Tag Archives: employment rights

BBC interview with Dr Liz Oliver on Uber driver row

Dr Liz Oliver was invited to BBC Breakfast to talk about Uber’s appeal to the Employment Tribunal decision that a group of current and former Uber drivers should have been classed as workers rather than self-employed contractors.

Liz took part in an interview alongside Mr Farrar who was one of the claimants to the employment tribunal claim. She explained that the key issue was the identification and classification of a contract between Uber and the drivers. She pointed out that three contract forms are important to employment law: a contract DSC_4741of employment where the individual is an employee and has access to the full body of employment protection, a ‘worker’ contract which places the individual within the scope of some but not all employment protection (a kind of “employee-lite”) or self-employment where the service provider is in business on their own and falls outside of the scope of employment protection. At Employment Tribunal the claimants successfully showed that they were workers and that placed them within the scope of The National Minimum Wage provisions and the Working Time Regulations 1998 (which includes limits to working time and access to paid holiday). The key question was whether the way that the working relationship has been characterised by Uber companies within the written terms of their agreements with drivers and with passengers matched up to the ‘true relationship between the parties’. Uber describes the relationships in terms of agency. Rather than contracting with drivers to provide services to passengers, Uber describe their role is as an agent or broker; they simply bring drivers and passengers together. Ultimately the contract to take and provide a ride is between the driver and the passenger. The structure of these contractual relationships is at the heart of the Uber business model and the company has shown keen to defend its position. They were given leave to appeal to the Employment Appeal Tribunal and the hearing begins today.

A number of similar claims have been made by people who provide services through platforms so this decision will be watched closely by those who ‘participate in the platform economy’.  In Liz’s view the argument that Uber drivers are workers is a valid and strong one. However a favourable outcome for drivers would by no means end they story. An important question for examples is when drivers be considered to be workers, throughout the whole time that they are logged onto the App and ready to receive rides or only for the duration of the ride itself. Bottoming out questions such as these will test the how the architecture of existing regimes such as the framework of the national minimum wage accommodates the opportunities that platforms provide for flexible ways of working. Another question is how platforms would respond to further pressure to contract with service providers as workers. Would they seek to place more risk onto service providers to emulate self-employment more closely or would they assert more control over service providers in a manner more akin to employment? The growing body of litigation in the area of contract form is clearly playing a catalytic role in finding an appropriate way to combine flexibility and fairness. Here it seems that service providers themselves are pursuing a more ambitious set of outcomes than those proposed in the recent Taylor review of modern working practices.  Nevertheless litigation is a blunt tool when it comes to finding imaginative solutions. Could the key actors in the world of platform service provision find a space outside of this high stakes context to grapple with these issues? Innovation is, after all, at the heart of the development of the platform economy.

You can watch the interview through BBC iplayer although the programme is only available for 24 hours. BBC One (from 1h11m) 27th September – Broadcast

The growing problem of zero hours contracts in the UK

Image

Chris Forde
Chris Forde is Professor of Employment Studies at CERIC.

@CERIC_LUBS

In May, Vince Cable announced a review of zero hours contracts, amidst concerns that such contracts may be ‘abusing workers at the margins of the labour market’. Under zero hours contracts, workers agree to be available as and when required, but they have no guaranteed hours or times of work.  In healthcare, hospitality, and education, such ‘on-call’ workers are increasingly commonplace, cleaning hotel rooms, waiting in restaurants, or providing care to people at home. A number of reports have highlighted the precarious nature of many zero hours contracts, characterised by low pay, few employment rights, and little opportunity for progression.

Getting a handle on the numbers engaged in zero hours contracts has proved difficult. A Resolution Foundation report, using Labour Force Survey data, puts the number of workers on zero hours contracts at 200,000, although the authors recognise that this is likely to be an underestimate.  This would certainly seem to be backed up by figures cited last week by Norman Lamb, the Care and Support Minister who stated in Parliament that in social care alone, 300,000 workers – one fifth of the workforce – were employed on zero hours contracts. Why have they have become so commonplace in some sectors, and what are the experiences of those workers at the sharp end of these contracts?

