Almost two years ago, I mentioned the English Court of Appeal’s decision in Uber BV & Ors v Aslam & Ors [2018] EWCA Civ 2748 on appeal from UKEAT/0056/17/DA), where individuals working as taxi drivers for Uber were to be classified as workers not self-employed individuals.
This decision was a significant defeat for Uber, but it was hardly going to be the last word in the story and so it proved. An appeal to the U.K. Supreme Court was always going to be on the cards and, on Friday 19 February, the Justices issued their judgement (see Uber BV & Ors v Aslam & Ors [2021] UKSC 5).
The Supreme Court was asked to consider two questions by Uber:
Whether the drivers (the Respondents) were “workers” providing personal services to the Second Appellant.
If the Respondents were “workers”, what periods constituted their “working time”.
The result? Uber drivers are workers not self-employed individuals. Essentially, the Supreme Court has approved the earlier decision of the English Court of Appeal.
Although Uber drivers won’t acquire full employment status, this decision is, nonetheless, highly significant. It will, for example, mean that Uber drivers will be protected under the National Minimum Wage legislation and the Working Time Regulations.
Paragraphs 94 to 102 of the Supreme Court’s decision are really instructive. The Court found the following matters extremely significant:
The rates of pay for taxi drivers was set solely by Uber
The contractual terms were dictated solely by Uber
Uber constrained or restricted the ability of drivers to decline jobs
Uber strictly vetted the type of vehicle which drivers could use for jobs and the technology used by drivers was “wholly owned” by Uber
The communication between a driver and a passenger was severely restricted by Uber in order “to prevent drivers from establishing any relationship with a passenger capable of extending beyond an individual ride.”
As Lord Leggatt (who delivered the unanimous judgement of the Court) stated at paragraph 102:
“Taking these factors together, it can be seen that the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber. Furthermore, it is designed and organised in such a way as to provide a standardised service to passengers in which drivers are perceived as substantially interchangeable and from which Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill. From the drivers’ point of view, the same factors – in particular, the inability to offer a distinctive service or to set their own prices and Uber’s control over all aspects of their interaction with passengers – mean that they have little or no ability to improve their economic position through professional or entrepreneurial skill. In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.”
Worker is a term which is widely used in EU equality and employment law, but a single definition does not exist. As a result of the U.K.‘s long relationship with the EU, the term has entered the British legal systems and, in the interim period, Brexit will not change this fact.
In Allonby v Accrington and Rossendale College (Case C-256/01) [2004] ICR 1328; [2004] ECR I-873 the Court of Justice made the following observation:
“… there must be considered as a worker a person who, for a certain period of time, performs services for and under the direction of another person in return for which he receives remuneration …”
In Syndicatul Familia Constanta v Directia Generala de Asistenta Sociala si Protectia Copilului Constanta (Case C-147/17) EU:C:2018:926; [2019] ICR 211, the Court of Justice of the EU was strongly of the opinion that the relationship between employer and worker was of a “hierarchical” nature. This was a view echoed by Lord Clarke in the Supreme Court’s decision of Hashwani v Jivraj [2011] UKSC 40; [2011] 1 WLR 1872 where he identified the relationship as one of “subordination” in favour of the person receiving the services.
That said, Baroness Hale in a later Supreme Court decision – Clyde and Co LLP and Anor v Bates van Winkelhof [2014] UKSC 32 – stated that “while subordination may sometimes be an aid to distinguishing workers from other self-employed people, it is not a freestanding and universal characteristic of being a worker”. This remark was quoted with approval by Lord Leggatt in the Uber decision at paragraph 74 of his judgement.
In other words, such a feature is merely to be deployed as one of the many possible tests that can be used by the courts to analyse a relationship between two parties.
The Employment Rights Act 1996
Section 230(1) of the Employment Rights Act 1996 contains the definition of who precisely is an employee i.e. someone who has a contract of service. If you don’t have this type of contractual arrangement (you’re not an employee), you may well be working under a contract for services. This is one of the most important distinctions in employment law in the United Kingdom.
