient investment, which would indicate that he is building his own business? On the other hand, take Uber, doesn’t the investment made by the company in setting up the company, as well as on technology, intellectual property and licensing 14 European Commission (n 2).

15 Jillian Kaltner, ‘Employment Status of Uber and Lyft Drivers: Unsettlingly Settled’ (Hastings Women’s Law Journal, 2018) <https://heinonline-org.ejournals.um.edu.mt/HOL/ Page?collection=journals&handle=hein.journals/haswo29&id=44&men_tab=srchresults> accessed 28 August 2019.

16 Trevelyan (n 5) 49.

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trump the investment made on cars by the drivers?17 Moreover, how much dependence is necessary – does one look into economic dependence or inequality of bargaining power here?

In order to obtain a better understanding of the thresholds of the above tests, we will now delve into recent judgements which have tried to interpret this.

Some of the seminal cases are those of the Uber judgements. Here the court reviewed the company’s business model and found that the taxi drivers providing taxi services over Uber’s app were workers (workers being an intermediate category entitled to some basic rights including minimum wage protection). This is despite Uber’s claim that they were not providing transportation systems but were in fact a technology services provider. The Tribunal in fact claimed that it is ‘faintly ridiculous’ to say that ‘Uber in London is a mosaic of 30,000 small businesses linked by a common platform’.18 The court found that Uber had too much control over the workers for them to be classified as self-employed. The court considered the influence the company had over the conditions under which the service was provided (for example the company determined the minimum fee), that the fees were received

by Uber and then passed onto the drivers, that Uber controlled the drivers conduct through for example the rating applications (whom could also be excluded from providing services or logged off the app for a period of time), that Uber controlled the quality of the vehicles, and that Uber also indirectly controlled the hours the drivers worked by structuring it in a way that only persons whom Uber is their main activity will be able to work and also by rewarding persons who worked long hours.19 The courts also noted that the driver was only given the first name of the passenger, would only know of the destination once the passenger was collected and were not permitted to pass on their contact details to passengers. Moreover, the driver was also expected to follow the route suggested by Uber and would have to justify any deviances.

17 Brishen Rogers, ‘Employment Rights in the Platform Economy: Getting Back to Basics’ (The Harvard Law & Policy Review, 2016) <https://harvardlpr.com/wp-content/uploads/ sites/20/2016/06/10.2_7_Rogers.pdf> accessed 8 August 2019.

18 Uber B.V. and Others v. Mr Y Aslam and Others, [2018] EWCA 2748 [2017] A2 3467, para 137.

19 Massimiliano Delfino, ‘Work in the Age of Collaborative Platforms Between Innovation and Tradition’ (European Labour Law Journal, 2018) <http://www.islssltorino2018.org/wp-content/uploads/2018/09/Delfino-Massimiliano_Szymanski-Charles-Francis-Xavier_Work-inthe-age-of-collective-platforms_between-inovation-and-tradition.pdf> 348.

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On the other end, drivers who supplied and maintained their own vehicles, were permitted to work with other organisations and did not need to wear any company uniform. Having said that, such freedoms were nothing next to the controls the company had over them and it was evident to the courts that the drivers did not have the opportunity to build their own businesses. The court found that the drivers do not and cannot negotiate with passengers and were in a dependent work arrangement.

Moreover, the courts also considered the fact that a driver was obliged to take on a job if they were logged into the app and in an area in which Uber operated - which showed that the drivers were at Uber’s disposal.20 The “ABC” test was introduced in the Dynamex case. This test requires the company to prove the following for the worker to be seen as an independent contractor: A. that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact, and B. that the worker performs work that is outside the usual course of the hiring entity’s business, and C. that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.21 The background of the term ‘worker’ was evaluated by the Court in the Pimlico Plumbers case.22 The term was introduced as ‘there were selfemployed people whose services were so largely encompassed within the business of others that they should also have limited protection, in particular against discrimination but also against certain forms of exploitation on the part of those others’.23 The court also looked into the current definition of the term worker at law, which includes: (a) An employee under a contract of service; 20 ibid 350.

