Legal and business news analysis - Global Insight June/July 2021

UK Supreme Court finding against Uber answers questions posed by gig economy

Tech platform Uber announced in mid-March that it will be treating its UK drivers as ‘workers’ going forward, providing them with holiday pay and paying them at least the National Living Wage. The move follows a UK Supreme Court decision in February, which upheld a 2016 employment tribunal ruling finding Uber drivers to be workers, not self-employed contractors.

Uber’s CEO, Dara Khosrowshahi, said that the company is ‘turning the page on drivers’ rights’.

The decision to categorise its UK drivers as workers – with all that entails under UK employment law – is a significant change in Uber’s stance, one that could have ramifications for the wider gig economy in the UK and beyond.

At the time of February’s Supreme Court judgment – in Uber BV v Aslam & Ors – Uber originally played down the ruling’s applicability, stating publicly that it viewed the judgment as limited by the particular facts and contractual arrangements it had in place back in 2016. It highlighted that since 2016 it had modified these arrangements.

There were indications, however, that more claims were going to be brought against Uber following the Supreme Court’s ruling. UK law firm Leigh Day set up a dedicated website, driversclaim.co.uk, for exactly this reason.

Experts widely believed that the Supreme Court case was much broader, partly because it had taken a ‘purposive’ approach to the situation. If the protection of workers is the purpose of the legislation, then the Court can look beyond the terms and conditions of the parties and seek to protect workers if it can.

‘The main thrust of the judgment is that courts should look to the purpose of employment statutes; it is an exercise of statutory interpretation not contractual interpretation’, says Jason Galbraith-Marten QC, a senior barrister at Cloisters who represented two of the Uber drivers in the case.

Although there’s no hint of legislative change as a result of the Supreme Court case, it’s likely that Uber’s change of gear will have ramifications for the UK’s gig economy and how other companies in this area run their businesses. ‘They will feel that if Uber can’t defend these claims, then they are unlikely to be able to either’, says Galbraith-Marten.

Gig workers are a global phenomenon and this Uber decision could resonate in other jurisdictions. This is due to the fact that many countries do not have the classification of ‘worker’ and so in those places, people who work in the gig economy only have two options in law: either to be a fully-fledged employee or a self-employed contractor.

Peter Talibart, Council Member of the IBA Global Employment Institute and a labour and employment partner at international firm Seyfarth Shaw, says: ‘Because not all jurisdictions distinguish between “workers” and employees, this type of analysis is even more significant for gig economy businesses in countries where employees are extensively protected by law.’

Indeed, there are – and have been – a number of cases in jurisdictions such as California, Canada, France and Spain.

On a global level, Uber has argued in various white papers that its platform model has social benefits. For example, it suggests it is providing first jobs for migrant workers who are not able to find employment in the traditional labour market.

It has positioned itself as a champion in this space, for instance offering drivers in the UK free study tie-ins with The Open University. Its aim, according to its February paper, A Better Deal, is ‘to offer drivers the support and protections they deserve without risking the flexibility they desire’.

In its announcement in March, Uber continued this line, arguing that the worker status that it has now given to UK drivers ‘would seem to fit this framework’ of support and flexibility.

In the longer term, greater protection for gig workers is the direction of travel. In the US, the Biden administration is likely to pass a new law that would codify the test for when an independent contractor would be deemed an employee, and thereby make it easier to do so.

Philip Berkowitz, Council Member of the IBA Global Employment Institute and an international employment law expert at Littler Mendelson in New York, explains that ‘as the number of gig workers has grown, societal concerns about what happens to these people if they do not have rights also grows: many will not have health protections, pensions and so on. What happens to them when they fall ill?’

‘These are problems society will have to deal with’, adds Berkowitz. ‘At a policy level, to find greater protections is the likely trajectory.’

As governments grapple with how to handle these new ways of working, Uber’s decision to reclassify their drivers as workers will give them much food for thought.

Uber did not respond to Global Insight’s requests for comment. Uber’s legal representatives at DLA Piper and Blackstone Chambers declined to comment and did not respond to requests for comment, respectively.

Header pic: Shutterstock.com / Ink Drop

Climate crisis: Covid-induced economic woes hindering low-carbon transition

Katie Kouchakji, IBA Environment Correspondent

Despite global calls to ‘build back better’ following the Covid-19 pandemic, a recent UN report has revealed that just 18 per cent of recovery spending is going to measures that enhance sustainability.