Section 230(3) of the Act also defines in law an individual who is a ‘worker’. This can include someone who provides services under an employment contract – and, crucially, some individuals who fall into the self-employed category.
Conclusion
Individuals working under a contract for services – precisely because of their lack of employment status – are often denied access to the sorts of legal rights which employees routinely take for granted e.g. unfair dismissal protection, redundancy protection, family friendly rights.
There are notable exceptions (aren’t there always?): high earning British television celebrities (e.g. Lorraine Kelly) or a number of BBC news journalists have preferred to be treated as freelancers or self-employed persons. Why? They can then minimise their exposure to income tax liability in a way (often via the medium of personal service companies) that would not be possible because if they were employees they would almost certainly be taxed at source on a PAYE (pay as you earn) basis.
We have seen an explosion in the type of work that is often characterised or labelled as the ‘gig economy’. This work is often characterised by a distinct lack of employment rights; irregular working patterns; chronic insecurity; lack of long term career progression; and low pay. It is often impossible for such individuals to complete the necessary periods continuous service to acquire employment rights.
Companies such as Deliveroo, Lyft and Uber have become synonymous with the ‘gig economy’, as have whole sectors of the employment
There’s now a growing awareness on both the part of the UK Government (The Taylor Review) and the European Union (the forthcoming EU Directive on Transparent and predictable working conditions) that people on contracts for services deserve greater levels of work-place protection.
It’s not just in the UK that debates about employment status are currently playing out. At the tail end of 2019, it was with particular interest that, in 2019/20, I was following a story from the United States which highlighted many of the issues which I have just been discussing in this Blog.
The US State of California enacted a law, Assembly Bill 5 2019 or AB5 (known more popularly as the gig economy law) giving those individuals working in the gig economy more employment rights. The law came into force on 1 January 2020.
The Covid-19 pandemic has also exposed the lack of employment protection for workers and the self-employed. Only last March, I was writing about the fact that the U.K. Government’s reforms to Statutory Sick Pay would would not include approximately 2 million individuals – a situation that Frances O’Grady, General Secretary of the TUC was quick to highlight.
By Shannon Clark, Robbie Graham, Salwa Ilahi, Jenna Murray and Ethan Robinson (Editor: SJ Crossan)
Introduction
The above picture shows people in Britain standing on their street participating in the ‘clap for carers’ which now takes place every Thursday.
In the past, seeing all of your neighbours standing clapping and banging pots and pans together every Thursday at 8pm would seem a bit odd. However, this is now the norm and we will go onto explain how this has become the case.
On the 31 December 2019, the Wuhan Municipal Health Commission announced reported a number of cases of pneumonia in the Wuhan, Hubei Provence (WHO, 2020) and so began a Worldwide pandemic. The cause of these cases of pneumonia were eventually found to be caused by a virus called the Coronavirus. The virus has been found to cause an incredibly infectious respiratory disease, also known as COVID-19, which has sent many businesses and economies spiralling into free fall as they come to terms with the impact of the disease.
It has changed the way that almost everyone in society has to go about their daily lives as they have now been advised not to leave their home unless absolutely necessary and if they do need to go out, stay 2 metres apart from everyone at all times. For many it has also brought about change to their working lives as a vast amount of workers are not either having their contracts terminated, working from home or been placed on a fairly new concept in UK Employment Law known as Furlough.
In this article, we will go onto explain the main changes that have taken place as a result of the coronavirus pandemic and how they have impacted on workers, businesses and employment law in the United Kingdom.
Coronavirus update
At the time of writing this article (April 2020), the number of confirmed cases of the coronavirus in the UK was approximately 162,000. While this number is not substantial in terms of the total number of workers in the UK, it has led to around 80% of the workforce in the UK (and across the world) having their jobs impacted by the pandemic. This is due to the fact that many countries, including the UK, have ordered non-essential shops and businesses, for example clothes retailers, pubs and restaurants, to close and stay closed until it is safe for them to re-open. As a result of this, there have been over 1.2 million new unemployment benefit claims in the UK since the beginning of the outbreak (Hope, 2020) and it is expected that around 8 million people will apply to the governments furlough schemefor funding (Osborne & Kellowe, 2020), which we will discuss later in this article.