21 Nathalie Whitson vs. Lyft inc [2018] 3:18-cv-06539, para 24.

22 Pimlico Plumbers Ltd and another v Smith [2018] UKSC 29, [2018] EWCA 51.

23 ibid, para 9.

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It was first questioned whether they performed the services personally, and therefore the court examined their right to delegate/ substitute themselves at their own will. It was questioned whether ones right to substitute one’s self under a contract, if only limited or occasional, would mean that this requirement would not be fulfilled, or whether it is enough if just part of the services needed to be performed by the person personally.26 In this case, it was noted that Mr Smith was allowed to be assisted in the job, and was allowed to substitute himself in the case that from his end another job came up. However, in such case Mr Smith had to substitute himself with another Pimlico worker, and with the consent of the company and therefore such right was seen to be limited. In this regard, the judge concluded that ‘the right to substitute another Pimlico operative did not negative Mr Smith’s obligation of personal performance. She held that it was a means of work distribution between the operatives and akin to swapping of shifts within the workforce’.27 It was noted that in other cases focus is made on what the dominant feature of a contract is, and in fact in the case of Mirror Group Newspapers 24 ibid, para 10.

25 ibid, para 4.

26 ibid, para 22.

27 ibid, para 2.

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Ltd v Gunning, focus was made on the fact that the contract did not require personal performance but required the carrying out of the job efficiently. It was argued that although looking into the dominant feature of the contract may help determine the relationship between the person and the company, it is seen to be important to delve deeper and look into the requirement of personal performance.28 Lastly, in this regard the court looked into the wording of contract entered into with the company and noted that all obligations were addressed to Mr Smith.

The Court then questioned whether Mr Smith was a customer or client of Pimlico, and in order to address this question looked into the contractual obligations the parties had towards each other when it came to offering and accepting work. It was clear that once Mr Smith took on a job with Pimlico, he was contractually obliged to carry out that work. It was noted that although the contract entered into between Mr Smith and Pimlico stated that he was under no obligation to accept any work, the manual Mr Smith had to also abide by laid down minimum working hours and times.

The Court referred to tests which arose from different judgements: 1. Judgement of Langstaff J, sitting with others in the appeal tribunal in Cotswold Developments Construction Ltd v. Williams [2006] IRLR 181, para 53: a focus upon whether the purported worker actively markets his services as an independent person to the world in general (a person who will this have a client or customer) on the one hand, or whether he is recruited by the principal to work for that principal as an integral part of the principalâ&#x20AC;&#x2122;s operations, will in most cases demonstrate on which side of the line a given person falls.29 2. Judgement of Lord Clarke in the Hashwani v Jivraj [2011] UKSC 40, [2011] WLR 1872, Supreme Court: whether, on the one hand, the person concerned performs services for and under the direction of another person in return for which he or she receives remuneration or, on the other hand, he or she is an independent provider of services who is nor in a relationship of subordination with the 28 ibid, para 32.

29 ibid, para 44.

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person who receives the services.30 3. Decision of the Court of Justice of the European Union FNV Kunsten Informatie en Media v Staat der Nederlanden (Case C-413/13) [2015] All ER (EC) 387: a service provider can lose his status of an independent trader … if he does not determine independently his own conduct on the market, but is entirely dependant on his principal, because he does not bear any of the … commercial risks arising out of the latter’s activity and operates as an auxiliary within the principal’s undertaking.

It follows that the status of ‘worker’ within the meaning of EU law is not affected by the fact that a person has been hired as a self-employed person under national law, for tax, administrative or organisational reasons, as long as that person acts under the direction of his employer as regard, in particular to freedom to choose the time, place and content of his work …, does not share in the employer’s commercial risks … and, for the duration of that relationship, forms an integral part of that employer’s undertaking, so forming an economic unit with that undertaking (...)’31 Pimlico tried to argue in this case that Mr Smith was entitled to reject work, was free to take outside work, and that the company did not interfere/ supervise his work. Moreover, they argued that he had an element of risk as he was bound by the quote he gave the client and did not get paid unless the client paid.

