Court of Justice of the EU – Seán Crossan's Scots Law

It’s official: I’m a worker!

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.”

A link to the judgement can be found below:

https://www.supremecourt.uk/cases/docs/uksc-2019-0029-judgment.pdf

Workers or independent contractors?

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.

Related Blog articles:

https://seancrossansscotslaw.com/2019/03/25/strippers-are-workers-too-discuss/

https://seancrossansscotslaw.com/2020/02/13/california-dreamin/

https://seancrossansscotslaw.com/2020/03/05/state-of-emergency/

https://seancrossansscotslaw.com/2020/03/04/sick-pay-or-the-coronavirus-conundrum/

https://seancrossansscotslaw.com/2019/04/19/the-gig-economy/

https://seancrossansscotslaw.com/2019/07/22/good-work/

https://seancrossansscotslaw.com/2019/03/22/hello-im-lorraine-and-im-definitely-self-employed/

https://seancrossansscotslaw.com/2019/12/21/employee-or-not/

https://seancrossansscotslaw.com/2019/01/17/employment-status/

https://seancrossansscotslaw.com/2019/05/08/call-me-an-uber/

https://seancrossansscotslaw.com/2019/03/25/strippers-are-workers-too-discuss/

https://seancrossansscotslaw.com/2019/02/14/horses-for-courses-the-equine-flu-

Copyright Seán J Crossan, 21 February 2021

The American approach

Equal justice under law?

On Monday 15 June, 2020, the US Supreme Court issued a very important ruling (Bostock v Clayton County, Georgia (Case 17-1618)) that there can be no discrimination on the grounds of a person’s sexual orientation or that they have (or are undergoing) gender reassignment. An attempt by an employer to dismiss a gay person or a transgender person will be an example of unlawful discrimination.

Surprise, surprise you might say: what took the Supreme Court so long?

Such discriminatory behaviour, the US Supreme Court has now declared, is a breach of Title VII of the US Civil Rights Act 1964 (which was enacted by Congress as part of President Lyndon B Johnson’s Great Society programme).

And this is where the American approach to the issue of discrimination on the grounds of a person’s sexual orientation differs quite markedly from the UK.

Title VII of the Civil Rights Act 1964 states that it is:

“unlawful . . . for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual . . . because of such individual’s race, color, religion, sex, or national origin.”

From a British legal perspective, the word “sex” in Title VII of the American legislation is problematic when applied to discrimination involving a person’s sexual orientation.

Why?

Quite simply, in the UK, we would understand the word “sex” in discrimination law as applying to an individual’s gender whether they are male or female; or identify as being male or female.

A link to the US Supreme Court’s judgement can be found below:

https://www.supremecourt.gov/opinions/19pdf/17-1618_hfci.pdf

A link to an article on the BBC website about the judgement can be found below:

US Supreme Court backs protection for LGBT workers

Readers of this blog might not regard the US Supreme Court’s decision in Bostock v Clayton County, Georgia as in any way unusual. After all, in the United Kingdom and across the EU 27 member states, laws have been in place for a considerable period prohibiting unlawful discrimination on the grounds of sexual orientation.

Although the UK has now left the EU, the legislation protecting the LGBTI communities remains very much in place – by way of the Equality Act 2010 and other legislative instruments such as Article 19 of the Treaty on the Functioning of the European Union (primary legislation) and numerous Regulations and Directives (secondary legislation). The provisions in the Equality Act are, of course, an example of Westminster legislation and will remain hardwired into our legal system – for the time being at least.

The continuing status of European Treaty Articles, Regulations and Directives (in relation to the laws of the UK) will, of course, be up for debate when the Brexit transition period ends, as expected, on 31 December 20020.

The Equality Act 2010

Section 12 of the Equality Act 2010 addresses the issue of a person’s sexual orientation. This is a protected characteristic under the Act and means a person’s sexual orientation towards:

persons of the same sex
persons of the opposite sex
persons of either sex.

Sexual orientation discrimination: the historical perspective

Before 1 December 2003, in the United Kingdom, it was not unlawful to discriminate against an employee or potential employee by reason of that person’s sexual orientation. The situation changed dramatically with the introduction of the Employment Equality (Sexual Orientation) Regulations 2003. The relevant law now being contained in the Equality Act 2010, which prohibits less favourable treatment on the grounds of a person’s sexual orientation generally and such protection is no longer confined to the field of employment.

It should be noted, of course, that the Employment Equality Regulations were primarily brought into force to introduce protection for gay, lesbian and bi-sexual people. If, on the other hand, you were heterosexual, you were very unlikely to face discrimination in the work place due to your sexual orientation.