The report, Are we building back better?, says that the largest window of opportunity for recovery spending is just opening now, and calls on governments to prioritise spending in energy, transport, building upgrades, energy efficiency, natural capital and research and development.

‘A one-dimensional focus on short-term economic recovery risks further exacerbating long-term social and environmental crises’, says the report.

‘The sense that we have is that we’ve won the rhetoric war – but we’re nowhere close to having a green economy’, says Ronan Palmer, head of the clean economy programme at London-based think-tank E3G. ‘The longer the pandemic goes on, the more governments may have to support the fossil fuel industry as that’s where the jobs are at the moment.’

He acknowledges this is a tough stance to take, but that the transition needs to be a managed process – while also cautioning that increased government debt leads to concerns about austerity measures. ‘This won’t help the transition either – they do need to invest in the transition’, Palmer adds.

Meanwhile, at the time of writing in May, it was still uncertain if the UN Climate Change Conferences of the Parties (COP26), currently due to take place in Glasgow in November, would proceed as planned. There’s speculation that it could either take place virtually or be postponed again.

Also of concern are ‘middle economic countries’, such as Brazil and Indonesia. As environmental regulations are starting to bite, governments may be tempted to roll them back, says Palmer.

The International Union for Conservation of Nature (IUCN) published a collection of papers in March, which found that the pandemic has severely affected nature conservation in several areas including reduced patrols, education and outreach and environmental protection rollbacks, among other reasons. One of the papers analysed economic stimulus packages and found 64 instances in 22 countries where environmental protection regulations were removed. These include proposals in India to ease environmental clearance processes for infrastructure projects, and permitting deforestation in protected areas in Russia and suspension of environmental impact assessments.

The researchers concluded that, ‘on balance, post-Covid economic stimulus packages and policies to date have undermined more than supported environmental protections’ and warned that in the long-term this could lead to damage to infrastructure or impinge on Indigenous people’s rights.

Guillermo Tejeiro Gutiérrez, Communications Officer of the IBA Environment, Health and Safety Law Committee and a director at Brigard & Urrutia in Bogota, says that ‘rollbacks on environmental regulations are always worrying’.

He also notes that the notion of building back better wasn’t talked about as much in Latin America. ‘Covid brought a lot of stress to a lot of people, and people are focused on trying to get back to their lives and try to survive’, says Tejeiro Gutiérrez, adding that, from an environmental law perspective, the principle of no regression means you cannot undo achievements and progress.

However, in Brazil, President Jair Bolsonaro and his administration have hastened the repeal of environmental protection regulations during the pandemic, including revoking mangrove protections in September 2020. Environment Minister Ricardo Salles said that the protections ‘stifled economic development’. The decision, however, was swiftly paused by a federal judge, citing ‘the evident risk of irretrievable damage to the environment’.

Throughout 2020, the same could be said of the US, under former President Donald Trump. However, since his inauguration in January, President Joe Biden has set about undoing Trump’s damage to environmental protections, using executive orders where possible, including cancelling the Keystone XL pipeline. His American Jobs Plan puts action on climate change at the centre, with measures to increase energy efficiency, enhance the electricity grid, cap orphan oil and gas wells, and expand the railways.

‘It’s the kind of large-scale investment you need’, says E3G’s Palmer.

In Australia too, it’s a different story. While Melbourne underwent one of the world’s longest lockdowns, the rest of the country has, for the most part, kept moving. Hospitality, tourism and the arts have been badly affected, ‘but most other service industries and building and construction didn’t miss a beat’, says Ilona Millar, a partner at Baker McKenzie in Sydney.

‘If anything, what we’ve seen with Covid-19 is temporary measures [in the planning system] put in place to allow certain development approval processes to be fast tracked and extend the time before approved developments lapse’, she adds. ‘It’s a lot more nuanced here – most of the Covid-19 response measures were temporary powers, not a complete reset of the system.’

Ultimately, says Tejeiro Gutiérrez, ‘we know the transition is going to happen – it’s just a question of when’. With sustainability at the top of the global agenda, he continues, ‘now is the time to make something out of it, so the green recovery discourse is very helpful’.