On the other hand, Pimlico had controls over Mr Smith - he had to wear a branded uniform, his van was to be branded and tracked, he had to carry a company identity card and follow instructions given by the company.

There were also controls on what he was paid and when. All these factors pointed towards him not being seen to be an independent contractor.

Lastly, I will delve into the Citysprint case,32 in which case the Court studied the relationship between Citysprint and a cycle courier, who claimed she was a worker. The Court considered the fact that one had to undergo a two-day recruitment process and training, as well as enter into a nonnegotiable tick-the-box contract with Citysprint in order to be able for the courier to provide its services over Citysprint’s platform. The court went on 30 ibid, para 45.

31 ibid, para 46.

32 Ms M Dewhurst v Citysprint UK Ltd [2016] 2202512.

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to look into how the services were to be performed and it was noted that the courier had no discretion as to how the services were to be provided. It was noted that the courier had to give her availabilities to the company and generally logged into the app early morning and then at night, with little time between assignments and informed the company before logging out.

The way the company worked was if workers were rarely available to work on a regular basis, they were not seen to be part of the team (most worked 4-5 days a week). In fact, most of the workers talked of work as days and not hours.

It was noted if one differed from their usual pattern, they would discuss this with controllers, and on certain occasions persons were even asked not to take a holiday given the company needed them to work during those days. The company also implied persons should work for at least three days a week to make it worthwhile for the company from a management point of view. The information booklet also states that should a courier reject work for five times in a row, they would be disengaged by the company.

Once workers were logged onto the system, they were expected to take on any jobs assigned to them. One time the courier felt unwell, asked whether she could go home, and was told she couldn’t as there was no one else for the job. She took on the job and stayed as she felt she was obliged to given in her eyes she was working for the company. Through analysing such facts, it was evident to the court that the company exercised control over the working time and pattern of the couriers.

The Court also considered that the couriers were paid per job, one week in arrears and this was calculated through a self-billing system with no interaction from the courier’s end. They wore a uniform and were provided some tools for which deductions were made from payments due to them.

The Court then looked into when the couriers had the right to substitute themselves and it was noted that reference was made to ‘our couriers’ and that the couriers did not have the right to substitute as the substitution clause was written in such a way that it was only couriers who were already on an assignment who could be substituted. Moreover, the complexity of the job allocation and payment did not lend to the couriers being able to substitute. It was noted that when the courier had asked for someone to substitute her, her request was turned down. Furthermore, the courier at hand did medical courier work, which work Citysprint was bound 253

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by a contract to provide and by means of which contract, Citysprint would be in breach should the courier be allowed to substitute herself. Lastly, it was noted that couriers could only be released from a job on a reasonable request, and no one could bring forward proof of when this was ever done.

In making conclusions, it was noted that the bargaining powers of the persons entering into the contract for service needed to be taken into consideration. In such case, it was evident that the bargaining power was not in any way as equal as it would have been should the parties entered into a normal commercial contract. It was stressed that this is a matter that always needs to be kept in mind when looking into the terms of contracts entered into, and that moreover that such terms may not reflect what happens in practice.

The Court also concluded that the courier was contracted to perform a personal service. The judge stated that ‘The legal test is not whether there is a valid substitution clause but whether the claimant was contracted personally to carry out the work’.33 One needs to look in whether the dominant feature of the contract was the personal service, or whether it was a particular outcome. In concluding whether Citysprint was a client or customer of the courier, the judge noted that there are two kinds of self-employed persons – those that carry out the services on their own account for their clients and customers, and others who carry out the services on behalf of a business run by someone else.34 The judge agreed that the courier was an integral part of Citysprints business, and that she was working on behalf of the Company this mainly based on the fact that the courier was: 1.

2.

