News / The effect of the UK’s Uber ruling on Ireland’s ‘gig’ economy

Last week the UK Employment Tribunal refused to allow the taxi app company, Uber, the right to classify their drivers as self – employed; granting the two test claimants the status of ‘worker’. But what does this mean for Ireland?

The Uber decision is an important one. There has been a recent and rapid global emergence of what is known as the ‘gig’ economy, ‘a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs’. It has seen the development of companies such as Hailo, Deliveroo, Air BnB and Facebook, not just in Ireland but internationally.

These companies provide a platform where customers can avail of a product or service online, with instant delivery to any location and with no need for a cash transaction. But who are the individuals who provide these services – Facebook is a worldwide content tool that does not create content, Air BnB is a real estate service that owns no real estate and Uber is the world’s largest taxi company that owns no taxis.

UK Position

A recent UK Employment Tribunal decision has seen this employment status being challenged with the Tribunal finding that:

It is unreal to deny that Uber is in business as a supplier of transportation services. Simple common sense argues to the contrary……..The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is…..faintly ridiculous. In each case, the ‘business’ consists of a man with a car seeking to make a living by driving it. [Uber] spoke of assisting the drivers to ‘grow’ their businesses, but no driver is in a position to do anything of the kind, unless growing his business simply means spending more hours at the wheel.’

Under UK employment legislation there are three types of employment status; employee, self – employed and a hybrid between the two, worker. The two London Uber drivers concerned in the decision were successful in arguing that they fell into this hybrid category and were therefore entitled to avail of protection in a number of areas particularly national minimum wage and paid annual leave. This status also allows them to maintain some of the benefits of a self- employed person for example flexible working hours and relevant tax breaks.

The Tribunal’s decision was based on the following facts:

  • Control of key passenger information and exclusion of the drivers from having access to it
  • An interview and recruitment process for drivers
  • Reserving ‘sole and absolute discretion’ to accept and decline bookings
  • A requirement to accept bookings
  • A requirement not to deviate from the set destination route without cause
  • The fixation of fares
  • Control in relation to the performance of duties
  • Performance management and disciplinary procedures in the form of passenger ratings
  • Determination of rebates without consultation
  • A guaranteed earning scheme
  • Acceptance of the risk of loss
  • A complaints procedure
  • Power to amend contractual terms unilaterally

Ireland

Under Irish employment law, there are only two employment categories considered by the Courts when determining an employment relationship, that of an employee and that of a self – employed person. Consequently, if a similar claim to the Uber case was pursued in Ireland it would have to be argued that the driver was in fact an employee as a result of the structure and control of the ‘gig’ company. The definition of a self-employed person was considered in Denny & Sons v Minister for Social Welfare 1998 ELR 36 IR and the leading test in this area is now whether ‘an individual is in business in his or her own account or is under the control of the other party’.

In light of this, it is clear that should a test case arise the Irish Courts are likely to determine a worker who is working for a ‘gig’ company, an employee. While some legal commentators have questioned whether Ireland’s employment categories are out of date, suggesting that the new ‘gig’ economy requires Ireland to create a category of ‘worker’, it seems the Irish Courts have already made provisions for such an employment relationship and a ‘gig’ company in Ireland could be at a higher risk of accountability than its English counterpart.