Regulation is not an À la Carte menu: insights from the Uber judgment – by Valerio De Stefano

Laws such as the National Minimum Wage Act were manifestly enacted to protect those whom Parliament considers to be in need of protection and not just those who are designated by their employer as qualifying for it.”

Image by Free-Photos from Pixabay

If we had to pick one among the many enlightening statements from the UK Supreme Court’s judgment in Uber, it would be this. It perfectly captures both the gist of the case at hand and the substance of the whole global debate on platform work. From the outset, the narrative driven by platforms was based on the notion that they were something entirely new in our societies. They were introducing entirely novel work models, made possible by technology, which could not be subject to the same regulation that traditional businesses had to observe. Their business model was not compatible with existing labour protection systems, and they would be instead the best positioned to determine which kind of protection they could grant to workers (only – they would not call them “workers”, but “drivers”, “partners”, “taskers”, “riders”, etc.).

The epitome of this narrative was the Proposition 22 solution in California. Platforms managed to impose it after spending 200 million dollars in ads to convince voters to roll back the inclusion of platform workers in labour and employment regulation, which was provided by the State’s lawmakers building on a landmark California Supreme Court. After Proposition 22, California’s platform workers are only entitled to minimum remuneration protection during rides, insurance, some health protection, limited reimbursement of expenses, and non-discrimination rights. The success of this initiative prompted platforms to wage an extensive global campaign to ensure similar solutions be adopted everywhere.

The Supreme Court’s statement from Uber above should serve as a reminder. It is not up to employers to decide when protection applies to those who work for them, as recently reminded by Jeremias Prassl. Employment regulation, we can add, is not an À la Carte menu. Employers cannot decide which bits and pieces of protection they cherry-pick so their business model is not disturbed. Allowing platforms to do so would have seismic effects, not only on this sector, but also on the entire economy. Why wouldn’t – then – restaurants, banks, retailers want to make their selection from the menu?

Moreover, in most European countries, some labour protection is mandated by the Constitutions and EU Law. This is often the case for collective labour rights, non-discrimination protection, minimum remuneration, annual leave and working time protection as well as occupational health and safety rights. Introducing specific, less protective statuses for platform workers along the lines of Proposition 22, is, therefore, not a lawful option unless we want to change national Constitutions and the EU legislation to suit them to the platforms’ business models – hardly a reasonable choice.

The Uber judgment by the Supreme Court is part of a series of decisions from judges and administrative bodies all over Europe that in the last few years dispelled the myth of platform workers’ entrepreneurship. France, Spain, Germany, the Netherlands, Belgium, Italy – they all saw Courts or labour inspectorates deciding that platform workers were entitled to labour protection. In most cases, platform workers were considered fully-fledged employees. The UK and Italian Supreme Courts found workers belonged to intermediate categories (and, on this basis, the Italian labour inspectorate threatened cumulative sanctions of up to 733 million Euro against the major food-delivery platforms).

The Spanish Tribunal Supremo, for instance,found that Glovo had established “a scoring system which, among other factors, is fed by the final customer’s assessment. The establishment of production activity control systems based on customer assessment is a favourable indication of the existence of an employment contract” (my translation). Through this system, therefore, the control exerted on workers was stringent enough to weigh in favour of the existence of an employment contract.

In a case concerning Uber, comparably, the French Cour de Cassation found elements of control compatible with a subordinate employment relationship in the platform’s power to establish the fare, monitor the ride acceptance rate, and impose a route to be followed. Similarly, the UK Supreme Court ruled in Uber that the platform’s monitoring of acceptance and cancellation of riders “plainly” places drivers “in a position of subordination to Uber”.

The findings of these bodies are all similar, even though the business practices of every platform may change. Workers have no choice in how much they charge customers – they work for the platforms and, in turn, platforms provide the service to clients. The platforms issue direct and extensive instruction on how work should be performed, and algorithmic metrics or customer ratings are used to monitor the workforce. Sanctions are issued in the form of temporary or permanent exclusion from the system or reduced access to future jobs. When all this is the case, the courts routinely find that it makes no sense to speak of genuine self-employment and exclude workers from labour protection only because they have the flexibility to choose if and when to work. This flexibility – as reminded by the UK Supreme Court – “does not preclude a finding that the individual is a worker, or indeed an employee, at the times when he or she is working”.

Employment protection, thus, can go hand-in-hand with flexible scheduling. The claim often advanced by platforms, that if protection applied the law would reduce flexibility, is a sham. Flexible working time would be allowable even if persons were qualified as workers or employees. Platforms would want us to believe they would not have a choice but to eliminate this flexibility. This is false – they would still be perfectly capable of ensuring flexibility if, as they say, their workers significantly value it. For instance, in Italy, Just Eat decided to switch its work arrangements to employment contracts while maintaining flexible schedules. Technology, after all, enables platforms to know by the second when a worker is logged on the system and available to work. It can thus be used to precisely calculate working time and compensation.

Another common claim platforms make whenever they meet a setback in court is that they have already addressed the elements that led to an adverse decision; algorithms are routinely tweaked and policies adjusted to eliminate the issues on which courts base their decisions.
What emerges from the never-ending series of judgments on the employment status of platform workers, though, is that minor side changes in the business model cannot solve the question. If platforms retain control on the prices and the services, if they monitor work performance with GPS, other metrics, or customer rating, if they discipline workers for minimal deviations from policies: then they are providing the services to customers and workers work “for” them, not “with” or “through” them (again, another insight from the UK Uber case).

Half a decade after the first court cases on platform work, it is about time to move forward from discussing employment status and finally start asking how these businesses intend to comply with the existing legal framework and labour protection if they are to operate. It is not time anymore to question “whether” employment regulation applies to platforms but “how” we ensure it is meaningfully applied to them.

Collective bargaining can also provide for protective flexibility and tailored rules once minimum statutory standards are respected. This, however, requires platforms to negotiate with genuine unions and give up the idea of cherry-picking also workers’ representatives. Once again, it is crucial to stress that labour institutions and employment protection are not À la Carte.

(Suggested citation: V De Stefano, ‘Regulation is not an À la Carte menu: insights from the Uber judgment’ UK Labour Law Blog, 2 March 2021, available at https://uklabourlawblog.com)