UBER DRIVERS ARE WORKERS, NOT INDEPENDENT CONTRACTORS
In the United Kingdom Supreme Court decision of Uber BV and others v Aslam and others [2021] UKSC 5, the United Kingdom Supreme Court ruled that Uber drivers are workers for the purposes of employment legislation.
The key issue. At the expense of oversimplification, the key issue in Uber BV and others v Aslam and others [2021] UKSC 5 (the “Uber decision”) was simply this: are the drivers who use the Uber smartphone application (the “Uber app”) to provide services to be regarded as workers who work for Uber under workers’ contracts, or are they independent contractors performing services for their passengers via contracts made with the said passengers through Uber, with Uber as their booking agent?
Employment Rights Act 1996. At the heart of this decision is the definition of a worker under section 230(3) of the Employment Rights Act 1996. The term “worker” has been defined thus ([35] Uber decision):
“an individual who has entered into or workers under (or, where the employment has ceased, worked under) –
(a) a contract of employment, or
(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;
and any reference to a worker’s contract shall be construed accordingly.”
In addition, a “contract or employment” has been defined under section 230(2) of the Employment Rights Act 1996 as “a contract or service or apprenticeship, where express or implied, and (if it is express) whether oral or in writing”, and an “employee” refers to an individual who has entered into or works under a contract or employment (section 230(1)) ([36] Uber decision).
Under Singapore’s Employment Act, an employee is defined as simply a “… person who has entered into or works under a contract of service with an employer and includes a workman…”, with a “contract of service” being defined as “any agreement, whether in writing or oral, express or implied, whereby one person agrees to employ another as an employee and that other agrees to serve his employer as an employee and includes an apprenticeship contract or agreement”.
As can be seen, the legislation in the two countries are similar, though they are not the same.
Uber drivers are workers. In the Uber decision, the United Kingdom Supreme Court held that Uber could not have contracted as a booking agent (see [45] – [57] Uber decision): this was premised on the finding that there was no factual basis for finding that Uber London acted as an agent for the drivers, but rather Uber London had contracted with the passengers.
Nonetheless, the United Kingdom Supreme Court went on to hold that, applying its decision in the earlier case of Autoclenz Ltd v Belcher [2011] UKSC 41, “… whether a contract is a “worker’s contract” within the meaning of the legislation designed to protect employees and other “workers” is not to be determined by applying ordinary principles of contract law such as the parol evidence rule, the signature rule and the principles that govern the rectification of contractual documents on grounds of mistake”, but should be a matter of statutory interpretation ([68] – [70] Uber decision).
Examining the legislation, the United Kingdom Supreme Court found that given the purpose of the legislation (set out at [71] – [75] Uber decision), it would be “inconsistent with the purpose of this legislation to treat the terms of a written contract as the starting point in determining whether an individual falls within the definition of a “worker” … The efficacy of such protection [accorded by the legislation] would be seriously undermined if the putative employer could by the way in which the relationship is characterised in the written contract determine, even prima facie, whether or not the other party is to be classified as a worker…” ([76] Uber decision).
The United Kingdom Supreme Court then emphasized five key findings of the tribunal which justified finding that the drivers were workers.
1. “First and of major importance, the remuneration paid to drivers for the work they do is fixed by Uber and the drivers have no say in it (other than by choosing when and how much to work) …” ([94] Uber decision).
2. “Second, the contractual terms on which drivers perform their services are dictated by Uber. …” ([95] Uber decision).
3. “Third, although drivers have the freedom to choose when and where (within the area covered by their PHV licence) to work, once a driver has logged onto the Uber app, a driver’s choice about whether to accept requests for rides is constrained by Uber …” ([96] – [97] Uber decision).
4. “Fourth, Uber exercises a significant degree of control over the way in which drivers deliver their services ….” ([98] – [99] Uber decision).
5. “A fifth significant factor is that Uber restricts communication between passenger and driver to the minimum necessary to perform the particular trip and takes active steps to prevent drivers from establishing any relationship with a passenger capable of extending beyond an individual ride ….” ([100] Uber decision).
The United Kingdom Supreme Court held that taking the above factors together, “… the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber.” ([101] Uber decision).
The United Kingdom Supreme Court also distinguished Uber’s method of operation and its relationship with drivers from digital platforms that operate as booking agents for suppliers of hotel or other accommodation ([103] – [108] Uber decision) and from earlier decisions involving minicab firms ([109] – [116] Uber decision).
Significance. While the Uber decision was clearly driven by considerations of the relevant employment legislation and its purpose, as noted above, there is a degree of similarity between the key provisions of the Employment Rights Act 1996 and Singapore’s Employment Act.
Hence, it is arguable that if you are a private hire vehicle driver who provide your services through a smartphone application like the Uber drivers in the Uber decision, you may potentially be an employee, and not an independent contractor.
In this regard, in the Singapore High Court decision of Public Prosecutor v Jurong Country Club and another appeal [2019] 5 SLR 554, the Singapore High Court had similarly accepted that the wording of the contract cannot be conclusive of the actual arrangement between the parties for the purposes of the Central Provident Fund Act (the “CPFA”).
“47 It is clear and undisputed that the express intentions of parties are not conclusive. … Where the parties have either inadvertently or deliberately used a label (eg, of an independent contractor) that does not match the reality of their working relationship, the court should not hesitate to depart from the express wording of the contract (eg, by finding that the worker was in fact an employee). In this regard, I note that the Prosecution cited the case of Autoclenz Ltd v Belcher [2011] 4 All ER 745 (“Autoclenz”) for the propositions that where employment contracts are concerned, the relative bargaining powers of the parties must be taken into account in deciding whether the terms of any written agreement in truth represent what was agreed, and that the true agreement will often have to be gleaned from all the circumstances of the case (at [35]). Within the CPFA context, this would be consistent with the comments made by the Minister of State for Manpower in 2012, cited to me by the Prosecution (Singapore Parliamentary Debates, Official Report (17 February 2012) vol 88 at p 1,200 (Tan Chuan-Jin, Minister of State for Manpower)):
… in instances where employers attempt to disguise their employees as ‘freelancers’, let me emphasise that they would not be absolved of their responsibilities under the law, including the Employment Act and the [CPFA]. …
48 This is essential to ensure that the statutory entitlements of employees are not easily removed through the mere insertion of express terms in the contract that are at odds with the parties’ actual relationship.”
Given the above, it is reasonable to say that should a case like the Uber decision arise in Singapore, the Singapore courts will examine the substance of the actual arrangement before deciding whether there is in fact an employment relationship for the purposes of the Employment Act, and will not simply accept that the contract in and of itself will be determinative of the issue.
It is also interesting to query to what extent has the Uber decision exposed companies in the position of Uber to more liabilities. For instance, given the findings in the Uber decision, if a pedestrian is unfortunately knocked over by a Grab or a Gojek driver, could Grab or Gojek be held vicariously liable? And would it differ if the driver is a Food Panda driver or a Deliveroo driver?
While that is, of course, a fact-centric question, the issue of control is likely to be an extremely important factor. Throughout the Uber decision, the degree and extent of control which Uber exercised over the drivers (in contrast to, e.g., booking agents for accommodations) has been emphasized. So, the more control a platform exercises over the service providers using the platform, the more likely there will be a finding that there is an employer-employee relationship between the service provider and the platform, and the more likely it is that vicarious liability may be imposed on the platform for tortious acts committed by its service providers.
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