EL 3: Atypical Work and the Changing Economy

A Third (4th, 5th?) Employment Status? (Workers)

- The disintegration of the firm

- Outsourcing, privatisation, contraction out, decline of industry, technological
change
- Perception that a large number of people were outside the traditional
employment relationship but deserving of at least some employment
protections, due to the development of the substitution and mutuality limbs
of the employment status test. – e.g., agency workers, those who look to gain
benefits, those who have substitution clauses, casual workers (those who
don’t take the hours for work)
- Encourages the use of atypical work
- Better to grant those who have no protections entirely, some of the core
employment rights.
- (Re)introduction of ‘worker’ status – granting SOME employment rights to
those workers

Worker: Statutory definition

Worker – s.230(3) Employment Rights Act 1996 (ERA):

- (3) In this Act ‘worker’ ... means an individual who has entered into or works
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 personally
perform 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

Further Wider Employment Statuses

- Equality Act 2010’s concept of ‘employment’

- S 82(2)(a): ‘a contract of employment, a contract of apprenticeship or a
contract personally to do work’.
 This is heavily influenced by another concept:
- EU law: worker. As developed by the CJEU in line with Art 45 TFEU and certain
EU Directives which have an ‘autonomous’ EU meaning of worker (which is not
all of them, confusingly!)
- Helpfully, it is broadly agreed now that all three concepts (s230(3), s82(2)(a)
and Art 45 TFEU) all possess essentially the same meaning within UK law.
- We can therefore consider (UK) cases which look at all three to help us
understand the more common concept of worker. It is possible however, that
 EU law will further develop its own concept. It remains to be seen whether UK
law would follow it.

What kind of rights?

- Some core employment rights, e.g., minimum wage, breaks, time off, equal
pay
- Equal treatment rights
- Atypical work rights
- Some rights stemming from EU law
- Health and safety laws (these even extend to self-employed workers)
- Some collective rights
- Some whistleblowing laws
- Unfair dismissal, common law contract of employment rights excluded from
rights which workers have. s.96 of ERA prevents this

Defining the ‘worker’

- Several concepts have emerged as central to the definition, some of them

surprisingly
- Subordination
- Personal service
- Dominant purpose
- Economic dependence
- Vulnerability
- Control

Subordination?

- The core test for employment status in many European countries

- Referred to by the CJEU in relation to EU law
- In Jivraj v Hashwani (2011), the Supreme Court ruled that a commercial
arbitrator, who does not work in a relationship of subordination, does not
benefit from the broader ‘employment’ status of the EQA 2010 (and by
extension would not be a worker under s230(3) ERA 1996.
- Widely criticised for making this too close to the narrower ‘employment’
status test, making the definition unnecessarily narrow
- Lady Hale famously argued in a subsequent case (Clyde v Bates van Winkelhof
2014) that there is no ‘mystery ingredient’ of subordination.
- It could be that this is a confusion coming from EU law (which has no third
status)

Personal service and dominant purpose

 - Dominant purpose – what is the main point/purpose of the contract? (Do they
do the work)
- Work must be personal, done by the individual
- In relation to worker status, this is often approached in a slightly broader way:
is the dominant purpose of the contract that the work be provided personally
- Loughran and Kelly v NI Housing Exec (1998) - Solicitors were held to be
subject to equality law although they contracted as part of their firm, because
it was intended that they would do the work personally.
- In Pimlico Plumbers v Smith (2018), the Supreme Court held that a
substitution clause would not negate worker status if the dominant purpose of
the contract was for personal service. Pimlico seen as an agent which gives
works to independent plumbers.

Economic Dependence and Risk

- An alternative approach to the ‘subordination’ approach is one based on

economic dependence, where someone is seemingly self-employed but who
are dependent on another firm or purpose for their work. (Definition often
made by firms who provide work)
- This was the explanation given by the EAT in Byrne Brothers v Baird (2002).
- This is a kind of ‘purposive’ approach, also seen in Uber.
- The court is asking, are these people in the same position of dependence as
employees and therefore in need of protection by the legislation?

The Gig Economy

- Workers hired by task or gig, often through an app

- This will often involve arrangements which seek to avoid employment
regulation.
- Seminal case of Uber v Aslam (2021).
- Aslam classes cab drivers for Uber as workers, which aren’t given minimum
pay
- The Supreme Court took a radical new approach to questions of employment
status.
- Lord Leggatt: this statute is there to protect those who cannot protect
themselves through contract
 Contractual terms are therefore of limited (but not no) use
 Public policy here is about protecting those people who require that
protection
 If there is a contract to personally provide work, this is what is
important

Uber and Control

 - One reading of Uber sees control re-emerge as the key test
- Workers’ rates, routes and work are conditioned by the app, which determines
their working conditions. They have less control than someone who would be
genuinely a freelance taxi driver (who could set their own rates)
- The fact that Uber could ‘discipline’ the driver was seen as important
- The disappearance of contract and the emergence of purpose.

Agency Workers

EMPLOYMENT
AGENCY

END-USER AGENCY
(CLIENT) WORKER

Employment Status Agency Workers

- Employment of the Agency?

 There is a contract between the parties, but ‘control’ will normally be
missing
- Employment of the End-User (client)
 Is there a contract with the end-user? Does it meet the criteria of an
employment contract if so?
- DACAS v Brook Street Bureau (2004) – There MIGHT be a contract with the
end user, but it would depend on the circumstances
- James v Greenwich LBC (2008) – Such a contract will only be implied where
this is absolutely necessary to make sense of the relationship

Uber and Multiple Firms

 - In Uber this problem was overcome in a different way (this was not an
employment agency case)
- The Court, in applying the purposive approach, set aside concerns about
various different corporate entities.
- This is radical because it overcomes both the triangular agency issue but also,
in that case, pierces the corporate veil, to conclude that they are effectively
the same company.
- A similar approach could be taken by in relation to agency work, although in
such cases it is not generally the case that the parties are part of the same
group.
- Agency work remains a structural challenge for employment law.

Atypical Work and Other Approaches

- Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations

2002 – employees only
- Note in particular reg 8: 4-year threshold.
- Agency Workers Regulations 2010 – equal treatment in relation to basic
working conditions
- Part-Time Workers (Prevention of Less Favourable Treatment) Regulations
2000. PT workers had previously had other rights limited; however, this was
declared discriminatory in the mid 90s.