3.

4.

5.

Expected to work when they say they will.

Directed throughout the time that they are on circuit.

Instructed to ‘smile with your greeting’ and wear the uniform.

Told what to do if the parcel cannot be delivered as instructed.

Told when they will be paid and paid according to the respondent’s formula after it has made deductions.

6. Told that they are part of the ‘family’ who the respondent describes as ‘our couriers’ on many occasions.35 A common factor in all these cases is that the courts did not find 33 ibid, para 71.

34 ibid, para 75.

35 ibid, para 78.

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them to be full employees, but rather self-employed persons entitled to basic benefits, that is falling within definition of workers. Claims for full employment status were interestingly not made or upheld. Such workers were only given the core basic rights and therefore would continue to experience certain disadvantages of such contracts including low income and unpredictable shifts, as well as unguaranteed work.36

3. Conclusion: Following the study of the different tests and cases in relation to determining that status of persons providing services over such platforms, it is clear that â&#x20AC;&#x2DC;It is the ambiguity between bi-partite and tri-partite classification systems which has come to have a crucial bearing upon the application of employment law to the on-demand economyâ&#x20AC;&#x2122;.37 A balance needs to be struck between individuals being seen to be employees on the one hand and being seen to be self-employed on the other hand.

These businesses are structured in a way where persons engaged with/by them are given more freedom, in one way or another, when compared to traditional employees and therefore it would not be seen to be fair or proportionate for the company to be obliged to comply with all employment laws. It would possibly be an overkill and therefore not entirely possible for businesses structured in such way: that is having some persons only working for a couple of hours, being subject to all rights and obligations under employment law. At the same time these persons would usually not be totally free to work and carry out the services as they wish and please, being subject to many controls introduced by such entities (as seen from case law) and therefore for this reason such persons should be entitled to certain benefits and rights.

The concept of a worker under English law seems to be the closest fit to such in-between category, giving employees certain minimum protections. The inclusion of such third category of worker introduced a â&#x20AC;&#x2DC;... category of worker to include not only employees as traditionally defined but also those working under semi-dependent or economically dependant 36 Freeland and Prassl (n 6).

37 Freeland and Prassl (n 6).

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personal work contracts’.38 Workers are seen to be self-employed persons but not working on their own account. Another in-between measure could possibly be the concept of ‘portable benefits’, that is individual persons providing services being able to buy-into benefits such as unemployment insurance, workers compensation plans and the like.

Most persons who work within the gig economy would say they find themselves torn, on the one hand wishing to be classified as an employee in order to benefit from all the benefits and rights under employment law and on the other hand do not wish to lose their status as independent contractors due to the flexibility that comes with such status. Having said that, certain companies have been structured in such a way and introduced so many controls over the persons offering services over their platforms that such flexibility is nearly not present and therefore in such cases it is clear on which side of the fence the persons working over their platform fall into.

Defining all persons providing the services over such apps as employees would probably lead the so-called workforce of the gig economy having to be reorganised, with persons having fixed shifts and being required to work for a number of hours. It would not be worthwhile for such companies to have such persons on their books (and provide them with all benefits and rights under employment law) for them to then be able to work as they wish and please and possibly only for a couple of hours here and there. The cost would definitely outweigh the benefit, and this can be clearly seen by Uber’s reactions to the recent introduction of laws in this regard in California.

The gig economy gives many flexible work opportunities for persons and it is therefore important that such industry is developed properly and that laws cater for such growing industry. It is essential for countries to ‘assess the adequacy of their national employment rules considering the different needs of works and self-employed people in the digital world as well as the innovative nature of the collaborative models; provide guidance on the applicability of the collaborative economy’. 39 Lastly, it is important to note that legislating the ‘gig economy’ would not exactly stop there – defining the employment status of such persons would have widespread implications on other more traditional forms of businesses which have been structured in a certain way for ages such as real estate agents.

38 Freeland and Prassl (n 6).

39 European Commission (n 2) 13.

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