Sick Pay
In the Employment Rights Act 1996, Section 230 (1) defines an employee as an individual who has a contract of service. As a result of this status, such individuals are entitled to employment protection and benefits such as the right to receive either contractual sick pay or statutory sick pay (Crossan, 2017). In relation to COVID 19, those entitled to contractual sick pay must follow their workplace’s usual protocol when reporting that they must self-isolate. Employees can self-certify for the first 7 days of absence however, they are required to get a note from NHS 111 or a doctor if they must isolate for more than 7 days (ACAS, 2020).
Typically, those described as workers or individuals on a contract for services are not entitled to the same level of protection. This leaves them unable to claim any form of sick pay. Due to the recent outbreak of COVID-19, the inability to claim sick pay could be argued to be one of the main causes of stress and financial worry for individuals due to the uncertainty and lack of information on how this virus is spread. As noted by ACAS (2020), this worry could now be said to be somewhat alleviated, as of 13 March 2020, the UK Government decided that both employees and workers must receive statutory sick pay from their first day of self-isolation if:
They have coronavirus
They have symptoms of coronavirus
Someone they live with has coronavirus symptoms
They have been informed to by NHS 111 or a doctor
Despite this, it should be noted that this change in policy will not be extended to the self-employed. Furthermore, for employees, contractual sick pay is often much more generous than statutory sick pay and it would therefore be beneficial for employees (if able) to claim this through their place of work instead of opting for SSP. In order to be eligible to receive statutory sick pay, employees must be earning at least £120 per week (BBC, 2020) and, as highlighted by the Office for National Statistics, the annual survey of hours and earnings has shown that around 1,766,000 individuals in the UK make less than £120 per week (ONS, 2020). This means that many workers will simply fail to qualify for SSP – such as those on zero hours contracts as they are unable to accrue enough hours; as well as over half of workers aged 65 and above. This leaves such individuals vulnerable to stress and money worries and may even encourage those suffering from viral symptoms and who are considered ‘key workers’ to attend work in order to make ends meet. This is particularly alarming as those aged 65 and above are more susceptible to infection from covid-19 (Hunt, 2020).
Prior to lockdown in March 2020, Gregg’s, the UK high street bakery retailer, unlike many other big businesses, announced that they would pay all staff contractual sick pay if they were required to self-isolate due to suffering Coronavirus symptoms (BBC, 2020). This approach is in huge contrast to the likes of JD Wetherspoon, which prior to quarantine, announced that all of its 43,000 staff would be subject to regular statutory sick pay rules if they had isolate in order to prevent the spread of Covid-19. This meant that not all Wetherspoons’ staff would be entitled to SSP and those that do qualify would only be paid after four or more days absence in a row which would have meant being entitled to receive less than £100 per week (Webber, 2020).
Furloughing
With the toll of the coronavirus pandemic and the lockdown that has ensued, it has left many individuals unable to work due to the variety of ways that they can be affected by the virus. It is essential that these workers are still able to receive some sort of wage to support them during these difficult times. This is where the furlough scheme can assist those who cannot do their jobs. It is a “granted leave of absence” to enable the employment of these individuals to continue despite the current circumstances (Hodgkin, 2020). Lawrie (2020) explains the way in which the furlough scheme works; meaning that an employer can claim 80% of an employee’s wages from the government up to a limit of £2,500 and the company is not under any obligation to fulfil the other 20% of the wage.
This provides a sense of security for these employees as they are reassured that their job is safe and that they can still receive some financial protection if they have been affected by the virus personally or if their employer is unable to provide them with work during these uncertain times.
