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Ежегодник трудового права. 2022. Вып. 12
Moving past the uncertain classification of platform workers
E. Menegatty
University of Bologna,
33, Via Zamboni, 40126, Bologna, Italy
For citation: Menegatti, Emanuele. 2022. "Moving past the uncertain classification of platform workers". Russian Journal of Labour & Law 12: 167-175. https://doi.org/10.21638/spbu32.2022.112
Workers under gig-economy arrangements have sharply increased in number over the last few years. However, they still struggle to achieve the rights and entitlements typically accorded by national labor laws to employees. The crux of disputes involving platform workers raised around the world — over 100 in the EU alone — evolved around their classification. Obviously, the aim of the litigation of gig workers was to open the main door leading to employment and social security rights, i.e. to obtain "worker" status. The outcome of the disputes has been rather mixed, even though there has been a clear stabilization. Many lawsuits have so far been promoted across to challenge the "independent contractor" status accorded to platforms to gig-workers, with mixed success. These decisions show that the traditional employment tests do not completely understand this new model of work, so maintaining a high degree of legal uncertainty around platform workers. Some possible solutions to get past this situation are on the table, ranging from a new legislative definition of "employment" to the creation of new intermediate categories of "dependent contractors." However, the best way to address the problem is by working out a different distribution of employment protections between "employee" and self-employed workers.
Keywords: gig-economy, platform workers, classification, independent contractor, employee, employment test, employment rights.
1. Introduction
"Gig" work encompasses the outsourcing of very traditional jobs, such as driving or cleaning, to workers engaged by digital platforms as independent contractors. Thus, with a few (increasing) exceptions, these workers do not usually have the rights and entitlements typically accorded by national labour laws to employees (Aloisi 2016; De Stefano 2016). Worldwide, platform work has increased by 30 % over a period of two years, a trend which is expected to continue (Kilhoffer et al. 2020).
Very intensive discussion has been taking place on the outcomes of gig work. Undoubtedly, there are some pros. It is indeed a potentially successful business model, able to combine a reduction of labour costs to a good quality of the services provided, so benefitting the consumers (Prassl and Risak 2016). Platforms can increase job opportunities for workers, especially for those who are looking for the opportunity to make some extra money on the side, requiring them very low commitment. There are however some cons as well. For some workers "gig" work is just a new form of precarious, unprotected and low paid employment. According to one opinion, workers are probably the losers of what is supposed to fall also under the header of "sharing economy" (Arthurs 2018). Being classi-
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fied as independent contractors, they do not usually have any guaranteed amount of work or the rights and entitlements typically accorded to employees.
As this paper is going to highlight this classification is rather controversial and it has been challenged, with mixed fortune, in courts all over the world. The essential and hard question to which judges and scholars, from different jurisdictions, have been trying to answer in the last few years is: Are gig workers really independent contractors or just mis-classified employees?
In this article we will examinate the trend of courts' decisions in a number of jurisdictions (including United States, United Kingdom, France, Spain, Italy), without claiming to be all-encompassing, trying to work out the common patterns behind their outcomes (§ 2). We will see that, even though Courts' decisions seem stabilizing towards the recognition of the employment status to platform workers, there are good reasons to believe that still a lot of uncertainty is surrounding their classification and therefore their employment conditions. This will take us to the exploration of some possible solutions to move part uncertainty (§ 4), eventually drawing some conclusions.
2. Basic research
2.1. The gig-economy workers in National Courts
The core of the disputes involving platform workers raised all over the world — more than 100 in the EU alone — has evolved around their classification. Obviously, the target of gig-workers litigations was opening the main door leading to employment and social security rights, that is to say the achievement of the "employee" status.
The outcome of disputes has been rather mixed, even if an apparent stabilization looks on the way. Some decisions, especially the first to be delivered, when the phenomenon was probably still small and pretty unknown, have confirmed the independent contractor status of the gig workers. Some examples are:
— District Court for the Northern District of California (Grubhub, a British and United States version of Foodora)1;
— District Court for the Eastern District of Pennsylvania (Uber)2;
— Labour Tribunal Paris (Uber)3;
— Florence Labour Court (Deliveroo)4;
Other decisions, which have become the majority over time, have qualified gig-workers as "employees". Among them the Supreme Courts of three different countries:
1 United States District Court, Northern District of California, Raef Lawson V. Grubhub, Inc., et al, Case No.15-cv-05128-JSC, Opinion. 02.08.2018. Available at: https://www.courthousenews.com/wp-con-tent/uploads/2018/02/grubhub-ruling.pdf (accessed: 28.01.2022).
2 The United States District Court For The Eastern District Of Pennsylvania, Ali Razak, Kenan Sabani, And Khaldoun Cherdoud V. Uber Technologies, Inc., And Gegan, LLC, No. 16-573. 11.04.2018. Available at: https://www.isdc.ch/media/1591/14-razak-v-uber.pdf (accessed: 28.01.2022).
3 Conseil De Prud'hommes De Paris, Mr Florian Menard V. Sas Uber France and Societe Uber B V. 20.11.2017. Available at: http://www.diritto-lavoro.com/wp-content/uploads/2018/02/sentenza-del-29-gennaio-2018.pdf (accessed: 28.01.2022).