The primer for this change to the law in 2003 was the European Union’s Employment Equality Directive (as a result of the Treaty of Amsterdam 1999) which meant that the UK, as a member state, had to introduce legislation in order to guarantee that people who had suffered less favourable treatment in relation to employment had a form of legal redress. The Employment Equality Regulations 2003 (and now the Equality Act) implemented this duty on the part of the UK.

Employment Equality Directive was limited in its scope because it applied (unlike the more expansive Racial Equality Directive) to just two sectors: employment and vocational training.

Sexual orientation not sex

It is perhaps now instructive to examine the failure of UK laws to provide protection to individuals who suffered sexual orientation discrimination prior to the Employment Equality Regulations coming into force.

In Macdonald v Advocate General for Scotland and Pearce v Governing Body of Mayfield School [2003] UKHL 34, the House of Lords held that discrimination on the grounds of a person’s sexual orientation was not covered by existing UK equality laws (specifically the area of sex or gender discrimination then contained in the Sex Discrimination Act 1975).

Macdonald was dismissed from the Royal Air Force because he was homosexual or gay. Pearce, a teacher, had suffered an ongoing campaign of harassment while working at Mayfield School because she was a lesbian. Both Macdonald and Pearce claimed that the treatment that they had suffered was an example of direct sex discrimination.

Both claims failed because the treatment suffered by both individuals was an example of direct discrimination on the grounds of their sexual orientation – not because of their sex or gender. At the time of this appeal to the House of Lords, discrimination in employment on the grounds of a person’s sexual orientation was not prohibited by UK equality laws.

In its judgement, the House of Lords drew attention to the ironic fact that a new equality law prohibiting sexual orientation discrimination would soon be introduced, but this admittedly would be too late for Macdonald and Pearce! Small comfort indeed!

Had the cases occurred today, the employers would be liable for direct discrimination on grounds of sexual orientation in terms of Section 12 of the Equality Act 2010.

The perspective of the Court of Justice

Before the European Union’s Employment Equality Directive, the Court of Justice had been reluctant to lay the basis for greater legal protection in relation to a person’s sexual orientation.

In Case C-249/96 Grant v South West Trains Limited [1998] ECR I-621, Lisa Grant had argued that the failure by her employer to extend a concessionary ttavel scheme (worth £1,000 per year) to Gillian Percey, her same sex partner, with whom she had been in a stable relationship for more than 2 years, was an example of unlawful, less favourable treatment. The employer permitted heterosexual spouses (including common law spouses of more than 2 years standing) to enjoy the benefit of the travel scheme. Grant’s predecessor in the post had been male and his female partner had benefited from the travel scheme.

Grant chose her male predecessor as her comparator as part of an equal pay claim. It is important to appreciate that Grant was bringing her claim as a sex or gender discrimination legal action. Although Advocate General Elmer was broadly supportive of the couple’s claim that they had suffered discrimination under what is now Article 157 of the Treaty on the Functioning of the European Union and the Equal Treatment Directive, the Court of Justice decided not to follow this Opinion.

The Court stated that two men in a same sex relationship would have been treated in exactly the same way as Grant and Percey by the employer. South West Trains did not wish to extend concessionary travel to same sex partners of employees and, currently, there was nothing unlawful about this policy as neither UK or EU equality laws prevented discrimination by reason of a person’s sexual orientation. At the time that this case was decided, it should be appreciated that same sex relationships in the UK were not legally recognised in terms of civil partnership or marriage – such legal recognition was still some way away.

To come back full circle, the European Union would, of course, later redress the situation with the Employment Equality Directive which led to the introduction of the Employment Equality (Sexual Orientation) Regulations 2003 into UK law. Had these Regulations been in force when Lisa Grant commenced her legal action against South West Trains, these would have given her and Gillian Percey significant legal protection from the discriminatory action of her employer. Admittedly, this was scant consolation for them and thousands of other same sex couples who experienced less favourable treatment in employment.

The European Convention on Human Rights

The provisions of the Convention have been implemented into Scots law via the Human Rights Act 1998 and the Scotland Act 1998 which means that an individual will enjoy substantial legal protection in relation to his or her sexual orientation. Article 8 of the Convention places a duty on a public authority to have respect for a person’s private life. Fuirthermore, Article 14 of the Convention confers a general right on individuals not to be subjected to discrimionation. Employers who are defined as a public authority will have to ensure that they comply with these provisions. Private employers will also have to be aware of these provisions because there is nothing to stop an employee bringing a discrimination claim against the UK Government if some loophole exists which permits the employer to behave less favourably towards them on the grounds of their sexual orientation.

Interestingly, in Macdonald v Advocate General [2003] (discussed above), the employee did attempt to argue that his dismissal by the Royal Air Force, by reason of his sexual orientation, was a breach of the European Convention, but this argument failed because the Convention had not yet been implemented by the Westminster Parliament.

Today, of course, Macdonald would have a very strong claim against his employer for the treatment that he had suffered. Although the war may ultimately have been won, this was a battle that the unfortunate Macdonald would lose.