However, the furlough scheme, which came into effect on 1 March 2020, is only a temporary measure with an initial duration of 4 months. An extension of this can be granted (only if necessary) and the minimum furlough period that an employee is to be placed on is 3 weeks in a row – although they may be entitled to be furloughed more than once (HM Revenue & Customs, 2020).
It is important to note that, when an employee is on furlough, they are not to perform work for their employer and after furlough has ended, the employer is not obliged to retain on the employee, raising the possibility of redundancy (Lawrie, 2020).
The opportunity to benefit from furlough applies to individuals regardless of whether they hold full time/permanent status or not, and this extends to apprentices, workers, individuals on zero hours contracts, agency workers and temporary employees (ACAS, 2020). The way in which a furlough agreement is made is by the employer approaching the the employee or worker for permission – unless there is a lay-off clause included in the contract. The affected employee/worker would then be required to sign a written agreement to this effect. As the West Cheshire & North Wales Chamber of Commerce (2020) explains that failure to secure an employee’s consent to furlough could lead to claims of a contractual breach or constructive unfair dismissal, which is not an ideal position for either party to be in.
“Two-thirds of British businesses have already used the government’s scheme since it was announced last month” reported Bernal (2020) and a prominent example is British Airways, one of the UK’s biggest airlines. The airline worked with the Unite union to furlough 80% of its workforce, which is approximately 36,000 of its employees (Harding, 2020). This major decision applies to a range of their staff, including engineers and cabin crew, and was expected due to the inevitable effect that coronavirus has had on British Airways (Webber, 2020). Instead of being made redundant, the furlough scheme is a means of offering protection for an individual’s job and part of their income. Many workers and employees will surely be glad of the scheme’s existence.
Pay Rise
The UK National Minimum wage and National Living wage was set to increase by 6.2% for 2.8 million people on 1 April 2020 (with this being announced in December 2019). This would be give full time workers an annual pay rise as the National Living wage will rise from £8.20 to £8.72. This would apply to those aged 25 and above. The increase of the minimum wage for 21-24 year olds has risen from £7.70 to £8.20; 18-20 year olds will see the rate rise from £6.15 to £6.45; and for 16-17 year olds there was to be a rise from £4.35 to £4.55. (UK Government, 2020).
However there where discussions that this wage increase may be postponed but this was rejected even though this new living wage will not effect furlough workers as they won’t see the impacts of this on their wages for quite some time. The businesses that haven’t furloughed their workers are being begged to continue in paying the ‘real living wage’ as it is essential to these workers risking their health and safety to come to work. Many companies have begged to have the rise delayed and postponed due to the fact that the coronavirus pandemic which is currently taking place has caused huge financial impact across the UK effecting the economy with smaller businesses suffering the most. It is understandable as to why the government and businesses would wish to delay the increase as this non-essential businesses during the coronavirus have closed e.g. restraints and pubs, thus these business have no money coming in to pay their staff the new minimum wage no less the one that we currently had. This new wage could mean that funds and savings in the business could run dry as they pay their staff furlough wages which could result in these businesses to suffer even with permanent closures of businesses across the UK. But to the millions of key workers whom are working all over Britain giving essential help during the Covid-19 pandemic are still on their living wages and this rise is essential to keep them afloat. (Sheldon,2020).
Amey plc refuses to offer higher sick pay to workers amid the Covid-19 pandemic
The previous living wage was just not enough for people to live on which is the reason that this increase was so important, as it helped make sure that the working class have a good standard of living, but most would say that it is still not good enough and many will not see the benefits until the pandemic is over as furloughed staff are one due 80% of their salary meaning that in the current situation their is even more stress, this can be said as not only are key workers not getting the wage that they deserve for their hard work that is keeping the UK afloat, but many working class citizens are left nothing near the end of the month and this also goes for essential workers, such as NHS staff such as Hakeem Lawal who is a father of three started working as a cleaner for the NHS and has been working there since 2018 with no sick pay provided by his employer , he says “it was very hard because at the end of the month – more or less a week before the end of each month – you are waiting with nothing in your account at all” as well as the fact that the chemicals that he used to clean the facilities where very dangerous for his lungs, meaning that not only was he struggling financially to support his kids but he is aware that the job he is doing is harming himself and he has no safety net if these chemicals where to make him sick and have him off work (BBC News, 2020). It is also going to be more of a struggle for those working at home as it has meant that energy bills are rising as electricity is on far more often as people aren’t turning it off when going to work with a prediction from ‘Energyhelpline’ reckoning that household bills are likely going to rise by 30%.(Jones,2020). The living wage rise would have been greatly appreciated for families that will be struggling financially through the pandemic and self isolation nut if there are only getting 80% of their salary it could result in those who are already struggling to be put in an even worse situation with debt.
