Employment Law Briefing January 2019

Uber B.V. v Aslam: Worker Status and the Gig Economy

The Court of Appeal has upheld the Employment Tribunal’s decision and the Employment Appeal Tribunal’s decision that Uber drivers are workers entitled to the minimum wage and paid holidays. Uber has a smartphone app by which passengers can book rides from drivers who have the app. The drivers own their cars and are free to choose when they make themselves available to accept bookings. They were free whether to switch the app on at all and whether to accept any particular trip offered. Uber had the right to disconnect drivers from the app for a period if they turn down offers too frequently.

Mr Aslam and Mr Farrar claimed that they should be paid the minimum wage under the National Minimum Wage Act 1998 and receive paid annual leave under the Working Time Regulations 1998 while working as drivers for Uber. Uber argued that their drivers were self-employed independent contractors, and that it owed them no work or employee obligations. Uber argued that they only acted as an intermediary providing booking and payment services and that they drove the passengers as independent contractors. Uber relied on a contractual provision contained in their contracts which described Mr Aslam and Mr Farrar as "partners" and stated that "nothing shall create an employment relationship between Uber and the partner." Mr Aslam and Mr Farrar argued this was a sham. The judges found that there was a “high degree of fiction” in the wording of the contract and that it did not the practical reality of the relationships and therefore could be disregarded. The Court of Appeal agreed that drivers are under a positive obligation to be available to accept passengers while the app is on which amounts to “work.”

Uber said it would challenge the latest ruling at the Supreme Court and has been given leave to do so. Subject to appeal, the case will now go back to the Employment Tribunal for the claims themselves to be heard.

This case shows that simply labelling a worker as “self-employed” does not necessarily mean that is the case.

Hopefully the Government’s Good Work Plan (see Key Legislation and Changes to look out for in 2019) is hoped to provide workers in the gig economy more clarity over their rights. Status matters because employees are endowed with more rights and privileges.

French Court have also held that Uber drivers have “work contracts”

The French Court has ruled that a former driver who had sued Uber had a “work contract.” He had sued the company after it had deactivated his account. Uber had argued that it was merely a service provider, and the drivers were self-employed, able to work when and where they want.

The Court found that the driver could not freely choose clients or set their own rates or working conditions. The court stated that there is a “relationship of subordination” between drivers and Uber which amounted to a “work contract.”

Uber have said they are going to appeal this decision

Stefanko and others v Maritime Hotel Limited (in voluntary liquidation): Employees entitled to a written statement of particulars if they have worked for less than 2 months. The Claimants, who are Polish nationals, worked as waiting staff at the Maritime Hotel until they were summarily dismissed for objecting to persistent shortfalls in their wages, late payment and a falsification of their wage slips. The Second Claimant had worked for the hotel for only six weeks, and the Employment Tribunal found that she was not entitled to receive her statement of terms and conditions that was required to be provided "not later than two months after the beginning of the employment". On the race discrimination claims, the Claimants alleged discrimination about the treatment in the way they were dismissed (which involved offensive language), as well as the fact of their dismissal, but the Employment Tribunal concluded that the dismissal had nothing to do with race discrimination.

The Employment Appeal Tribunal held that (1) the Employment Tribunal had erred in law and the Second Claimant was entitled to receive her statement of terms and conditions (and an award under s 38 Employment Act 2002), irrespective of whether she was still employed after two months, and (2) the Employment Tribunal had erred, on the direct race discrimination claims, in its approach to the burden of proof and in the sufficiency of its reasons.

Awan v ICTS UK Limited: Implied terms, dismissal and entitlement to long term disability benefits

The EAT has considered whether an employee could rely on an implied contract term to prevent his employer dismissing him while he was in receipt of long-term disability benefits. Where an employer operates a scheme providing long term sickness or incapacity benefits the courts may imply a term preventing an employee being dismissed so that the employee is not deprived of the benefits to which they would otherwise be entitled to.

Mr Awan worked for American Airlines. He was contractually entitled to both sick pay and the benefit of an insured long-term disability benefit plan. If the employment terminated his entitlement to these benefits would cease.

Mr Awan took sick leave from 2012 due to depression. He was dismissed in 2014 following a TUPE transfer to ICTS and as adjustments could be agreed to facilitate his return to work. It was concluded he was permanently incapable of doing his job. He was dismissed and his entitlements to the benefits ceased. Mr Awan brought tribunal claims, arguing that it was unfair and discriminatory (arising from his disability) to dismiss him whilst he was still entitled to long-term disability payments.

The Employment Tribunal found that there was nothing to stop ICTS dismissing him while he was entitled to receive benefits under the insured long-term disability plan and there was no scope for implying a term.

Mr Awan appealed.

The Employment Appeal Tribunal (EAT) allowed Mr Awan’s appeal. The EAT found that a term could be implied into his contract restricting the employer’s right to dismiss him on grounds of incapability whilst he was receiving benefits otherwise it would be contrary to the purpose of the disability plan and the benefits the plan was envisaged to provide. The whole purpose of the long term disability scheme would be defeated.

Awan v ICTS UK Limited is a clear stark reminder of the dangers of dismissing an employee who is in receipt of long-term disability benefits.

Ms I Valentine v Department of Work and Pensions (DWP): Employer acted perversely in sacking of disabled woman.

A judge has ruled that a disabled woman was unfairly discriminated against when she was sacked. Ms Valentine was employed on a programme designed to get vulnerable, long term unemployed people back to work over a 12-month period. DWP invoked disciplinary procedures after just 4 days sickness which led to her dismissal.

Ms Valentine suffered from migraines that were severe and unpredictable arising to a disability. She had completed a heath declaration form prior to starting the programme stating she was on “antidepressants and migraine blockers.”

Ms Valentine had a migraine on 11 October and was absent from work for a further 3 days unrelated to her migraine. This triggered DWP’s absent management procedure as the 4 day trigger point had been reached. She was within her probation period. The policy however provided that absences related to disability should not be counted as part of the trigger days.

At the hearing she explained her situation. She was not referred to occupational health as she was still on probation.

Another episode of migraine occurred in November when Ms Valentine when she was called to another meeting and decision made to dismiss her. She was unsuccessful in her Appeal. The Tribunal fund that she had been unfairly dismissed.

This case shows the importance of taking on board what an employee is saying, consider whether there are reasons to depart from a policy and get expert input from occupational health. Tillman v Egon Zehnder Limited (2017): Supreme Court is to hear the Appeal in this case on the reasonableness of non-compete clause.

The Court of Appeal had held in the above case that the restrictive covenant clause which prevented employees from being “concerned or interested in any business carried on in competition” after termination was unreasonable because the time frame was too wide and it would bar former employees from being a shareholder in a competing business on the basis of the words “interested in.” This went beyond what was required to protect the employers legitimate business interests.

In general, terms which seek to restrict an ex employee’s actions after termination of employment are only enforceable when they are reasonable. Reasonableness is determined by specific facts of the case. If the term is deemed unreasonable, then the ex employee will not be bound by them.

Egon Zehnder appealed the decision to the Supreme Court which is presently being considered. This decision will impact on the validity of many employment contracts. Regardless of the decision of the Supreme Court, great care needs to be taken to ensure that the provisions contained in any non- compete clause are not drafted too widely and are no greater than what is required to protect a legitimate business interest.