In our recent research at the Centre for Employment Relations Innovation and Change (CERIC) at the University of Leeds, Ioulia Bessa, Sian Moore, Mark Stuart and I have been able to look at the realities of zero hours contracting in the domiciliary care sector. Our study for the Low Pay Commission examined contracts, hours of work and pay for workers who provide care for clients in their own homes. We have looked at pay levels in this sector in a previous blog, but what about the prevalence of zero hours?  One of the most striking findings from our analysis of a national dataset on work and employment in social care was that zero hours contracts have become the norm for domiciliary care workers over the last few years. Between 2009 and 2012, 56% of domiciliary care workers were employed on zero hours contracts. As figure 1 below shows, in the private sector, it is rare to see a care worker on a standard employment contract: in 2012, a staggering 4 in 5 domiciliary care workers was on a zero-hours contract. Our analysis suggests that there were approximately 100,000 domiciliary care workers in total on zero hours contracts in 2012.¹

Figure 1: Proportions of Domiciliary Care Workers on zero-hours contracts, 2009-2012, National Minimum Data Set for Social Care.

Image

Source: Bessa, Forde, Moore and Stuart (2013) Report for Low Pay Commission

Our case studies showed that it was changes in the commissioning process and well-documented falls in ‘block contracts’ (where providers are given guaranteed numbers of hours of care under local authority contracts) that had driven the rise in zero hours contracting. As a manager from one large national home care provider put it:

‘It would be difficult to not sustain a zero hours contract because  you don’t have any guaranteed or block hour contracts from the local authority, because they’re all commissioned and framework (agreements), there’s no guarantee of business, it’s difficult to guarantee a workforce business or work’ .

Advocates of zero hours contracts point to the flexibility of such arrangements, and the benefits to both employer and worker of adaptable work schedules. To be sure, we found some evidence of workers who valued flexibility over how many hours they worked (in particular those with second jobs, students or those with other commitments). However, the problem is that zero hours contracts remove any element of continuity for workers in the hours they worked from one week to the next. One respondent who had worked as a care worker described how his ‘heart sank every Sunday night’ when he received a work schedule for the coming week from his employer, typically setting out less hours for the worker than they were expecting. Whilst these hours were often topped up by the employer with additional hours during the week, it made planning very difficult. Our case studies also highlighted how working variable hours each week also had implications for the receipt of Statutory Sick Pay, and benefits such as Working Family tax Credits.

Some have called for these contracts to be outlawed, whilst others suggest tighter regulation, and better enforcement of those rights that zero hours contract workers do have. As one commentator has noted, those on zero hour contracts do have a modest advantage over those on casual contracts, in that an employer does have an obligation to provide work to employees on fixed-term contracts over casual workers, if work is available.  The problem is that under zero hours contracts, the risks associated with work not being available are predominantly borne by the worker, .

If we are arguing that commissioning practices in social care are one of the causes of the rise in zero hours in the sector, are there better solutions? Our case studies highlighted how the practice of contracting for hours of care from suppliers (with no specified pay rates or employment conditions that suppliers must adhere to) was a barrier to improving contract arrangements of the care workforce. ‘Fair fee models’, where authorities could give a specified rate for hourly pay and for overheads (with the capacity for increases), or ‘open book’ approaches, where the local authority would pay what a service costs and then allow a certain percentage profit might lead to a reduction in the reliance by employers on zero hours arrangements to maintain margins. However, the dominance of the current commissioning model in social care would seem to suggest that such radical changes are unlikely to happen any time soon.

¹ Our analysis of zero hours in the NMDS-SC dataset in 2012 was primarily concerned with wages and hours worked, and we focused on the 42,908 zero hours contract workers who provided information on their contracted hours and additional hours. We excluded from the analysis of those workers who indicated that their contracted hours were zero, but who provided no information on actual hours worked in a given week. These involved the exclusion of 60% of cases from the dataset. Including these workers in the count of zero hours contracts would give the higher count of 100,000 reported above.