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Gig economy subscription app SteadyPay raises £2.9 million

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FCA licenced gig-economy app SteadyPay has closed a £2.9m seed equity and debt funding round, with the equity investment led by venture firm Hambro Perks and Fair By Design.

A subscription-based app, SteadyPay automatically tops up workers’ bank accounts when their earnings are below average and allows customers to repay over interest-free installments.

The firm uses Open Banking and a bespoke credit decision engine, which is used to better understand and accept the creditworthiness of gig-economy workers, who can often be excluded by traditional credit providers.

Founded in 2017 and employing 9 full-time staff, SteadyPay says it intends to use the capital injection to reach 5,000 customers in the next 12 months.

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How does the Uber decision impact the gig economy as a whole?

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The Supreme Court held that “Uber drivers were not in business on their own account”

We take a deep dive into this judgment which has had a final say on whether Uber drivers (and potentially other gig economy individuals) are workers.

A. ISSUES

  • Were Uber drivers working under workers’ contracts (and therefore qualify for the national minimum wage, paid annual leave and other workers’ rights)?
  • If so, were the drivers working under such contracts whenever they were logged into the Uber app (and not just when they were driving passengers to their destinations)?

B. PROCEEDINGS BELOW

  • The employment tribunal found that the drivers were “workers” as defined under s.230(3) of the Employment Rights Act 1996 (ERA), more commonly known as the limb (b) workers. The tribunal further found that the drivers were working for Uber London during any period when a driver had the Uber app switched on, was within the territory in which he was authorised to work and was able and willing to accept assignments.
  • The EAT and the Court of Appeal dismissed Uber’s appeal of the tribunal decision and the issues ultimately ended up in the Supreme Court. The case was heard on 21 and 22 July 2020 and the judgment was handed down on 19 February 2021.

 

C. BACKGROUND KNOWLEDGE

Section 230(3) ERA

The term “worker” is defined by s.230(3) as:

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 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 or any profession or business undertaking carried on by the individual;

and any reference to a worker’s contract shall be construed accordingly.

Limb (b) has three elements:

(i) a contract whereby an individual undertakes to perform work or services for the other party;

(ii) an undertaking to do the work or perform the services personally;

(iii) a requirement that the other party to the contract is not a client or customer of any profession or business undertaking carried on by the individual

This case was concerned with the first element of limb (b) viz., whether there was a worker’s contract. There was no dispute between the parties as to whether the services were performed personally (which they were) and that Uber was not a client or customer of the drivers.

The issue of whether there is a right of substitution in the contract and whether this was actively utilised in practice by the workers is an issue that is more pertinent to the second element of limb (b). This issue did not arise in this case (see below Section E Analysis).

Bates van Winkelhof v Clyde & Co

Lady Hale Bates van Winkelhof maintained that employment law distinguishes between three types of people:

  • those employed under a contract of employment;
  • those self-employed people who are in business on their own account;
  • intermediate class of workers who are self-employed but who provide their services as part of a profession or business undertaking carried on by someone else.

D. SUPREME COURT JUDGEMENT

ISSUE 1: WERE DRIVERS WORKING UNDER WORKERS’ CONTRACTS (AND THEREFORE QUALIFY FOR THE NATIONAL MINIMUM WAGE, PAID ANNUAL LEAVE AND OTHER WORKERS’ RIGHTS)?

The central plank of this judgment centres whether Uber drivers are to be regarded as working under contracts with Uber whereby they undertook to perform services for Uber as opposed to in business on their own account. The conclusion that Uber drivers are workers and not in business on their own account is based on three premises which will be considered below.

1. THAT WRITTEN TERMS OF A CONTRACT BETWEEN THE DRIVERS AND UBER ARE NOT A STARTING POINT IN DETERMINING THEIR WORKER STATUS.

The Supreme Court maintained that to state that a contract is a starting point is at odds with the purpose of statutory protection afforded to workers. Employers are often in a position to dictate contract terms and the individual performing the work has little or no ability to influence those terms that give rise to the statutory protections stipulated under the National Minimum Wage Act or the Working Time Regulations.

This approach is further supported by the fact that there is prohibition on contracting out of such statutory protections as can be found under s.203 (1) ERA which renders as null and void any provision or agreement that purports to exclude or limit the operation of the statute.

