Protecting Vulnerable Workers

UK legislation and case law relating workers has ensured that the most vulnerable working people enjoy at least the individual statutory rights at work. The issue here is how far the statutory rights have benefitted the working people, especially vulnerable workers, and also how far caselaw has provided protection to vulnerable workers. This essay discusses this issue, but also finds that legislation has not been successful in protecting vulnerable workers in the Gig economy. The question of protection of vulnerable workers arises due to the rise in a ‘two-tier’ workforce in the UK. The two-tier workforce in the UK evolved primarily after the application of the EU Acquired Rights Directive, and the resultant Transfer of Undertakings (Protection of Employment Regulations) 1981, which allowed the transfer of workers from public to private sector, ultimately leading to a system that did not protect new recruits who were not given the same levels of protections as the older workers. A two-tier workforce is one where two workers are involved in the same jobs but with differential treatment in terms of wages and work conditions. In the context of vulnerable workers, a two tier workforce sees full-time permanent employees work and “vulnerable atypical workers” working alongside with the former getting protection of employment laws, and the latter not getting the same protections, thus having to be termed as vulnerable workers. The Commission on Vulnerable Employment defines vulnerable employment as “precarious work that places people at risk of continuing poverty and injustice resulting from an imbalance of power in the employer-worker relationship.” The situation of atypical vulnerable workers was explained by Mummery LJ as follows: “….one tier enjoying significant statutory protection, the other tier in a legal no man's land being neither employed nor self-employed, vulnerable, but enjoying little or no protection, may create social injustice and a festering sense of grievance which would not be satisfactory in the interests of an efficient workforce, a competitive economy, a healthy society or anything else.”

The labour market of the UK is generally considered to be healthy as has also been reported in some recent studies on the UK labour market. The reasons why UK labour market has been given a favourable review is also due to its performance during recession, and the ability to create private jobs. However, there are also reports on the light protection to workers that are involved in the Gig economy; for instance, Organisation for Economic Co-operation and Development reported that the protections offered to those who are working in the Gig economy light as compared to those that are offered in some other European countries due to lack of regulation of temporary work. The Commission on Vulnerable Employment also published a report recently, in which they use evidence from atypical workers’ testimonies that indicate a growing level of disenchantment with level of protections offered to atypical workers in the UK.

The rise of the Gig economy in the UK has been seen in the recent times as being a positive development which allows flexible work environments leading to higher employment rates. There is a rise in ‘atypical’ work in the UK economy, with the increase in those involved in part-time employment, temporary work, self-employment, and freelancing. From the point of view of labour laws, the concern that arises with respect to such temporary workers or self-employed people is that they are outside the scope of protection offered by employment laws and regulations. This means that those who are involved in such atypical work are vulnerable workers. The issue then is how are these vulnerable workers protected under the legislation and case law of the UK. There are some regulations that are made to protect atypical workers; for instance, the Gangmasters and Legal Abuse Authority provides protections to the atypical workers in the the sectors of agriculture, horticulture and shellfish. The problem is that such protections are not offered to those who are involved in the other sectors of the Gig economy. At the same time, the protections offered by the Advisory Conciliation and Arbitration Service (Acas) is also not available to all such workers. This becomes a matter for concern because the Gig economy of the UK involves a significant number of temporary labour, and the absence of regulation or law allows employers a wide scope for exploitation of those workers who are not regular employees and have no access to rights under the employment law.

It has been suggested that some of the measures that are needed for strengthening worker protection may include the strengthening of the role of the Director of Labour Market Enforcement and the extension of the licencing regime of the Gangmasters and Labour Abuse Authority. On the other hand, there is another school of thought which argues that such approach would come in the way of increasing the flexibility of the labour market and come in the way of development of the Gig economy. It is difficult to agree with this argument because it is weighted towards the protection of employers, while it also leads to an unfair balance for the workers vis a vis the employers. Workers who are temporary and outside the scope of employment law are vulnerable to exploitation by the employers and this needs to be a focus in the Gig economy.

There has also been some effort to statutorily recognise new types of contracts between employers and employees, which would provide a higher level of protection to the atypical workers than offered by contract for services, although the level of protection may not be the same as contract of employment. Therefore, there is the development of contracts for atypical workers, such as, statutory worker contracts, which allow greater protection to the workers. Atypical workers may also get a fixed term contracts under Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2002/2034), which is only applicable for a fixed period of time, within which employees have certain statutory rights.

The courts have been cognizant of the imbalanced equation between employers and temporary workers, and the authorities developed by the courts clearly show this concern and the responses of the courts to the same. The legal issues that are pertinent to this situation concern typically the definition of the term employee for the purpose of acquiring a specific status that ensures employment rights protection and how this definition is applied to atypical workers that are working under casual contracts or are termed as self-employed by the employers.

Thus, one of the ways in which those who are working in the gig economy are made vulnerable to exploitation is by employers who employ people with responsibilities and portfolio of permanent employees, while terming them temporary employees. Due to the differences drawn between permanent and temporary labour in employment law and regulation, there is scope for exploitation of the latter and it is reported that employers may indulge in unscrupulous practices, such as labelling their employees as temporary employees so as to avoid regulatory mechanisms for the rights of the employees. Employment status therefore, is an important aspect of protection of vulnerable workers. With respect to this, the recent Taylor review recommended that workers should be given an avenue that help them in understanding their employment status.