Related Blog Articles:

https://seancrossansscotslaw.com/2020/05/25/the-love-that-dared-not-speak-its-name/

https://seancrossansscotslaw.com/2020/02/02/the-only-gay-in-the-village/

https://seancrossansscotslaw.com/2020/01/04/pansexual/

https://seancrossansscotslaw.com/2019/12/31/civil-partner-i-do/

https://seancrossansscotslaw.com/2019/12/08/different-standards/

https://seancrossansscotslaw.com/2019/12/06/biased-blood/

https://seancrossansscotslaw.com/2019/10/04/a-very-civil-partnership/

https://seancrossansscotslaw.com/2019/02/20/love-and-marriage/

https://seancrossansscotslaw.com/2019/02/08/the-gay-cake-row/

EU Law? There’s still life in the old dog yet …

Photo by Brunel Johnson on Unsplash

At 2300 hours GMT today (or 0000 hours CET if you prefer), the United Kingdom will set a precedent and become an ex-member state of the European Union.

The European Union (Withdrawal Agreement) Act 2020 was given Royal Assent on 23 January 2020 and, earlier this week, the European Parliament overwhelmingly ratified the Withdrawal Agreement of November 2019 between the UK and the EU.

Click on the link below for the text of the Agreement:

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.CI.2019.384.01.0001.01.ENG&toc=OJ:C:2019:384I:FULL

Job done; back to normal then (whatever that is); the British have taken back control? Well not quite. The Withdrawal Agreement was always going to be the first part of the equation that needed resolving i.e. setting the terms on which the UK would leave the organisation. This has been popularly referred to as the divorce agreement e.g. dealing with the UK’s agreed financial contribution to projects and initiatives to which it had agreed when it was a member state.

The more difficult task will be to figure out what kind of future relationship the EU and the UK will have e.g. about future trading arrangements. UK Prime Minister, Boris Johnson wants such an agreement to be finalised by 31 December 2020; leading figures on the EU side (e.g. Ursula Von der Leyen, the Commission President) have been more cautious.

The fact that Brexit Day has finally arrived does not, however, mean that EU Law will cease to have effect in the UK.

We have now entered what is known as the transition period (31 January 2020 until 31 December 2020) and Article 127 of the Withdrawal Agreement explicitly states:

‘Unless otherwise provided in this Agreement, Union law shall be applicable to and in the United Kingdom during the transition period.’ [My emphasis]

In any event, as I have previously observed, EU Law is hardwired into the UK legal domestic systems. Areas such as consumer law; employment law; discrimination and equality law; environmental protection law and family law have all been extensively influenced by European legal principles. Any lawyer with some knowledge of EU Law knows this to be a question of fact. After 47 years of involvement with the European Project, this should be blindingly obvious.

Even this last week, documents published by the European Commission demonstrated that there will be import/export checks between the Island of Ireland and the UK. The Court of Justice of the EU will have the final say in relation to any disputes – despite what Prime Minister Johnson believes or says.

As Lord Denning opined many years ago in Bulmer (HP) Ltd v Bollinger SA [1974] 1 Ch 401, [1974] 3 WLR 202, [1974] 2 All ER 1226:

“But when we come to matters with a European element, the Treaty [of Rome] is like an incoming tide. It flows into the estuaries and up the rivers. It cannot be held back. Parliament has decreed that the Treaty is henceforward to be part of our law. It is equal in force to any statute.”

Or to use another metaphor: perhaps Brexit is a case of building the legal equivalent of the Thames Barrier after the deluge. Too little, too late. Whether the British Government likes it or not, by dint of Brexit, this country is no longer a rule maker and has assumed the status of rule taker.

Related Blog articles:

https://seancrossansscotslaw.com/2020/01/18/so-long-to-eu/

https://seancrossansscotslaw.com/2020/01/12/banning-smoking-in-the-streets-of-paris/

https://seancrossansscotslaw.com/2019/11/15/club-rules-or-the-hotel-california-syndrome/

https://seancrossansscotslaw.com/2019/03/29/happy-brexit-day/

When to exit because of Brexit?

Photo by Taras Bulba on Unsplash

An interesting story (Friday 15 February 2019) from BBC Scotland’s Chief Political correspondent, Glenn Campbell about the practicalities of Brexit.

The date for the UK to leave the European Union is 29 March 2019 and this is set down in law (the European Union (Withdrawal) Act 2018).

In any event, Mr Campbell reports that the President of the Court of Justice of the European Union does not seem to have been told by the UK Government when British judges appointed to the Court will cease their participation in the institution.

A link to the story on the BBC website can be seen below:

Brexit: Questions over UK judges on European Court of Justice

The president of European Court of Justice says he is waiting to hear from London when UK judges will stop sitting.