2. THE STARTING POINT FOR DETERMINING WORKER STATUS IS THAT ENDORSED IN THE CASE OF CARMICHAEL V NATIONAL POWER.

The House of Lords decision in Carmichael v National Power [1999] 1 WLR 2042 stated that where there is no written contract between the parties or at least where the written contract did not represent the true nature of the relationship, it would be appropriate to look at the following factors:

  • the language of the correspondence between the parties;
  • the way in which the relationship had operated;
  • evidence of the parties as to their understanding of it.

The Supreme Court stated that although written terms should not be ignored they are not to be treated as a starting point for analysis, especially where the bargaining power of the parties means that the individual had no say in drafting the terms and the written agreement would not represent how the parties actually conducted themselves. The Court also maintained that often the objective of the written terms is to circumvent altogether the statutory protections that would otherwise be afforded to the individuals concerned.

3. IN DETERMINING THE STATUS OF AN INDIVIDUAL WORKER, THE DEGREE OF CONTROL EXERCISED EMPLOYER IS OF UTMOST IMPORTANCE: THE GREATER THE CONTROL, THE MORE LIKELY THE INDIVIDUAL WILL BE CLASSIFIED AS A WORKER.

Key indicators of this control are subordination and dependence upon another person (employer) in relation to the work done. The greater the subordination and dependence, the greater the degree of control exercised by the employer.

CONCLUSION

Applying the above analyses, the Supreme Court identified five aspects of the employment tribunal’s findings to support the conclusion that Uber drivers were working for and under contracts with Uber.

  • The remuneration paid to the drivers is fixed by Uber and the drivers have no say in it.
  • The contractual terms under which they work are dictated by Uber.
  • Once logged onto the Uber app, the driver’s choice of accepting or rejecting requests is constrained by Uber, for example if the acceptance rate falls below a certain percentage then a penalty is imposed on the driver by way of being logged out for 10 minute before they can be logged back on.
  • The way the services are delivered by the drivers is tightly controlled by Uber, for example under the rating system, if it falls below a certain level for a period of time Uber can effectively terminate the contract with that driver.
  • Restriction of communication between driver and customer means that the drivers have little or no ability to improve their economic position through professional or entrepreneurial skill other than working longer hours whilst constantly meeting Uber’s measures of performance.

ISSUE 2: WERE THE DRIVERS WORKING UNDER WORKERS’ CONTRACTS WHENEVER THEY WERE LOGGED INTO THE UBER APP (AND NOT JUST WHEN THEY WERE DRIVING PASSENGERS TO THEIR DESTINATIONS)?

Put the question another way: during what periods where the drivers working?

The tribunal at first instance found that a driver was working under a worker’s contract when:

  • he had the Uber app switched on;
  • he was within the territory in which he was authorised to use the app; and
  • he was ready and willing to accept trips

Uber argued that the drivers were only working under workers’ contracts when they were actually driving passengers to their destinations. This is because, they argued, the driver had a right to turn down work even when they were logged onto the app and so the driver had no contractual obligation to undertake work for Uber whilst logged onto the app.

The Supreme Court rejected this argument on several grounds:

  • that the driver has the right to turn down work does not preclude a finding that he is employed under a worker’s contract so long as there is an “irreducible minimum of obligation” i.e. if there is an obligation to do some work, then the right to turn down work is not fatal.
  • the Welcome Packet issued to drivers at the start referred to logging onto the Uber app as “going on duty” and instructed drivers that “Going on duty means you are willing and able to accept trip requests“.
  • in reality, there was more than an irreducible minimum of obligation because a penalty would be imposed on those who turn down work too often.

E. ANALYSIS

This judgment is consequential not least because it does not just affect Uber but the companies in the wider gig economy which will have to (if haven’t done so already) review and rearrange their working model, in some cases quite drastically. As part of this effort, any analysis that relied on previous judgments that focused on the right of substitution will have to be adjusted to take into consideration this judgment. Although the substitution analysis is relevant to the second element of limb (B) under s.230(3) ERA (namely, personal service), this judgment will form the bedrock of determining the worker status going forward.

A key takeaway is that the Supreme Court has somewhat relegated the importance of written agreements between the parties as a mere factor to consider, and not a starting point for substantial analysis. This does not mean that employers should pay less attention to the written agreement but it does mean that the employers have to place greater weight and effort into aligning the written agreement with the actual practical aspects of how the workers work.