Courts have tried to clarify the law regarding employment status in several judgments as it became necessary to define employment status with respect to those who are termed temporary employees only to avoid the discipline of the labour laws. There are instances where individuals may be termed self-employed, when they are actually working as employees. To this end, the courts have considered that individuals be only termed self-employed if they are working on their own account and have some business interest in the work. The difficulty arises because atypical workers do not have contract of employment or service, which would ascertain employment status for the individual. However, courts have ascertained employment status even in the absence of contract of employment. For instance, in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance, the court observed that a contract of service exists where:

“(i) the servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master; (ii) he agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master; (iii) the other provisions of the contract are consistent with its being a contract of service."

In the above case, the court has evolved the control test, by which the status of an employee can be ascertained through the level of control that the employer exercises over the employee. If the employee’s actions are controlled by the employer’s guidance, which also determines the manner, time and place for the performance of actions, then the courts are more inclined to view the individual as an employee, rather than a self-employed person. For the establishment of control, it is not necessary that the employee is controlled in day to day.

The dominant purpose test is also used by courts to establish the status of employment, as seen in James v Redcats (Brands) Ltd, wherein the court held that the provision of personal service if the dominant feature in the contract, then the status of employment is made out even in case of absence of mutuality of obligations. The provision of personal service is an important feature of employment and if this feature is present in a contract between the employer and self-employed sub contractors, then the court has been inclined to see the latter as workers and not independent contractors.

The integration test is also used by courts, as seen in Cotswold Developments Construction Ltd v Williams, as per which if the worker is not marketing his services to other clients, and works as integral part of the business, then he is to be deemed an employee. Recently, the integration test was used in the case of Westwood.

The significance of the Gig economy and how it situates the workers in the regulation of worker rights can be seen in the recent case of Uber v Aslam. In this case, Uber described their drivers as self-employed independent contractors or "partners" and the contract between them clearly stated that an employment relationship will never be created between Uber and the partner. The Employment Tribunal held that the drivers were "workers" within the definition in s.230(3)(b) of the Employment Rights Act 1996. The decision was finally upheld by the Court of Appeal, where the court also considered that atypical workers were increasingly vulnerable to the exploitation at the hands of the employer and therefore need to be protected.

However, a question arises as to how far the courts can use common law to protect the rights of atypical workers in the absence of legislation. There is a school of thought that argues that unless legislation is enacted to respond to the challenges faced by the atypical workers in the Gig economy, there is only so much that the common law can do. Therefore, it is important for legislation to respond to the challenges faced by the workers.

In conclusion, it may be noted that the Gig economy does place atypical workers in a more vulnerable position because they are not protected by the legislation on employment rights. However, courts have protected the rights of vulnerable workers by redefining workers in a way that allows them some access to employment rights. However, given how the Gig economy is growing, it is important that legislation responds to the possible exploitation of atypical workers. Common law alone cannot suffice to meet that requirement.

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Table of Cases

• Patrick Elias, ‘Changes and Challenges to the Contract of Employment’ (2018) 38 (4) Oxford Journal of Legal Studies 869.
• Autoclenz v Belcher, [2011] UKSC 41. Byrne Brothers (Formwork) Limited v Baird [2002] IRLR 96. Cotswold Developments Construction Ltd v Williams [2006] IRLR 181.
• Hospital Medical Group Ltd v Westwood [2013] ICR 415. James v Greenwich LBC [2008] EWCA Civ 35 James v Redcats (Brands) Ltd [2007] ICR 1006.
• Montgomery v Johnson Underwood Ltd, [2001] IRLR 269 Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497.
• Uber BV v Aslam [2018] EWCA Civ 2748. White and Todd v Troutback SA, [2013] UKEAT 0177/12.

Books

• BIS, Flexible, Effective, Fair: Promoting Economic Growth through a Strong and Efficient Labour Market (London: Department for Business Innovation and Skills 2011)
• Cabrelli D, Employment Law in Context: Text and Materials (Oxford: Oxford University Press 2014).
• Joseph Rowntree Foundation, Forced Labour in the UK (London: Joseph Rowntree Foundation 2014).
• Kew J and Stredwick J, Business Environment: Managing in a Strategic Context (CIPD 2005).
• Skrivankova K, Forced labour in the United Kingdom (Joseph Rowntree Foundation 2014).
• Taylor M, Marsh G, Nicol D, Broadbent P, Good Work: The Taylor Review of Modern Working Practices (London 2017).
• TUC, Hard Work, Hidden Lives: The Full Report of the Commission on Vulnerable Employment (London: TUC 2008).
• Upex R, Benny R, Hardy S, Employment Law (Oxford: Oxford University Press 2009)

Journals

• Elias P, ‘Changes and Challenges to the Contract of Employment’ (2018) 38 (4) Oxford Journal of Legal Studies 869.
• TUC Commission on Vulnerable Employment, “Hard Work Hidden Lives”, accessed