On 24 March 2020, during a trade union negotiation surrounding the topic of sick pay for refuse collectors (waste collectors), the head of Human resources at Amey plc (a services company that focuses on improving and maintaining the roads, railways and airports amongst other things) said that the company believed the Coronavirus is “less severe” than normal influenza and because of this they would not be providing their workers with unique sickness benefits (additional sick pay) if they choose to stay at home during the pandemic (Booth, 2020). The GMB trade union, who were arguing in favour of better sick pay for refuse collectors at the negotiation were shocked by Ameys comments regarding the coronavirus, they argued that it is unfair for these key workers to only be offered the minimum amount of sick pay (£94 per week).
Following the GMB’s defence of the waste collectors, Simon Schumann-Davies (the head of human resources for Amey) claimed that Coronavirus was significantly less severe than other diseases and stated that there would be no change in the sick pay that they offer to their workers: “we are applying exactly the same rules regarding sickness benefit as we would for any other condition in that we will be paying contractual entitlement.” (Davies, 2020)
In response to this Keith Williams from the GMB argued that Amey are forcing their workers to put their health at risk as they would financially suffer by choosing not to come to work and only receive statutory sick pay.
Following the barrage of criticism that Amey received for their actions towards their workers, a company spokesperson stated (on 31 March) that workers who decide to self-isolate will receive full pay. Shortly prior to this announcement, Amey had issued a statement clarifying that the opinions of Simon Schumann-Davies did not reflect its position on the pandemic. (Sumner, 2020). With the increasing severity of this situation it was inevitable that any decision by the company not to allow sick pay for workers would provoke an intense, public backlash and this, undoubtedly, forced them to change their policy.
Conclusion
The Covid-19 pandemic has had a massive impact on almost everyone – and will continue to do so for the foreseeable future. It has changed the way that workers in the UK go about their daily home and work life and has brought about massive amounts of uncertainty. However, some of that uncertainty may have been removed due to the factors explained in this article, such as changes to SSP and the UK government’s furloughing scheme as employees and workers can be, somewhat, helped financially during these unprecedented and difficult times.
HM Revenue & Customs, 2020. Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme. [Online] Available at: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme [Accessed 28 April 2020].
Lawrie, E., 2020. Coronavirus: What does it mean if I’ve been furloughed by work?. [Online] Available at: https://www.bbc.com/news/explainers-52135342 [Accessed 27 April 2020].
Coronavirus (COVID-19) isn’t just a potential threat to your health; it could also mean that your earnings take a hit.
How so?
If you have to take time off from work (i.e. self-isolate yourself) because you have (or might have) been infected by the virus, will you be entitled to receive sick pay from the organisation that you are working for?
It depends very much on your employment status …
… if you are a zero hours worker or genuinely a self-employed person, the answer is an emphatic no.
If you are deemed to be an employee (an individual who works under a contract of service) within the meaning of Section 230 of the Employment Rights Act 1996, you may be fortunate in that you have an entitlement to receive either contractual sick pay or statutory sick pay.
Contractual sick pay
If a contractual sick pay scheme applies to your employment, you might receive, at its fullest extent, 6 months full pay and then 6 months at half pay. This generous arrangement, of course, will not apply from day 1 of the employment and employees will have to build up their continuous service in order to be eligible for the maximum level of contractual sick pay. It is probably the case that an employee with just over a year’s service would receive 1 month at full pay for sickness absence and then 1 month at half pay.
