The rise of the gig economy was given a boost in 2020 as people turned to gig working as a way of creating income traditional business were forced to close their doors. Whilst this worked to many people's advantage, the concept of gig work creates challenges for employment law. Old laws, designed to regulate employer conduct in the 20th century, are being brought to bear on a very different working concept which prioritizes flexibility over security. When the lines are blurred - for example when Uber drivers work solely for Uber - questions about the distinction between employees, workers, and independent contractors - and particularly whether gig workers are entitled to the same rights as employees and workers - are being testing.
We take a look at three jurisdictions which have experienced some recent legal developments in this space: Australia, California and the UK – with Australia adopting a conservative approach to regulating the gig industry; California’s courts and State Legislature have been by-passed by a popular ballot measure; and the UK’s existing laws have been tested to determine whether workers’ entitlements ought to apply to gig workers.
Australia – a tale of two stories
Health and safety
The deaths of five gig worker delivery drivers in between October and December 2020 pressured Australia’s governments to regulate the gig industry to ensure standards of safety, and workers compensation are applied to the gig industry. Indeed, the safety regulator in Australia’s largest State, New South Wales, has launched an investigation in to the safety measures adopted by the gig industry which may lead to criminal safety prosecutions in respect of the recent deaths.
The families of the deceased delivery drivers have applied for workers’ compensation and death benefits and may find relief in New South Wales’ workers’ compensation and safety laws. Those laws include a broad definition of “worker” – including any person who performs work personally as an independent contractor which suggests that gig workers are likely to be entitled to certain protections under workers’ compensation and safety law.
However, when it comes to gig workers’ entitlements (for example, to the minimum wage, or the national employment standards), Australia’s conservative government has shown no interest in reform. A succession of decisions in Australia’s employment tribunals have found that gig workers are not entitled to the benefits of employment under Australian law. Most recently, the Full Bench of the Fair Work Commission found that an Uber Eats “Delivery Partner” is not an employee, determining: that Uber exercised no control over when or how long the gig worker performed work; the gig worker’s ability to accept work from competitor food delivery apps indicated a non-exclusive relationship; and the gig worker was not required to wear a uniform, bear Uber’s logo, or ‘represent’ Uber Eats.
Without legislative change in Australia, it seems highly unlikely gig workers will receive the benefits enjoyed by employees.
California – presumed employee status thwarted
Unlike in Australia, in California – the birthplace of the gig industry – the courts and legislature have determined that workers are considered employees by default and the onus is on employers in the gig economy to demonstrate that their workers are not employees. A 2018 decision of the California Supreme Court, which was then codified into legislation in 2019, granted gig industry workers presumed employee status unless companies were able to prove that they are independent contractors. This provided (for a limited period) gig workers with the same benefits as employees to the minimum wages, and holiday and sick pay.
However in response, Uber, Lyft, Doordash and Instacart authored a Californian special ballot initiative – Prop 22 – and campaigned vigorously for an exception in favour of companies in the gig economy. Having reportedly raising a staggering $200m, the Prop 22 campaigners were successful in a popular referendum in November 2020 resulting in an exemption for app-based transportation and delivery companies from compliance with the 2019 legislation and who may continue to treat their workers as independent contractors.
In 2021, a Democrat controlled Congress may seek to introduce legislation which would have the same effect as the Californian 2019 legislation – overturning the effect of the recent Prop 22 special ballot initiative.
United Kingdom – a key judgment to come
The treatment of gig workers in the UK has faced similar issues to those in Australia and California. In November 2020, the High Court agreed with the Independent Workers Union of Great Britain (a union which represents gig industry workers) that the UK’s health and safety legislation did not sufficiently transpose an EU safety directive because the UK’s health and safety legislation discriminated impermissibly between an ‘employee’ and ‘worker’, inconsistent with the requirements of the EU's safety directives. In other words, gig workers ought to be entitled to the same health and safety protections that apply to employees.
Unlike their Californian counterparts, some companies in the gig industry in the UK appear to be accept that their workers are indeed entitled to the same or similar benefits as employees. In 2020, Just Eat announced that (through an agency) it would provide its UK workers with benefits including hourly wages, sick pay and pension contributions.
The UK Supreme Court is also due to give judgement in 2021 in the long running Uber v Aslam litigation, where the question for determination is whether Uber’s drivers were workers providing personal services for the purpose of the UK’s minimum wage, working time rules, and employment rights legislation. The answer to that question may grant gig workers a range of benefits and protections that have thus far eluded gig workers.
Looking forward to 2021
Some commentators are suggesting that 2021 "will be the year of the gig economy" with Tech Republic reporting that “many Fortune 500 CEOs agree that the gig economy is the new future of work”. The question then will be, how quickly can the law catch up? Australia’s possible enforcement of safety laws in the gig industry may result in increased scrutiny there. California’s experiment with legislating presumed employee status in the gig industry may be replicated at a national level. The UK Supreme Court’s judgement in Uber v Aslam may challenge the business model of some gig industry participants. The legal status of gig workers is by no means clear.
While before COVID-19 things may have slowed down, many Fortune 500 CEOs agree that the gig economy is the new future of work.