By Colin Leckey Partner – United Kingdom Lewis Silkin Kathryn Weaver Partner – Hong Kong Lewis Silkin (Hong Kong) Sean Dempsey Partner – United Kingdom Lewis Silkin
Employment status issues continue to preoccupy courts and lawmakers as new technologies and new ways of working challenge traditional definitions of workers and contractors. Cases are being brought around the world on the subject, many of which involve taxi and delivery drivers deployed through digital platforms.
In October last year, the European Commission adopted its work program for 2021, which includes a legislative initiative to improve working conditions for platform workers, see here as part of its drive to create a Europe fit for a digital age.
In the EU, the ECJ heard its first allegation about the status of a worker in the “gig” economy in the Yodel case, who was expelled from the UK. A parcel courier claimed that he was an “employee” within the meaning of the EU Working Time Directive and was therefore entitled to paid leave. The ECJ, in its version of a summary judgment, firmly denied the claim, ruling that it was up to the national court to make a final decision on the status of the worker. There was no violation of EU law and the courier appeared to have been correctly classified as self-employed.
In France, however, the Cour de Cassation (Supreme Court) ruled that Uber drivers should be in a subordinate relationship and should be properly classified as employees rather than self-employed. This is not the first such decision in France, as the Supreme Court reached the same conclusion in 2018 in relation to the workers employed by the Take Eat Easy online platform. The status of the employees of online platforms in France has not yet been regulated by law, so that an individual case analysis is still required. On December 2, 2020, a report on the regulation of digital work platforms was presented to the French Prime Minister, which contained some recommendations on how to regulate the use of digital work platforms, in particular through the use of umbrella companies or cooperatives.
In the UK, a key ruling by the Supreme Court ruled that Uber drivers had employee status and were not self-employed. A full report and impact analysis of the verdict can be found here.
Other developments in the UK on workers’ rights included an extension of the right to written information on employment information to those with worker status, not just workers, from April 2020. The UK is also expected to legislate in 2021 to give workers with variable-time contracts a right to request a more stable and predictable contract after 26 weeks.
Online food delivery has been a particular focus of labor law developments in Italy. The Supreme Court confirmed that Foodora deliverers are self-employed, not employees, but are still entitled to worker protection due to the nature of the relationship under Italian law. A tribunal in Palermo classified (and reinstated) a delivery man as an employee, and in Bologna a booking system was seen as potentially discriminatory. The first collective agreement for the self-employed has now been signed.
The Federal Labor Court in Germany ruled that gig economy workers (or “crowd workers” as they are sometimes called there) can be employees if they are treated similarly, see here. Another decision by the Court of Justice strengthened the right of freelancers to be informed under the Law on the Transparency of Remuneration. It was decided that freelancers should be included in the law’s definition of an employee if they are financially dependent on a client, which means that they can request information about salary levels from colleagues.
The Supreme Court in the Netherlands ruled that the intent of a contracting party no longer plays a role in determining whether a contract qualifies as an employment contract, provided other relevant legal criteria are met. From January 1, 2020, a new law was passed that entitles zero hours (and similar) employees to a fixed number of working hours after twelve months of service. The law requires employers to make a written offer for a fixed amount of work equal to the average number of hours worked over the past 12 months.
In Belgium, the new coalition government has announced a review of the current rules on differentiating between employees and the self-employed.
Poland has introduced a new obligation to register task-specific contracts with the Social Security Agency (ZUS). The government wants to monitor such contracts because they do not have to pay social security contributions.
The Department of Labor left Europe and looked across the pond to the United States. Last October there was a proposed rule to determine when an employee is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). The rule aims to clarify the long-term “Economic Reality Test”, which determines when people should be classified as employees and are therefore entitled to minimum wages and overtime pay within the framework of the FLSA (see here). The new regulation is expected to come into force in March 2021. At the beginning of 2020, the ministry published a regulation clarifying the definition of the term “joint employer” in the context of the FLSA. This provides an indication of the circumstances in which an employee performing work that benefits another person and the employer is considered to be a joint employer.
At last year’s Managing a International Workforce conference, we said that California passed a law that codified the “ABC test” from the Dynamex decision of the California Supreme Court, but that the law (AB 5) was immediately challenged and his fate is unclear. The ABC test determined when independent contractors would be considered employees. A new California law (AB 2257), which went into effect September 4, 2020, modified AB 5 and aims to limit its significant impact on multiple occupations and industries by specifically excluding them from analysis as part of the ABC test. Later in 2020, Uber and Lyft strongly supported California Proposition 22 (see here) (an electoral initiative), which recognized app-based drivers as independent contractors rather than employees. It granted drivers certain “dedicated time” protections, such as: B. Subsidies for health care and accident and accidental death insurance. California Proposition 22 was duly passed in the November election, with the support of 58% of the electorate.
In Pennsylvania, the Supreme Court has narrowed the test for independent contractors under the state unemployment benefits act. The result is that workers who do not actually provide services to other companies or who do not agree to do so cannot be properly classified as independent contractors.
There have been several cases of gig economy in Canada and more are expected. The Supreme Court of Canada published a highly anticipated decision regarding UberEAT drivers in which it ruled that a mandatory arbitration clause that requires Uber drivers to settle disputes in the Netherlands is incomprehensible and therefore unenforceable. This decision allows for employee status disputes to be resolved in courts in Ontario, creating the ability for Uber drivers to qualify as employees under the Ontario Employment Standard Act. The ruling also opens the door to a proposed $ 400 million class action lawsuit against Uber.
The Ontario Labor Relations Board decided that Foodora’s food delivery couriers are dependent contractors and can unionize. And the Ontario Court of Appeals ruled that prior activity as a “dependent contractor” may play a role in calculating the notice of termination for a contractor who became an employee.
In November 2020, the Mexican president presented an initiative to parliament to reform federal law to ban subcontracting, protect workers’ rights and prevent tax evasion. It still has to be passed.
New Zealand has decided to extend basic employment rights to dependent contractors. And since June 2020, employees in a “triangular employment relationship” have been able to lodge personal complaints against the person who controls their work and against their employer.
In Japan there are new rules according to which temporary workers must be treated on an equal footing with the regular employees of the end user.
In May 2020, new rules went into effect in the United Arab Emirates that will allow Abu Dhabi Global Market companies to recruit new categories of workers, including MPs, outsourced individuals, interns and temporary freelancers. Individuals can now obtain freelance licenses in Abu Dhabi for any of 48 business activities while working either full-time or part-time for their employer, provided the employer gives their consent. This is also available to non-residents outside of the UAE.
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