Another key commercial impact of this judgment is that attempts to maintain the quality of their brand will likely be construed as tools for control that enhance subordination and dependence of workers on the organisations.

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You fought Facebook, why not Uber? Albanese wants Morrison to fight for gig economy workers | The Canberra Times

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news, latest-news, facebook, uber, gig economy, media bargaining code

Opposition leader Anthony Albanese has challenged the Morrison government to take up the fight to gig-economy companies in same way it has technology giants Google and Facebook. Mr Albanese continued his campaign for industrial relations reform on Thursday, inviting rideshare and food delivery drivers to Parliament House to highlight poor working conditions in the sector. Labor plans to boost workers’ rights if it wins the next federal election, a move which could set up a brawl with major players in the sector. Asked if he was prepared to fight big global companies during an election campaign, Mr Albanese drew parallels with laws passed this week to ensure tech giants Google and Facebook paid news organisations for content. He argued that just as the Morrison government was using the media bargaining code to help protect the jobs of journalists, it should legislate to support gig-economy workers. Mr Albanese said in both cases new laws were needed to deal with issues which had emerged in the past decade. “The government, opposition and this parliament have been prepared to take tough decisions. We have been prepared to stand ground, to legislate for a code, and to do that in order to defend Australia’s national interests and defend the jobs of journalists,” he told reporters. READ MORE: “Labor stood with the government on those issues. It was the right thing to do. “[Gig-economy workers] James, Ashley and Malcolm deserve as much respect and dignity as the [journalists] at this press conference. They deserve it. “Josh Frydenberg got onto Mark Zuckerberg about Facebook. Why isn’t the government prepared to negotiate on behalf of these people?” Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:

/images/transform/v1/crop/frm/LLBstgPA4H8EG9DTTGcXBL/a02be749-9ffa-4e8f-9275-bbdaf22ce99c.jpg/r0_340_4256_2745_w1200_h678_fmax.jpg



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Boost for gig economy as Reading and Leeds festivals set to go ahead

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Reading and Leeds music festivals will go ahead this summer following the Government’s announcement of a road map out of lockdown, organisers have said.

The sister events – known for their mix of rap, rock and pop – are due to take place between August 27 and 29 after both were cancelled in 2020 due to the onset of the pandemic.

According to plans announced on Monday, the Government hopes to lift all remaining restrictions on social contact by June 21 at the earliest.

This would mean larger events can go ahead and nightclubs can finally reopen.

Confirming their 2021 events would take place, the official Reading and Leeds Twitter account posted: “Following the Government’s recent announcement, we can’t wait to get back to the fields this summer. LET’S GO.”

Reading will return to the Richfield Avenue venue while Leeds will once again take place in Bramham Park.

Stormzy, Liam Gallagher, Post Malone, Catfish And The Bottlemen, Disclosure and Queens Of The Stone Age are all scheduled to headline across the weekend.

Acts including Charli XCX, Yungblud, rapper Jack Harlow, rockers Neck Deep and Norwegian singer-songwriter Sigrid were recently added to the bill.

Latitude music festival lineup

Liam Gallagher is due to headline (Aaron Chown/PA)

The UK festival circuit has been hard hit by the coronavirus pandemic with its 2020 season effectively wiped out.

In January Glastonbury was cancelled for a second successive year after organisers said they had tried to “move heaven and earth”.

Greg Parmley, chief executive of Live, a trade body for the live music industry, welcomed the news but said the festival season was still in danger.

He said: “Today’s confirmation that Reading and Leeds music festivals will be taking place in August is a great moment that will give people hope of better times to come.

“The Prime Minister’s announcement on Monday has given some organisers confidence but there is still a large amount of uncertainty ahead of us. With the Government only committing to provide a week’s notice on the lifting of all restrictions, this will mean for many it will just be too late and we will see further cancellations.

99% of Glastonbury tents taken home

Glastonbury was cancelled for a second time (Aaron Chown/PA)

“This is why, despite the good news today, the Government must commit to further sector-specific support for our industry in the budget as we start our long road to recovery.”

In response to the threat posed by the pandemic, the Digital, Culture, Media and Sport Committee launched an inquiry into the future of festivals.

Last month the committee wrote to Chancellor Rishi Sunak to ask him to extend Government-backed insurance schemes to music and performing arts festivals.

Festivals added £1.76 billion in gross value to the economy in 2019, with almost one in three Brits watching Glastonbury on TV.

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