An example of entitlement to contractual sick pay arrangements taken from the Collective Agreement (the National Working Practices Agreement) between Scottish Further Education lecturers and their employers can be seen below:
Statutory sick pay
What about statutory sick pay or SSP? This is relevant in situations where employees are not entitled to receive contractual sick pay.
It’s also worth pointing out that contractual sick pay is often much more generous than SSP and, even then, not all employees will be entitled to receive this benefit because they fall outside the eligibility criteria. The current weekly rate of sickness pay (in March 2020) is £98.25 and could be paid by employers for a maximum of 28 weeks.
Ordinarily, it becomes payable only from 4th day of sickness absence, but as of Wednesday 4th March 2020, the UK Government has announced that employees who self-isolate themselves because of suspected Coronavirus infection, will be paid SSP from day 1 of their sickness absence.
This is a temporary measure which will apply only for the duration of the current COVID-19 emergency, but people who are off sick with a medical condition other than the virus will also be entitled to benefit from these changes.
See links below to articles on the BBC website about sickness pay entitlement and COVID-19:
The change in Government policy will not be extended to the self-employed; and to zero hours workers (who will not be able to meet the threshold conditions for eligibility). Frances O’Grady, the General Secretary of the UK’s Trades Union Congress (TUC) has stated that as many as 2 million workers may not be eligible for SSP under the current system.
There has been some concern expressed that individuals in these categories may continue to go to work – if they have the virus or suspect as much – because they will not receive SSP during their absence.
Eligibility criteria for SSP
In 2019-20, in order to qualify for SSP you must be an employee earning at least £118 per week or £512 per month (before tax). This is known as the Lower Earnings Limit.
In April 2020, SSP will rise to £95.85 per week, but individuals’ earnings must fall within any of the following bands in order to qualify:
£120 per week
£520 per month
£6,240 per year
Again, this will mean that many zero hours contract workers will simply fail to qualify for SSP payments.
More problems …
There is also another complication concerning eligibility for sickness pay which the COVID-19 outbreak has raised:
Let’s assume that you do qualify for either contractual sick pay or SSP, but you have decided to take the precautionary measure of self-isolation so as not to expose your colleagues to potential risk.
It may be that you have recently returned from a destination such as China or Italy where the virus has been particularly prevalent and you decide to play it safe by not going into work. You contact your HR Department or employer to inform them of your decision; you are thanked for being extremely considerate and responsible; and then you are told that you are not entitled to receive sick pay because you haven’t actually been diagnosed with the virus.
Matt Hancock MP, UK Government Minister for Health, thinks that current legislation does cover such situations and individuals who take precautionary measures, as outlined above, should benefit from sick pay provisions.
With all due respect to Mr Hancock, what he thinks and what current legislation or a contract of employment states might be entirely different realities. That said, Mr Hancock does have the support of the highly regarded Advisory Conciliation and Arbitration Service (ACAS) which is recommending that employers pay self-isolating employees who have taken such a precautionary measure (see link below).
Clearly, COVID-19 is presenting a number of challenges to traditional practices or orthodoxies in the field of employment law. This is a serious issue given that recent estimates are predicting that up to 20% of the UK workforce could be in danger of contracting the virus and, consequently, they will be absent from work.
In some respects, the UK Government has been caught napping on the issue of extending employment protection e.g. entitlement to sick pay to people who do not have a contract of service and the COVID-19 outbreak has really exposed this shortcoming.
As Jonathan Rennie of law firm, TLT, had noted (as recently as this week) the UK Government has failed to implement any of the recommendations of the Taylor Review which favoured extended employment protection to workers who did not have a contract of service. It is somewhat ironic that the virus outbreak has forced the Government to break cover and extend some employment protection rights.
A link to an article on the BBC website about the predicted impact of COVID-19 on the UK workforce can be found below:
Seán Crossan's Scots Law 