4 P. Tosi, Riders, il Tribunale di Firenze nega ai sindacati l'azionabilita dell'art. 28 St. Lav., in Guida al Lavoro, 2021, n. 9, p. 26. Available at: http://www.bollettinoadapt.it/ancora-sui-riders-cosa-dice-concreta-mente-il-tribunale-di-firenze (accessed: 28.01.2022).
— Paris Court of Appeal (Uber)5
— French Supreme Court (Uber) 6
— Italian Supreme Court (Foodora)7
— Valencia Employment Tribunal (Deliveroo)8
— Australian Fair Work Commission (Foodora).9Spanish Supreme (Glovo)10.
A different outcome concerned Courts in countries where a third intermediate category, between employment and self-employment, is given by the legislature, variously referred as dependent contractors, quasi-subordinate workers, economically dependent workers.
— The Court of Appeal in the UK11;
— Madrid Labour Court (Glovo)12;
— Torino Court of Appeal (Foodora)13.
Are these different outcomes depending on diverging terms and conditions proposed by platforms in the various countries? Or are they perhaps related to different legislative definitions and employment tests available in the considered jurisdictions?
The answer to both questions is negative. Platforms terms and conditions are rather similar across countries. As for the classification of "employees", in all of these countries, judiciaries have been in charge of shaping the definition of subordinate employment, since national legislations traditionally have rarely provided a definition of "employee" or "employment contract". And the employment tests elaborated by Labour Courts and Tribunals are remarkably similar, no matter if civil law or common law systems (Freedland and Countouris 2011). They can be approximately synthesized as follows:
— Legal subordination (civil law) / control test (common law): the employer dictates the manner in which the work is to be performed;
— Integration into the employer's business: the employee forms an integral part of the employers' business organisation, which determines the organizational framework (i.e. time and place of work);
5 Cour d'appel de Paris, pôle 6 — ch. 2, arrêt du 10.01.2019. Available at: https://www.legalis.net/juris-prudences/cour-dappel-de-paris-pole-6-ch-2-arret-du-10-janvier-2019 (accessed: 28.01.2022).
6 Labor Chamber of the Cour de Cassation. 04.03.2020. No 19-13.316. Available at: https://www. courdecassation.fr/IMG/20200304_arret_uber_english.pdf (accessed: 28.01.2022).
7 Corte di cassazione. Sentenza n. 1663 del 24.01.2020. Available at: https://www.lavorodirittieu-ropa.it/sentenze/sentenze-lavori-atipici/414-corte-di-cassazione-sentenza-1663-del-24-1-2020 (accessed: 28.01.2022).
8 La Sentencia del juzgado n° 6 de Valencia n° 244/2018 de 1 de junio. Available at: https://adriantod-oli.com/2018/06/04/primera-sentencia-que-condena-a-deliveroo-y-declara-la-laboralidad-del-rider/ (accessed: 28.01.2022).
9 Fair Work Commission Decision, Joshua Klooger V Foodora Australia Pty Ltd (U2018/2625) 16.11.2018. Available at: https://www.iwc.gov.au/documents/decisionssigned/html/2018fwc6836.htm (accessed: 28.01.2022).
10 Tribunal Supremo, Sentencia no. 805/2020, 25.09.2020. Available at: http://www.poderjudicial.es/ search/AN/openDocument/05986cd385feff03/20201001 (accessed: 28.01.2022).
11 The Court of Appeal (Civil Division), case no. A2/2017/3467, 19.12.2018. Available at: https://www. judiciary.uk/wp-content/uploads/2018/12/uber-bv-ors-v-aslam-ors-judgment-19.12.18.pdf (accessed: 28.01.2022).
12 SJS n° 39 284/2018, 3 de Septiembre de 2018, de Madrid. Available at: https://jurisprudencia.vlex. es/vid/740259545 (accessed: 28.01.2022).
13 The Court of Appeal of Turin (by judgment no. 26 of 4-2-2019. Available at: https://ichinobrug-natelli.it/en/foodora-riders-comment-by-atty-marco-paoletti-on-the-judgment-of-the-court-of-appeal-of-turin/ (accessed: 28.01.2022).
— Dependency (civil law) / economic reality test (common law): the employee does not determine independently his own conduct on the market, but is entirely dependent on his principal (he/she has no risk of loss, no own clientele, no assets or investments, etc.);
— Personality of work: the individual does not have a right to send along a substitute to provide the work;
— Legal continuity / mutuality of obligations (English courts): commitment to an ongoing engagement, involving the employer's obligation to provide a reasonable amount of work and the employee making himself available to perform that work under the employer's direction.
Other similarities have concerned the application of the primacy of facts principle, according to which Judges go beyond the description of the relationship given by the parties, looking at the way the relationship between them is carried out; and the application of the multi-factor tests/typological method, combining the different indicia coming from employment tests: the greater the number of employment indicia have been satisfied, the more likely it is that the individual will be an employee.
The application of traditional employment tests has been quite complicate here. Quoting the District Court of California in a case concerning Lyft, Uber's main competitor in the United States, it is like handling "a square peg and asked to choose between two round holes", because "test the California courts have developed over the 20th century for classifying workers isn't very helpful in addressing this 21st century problem"14. Same conclusion can be true for all the jurisdictions considered here.
More precisely, while the personality of work is usually confirmed by gig-economy arrangements, which do not normally admit the worker to send along a replacement, the traditional control test, as many decisions seem confirming, is more difficult to meet15. Even if a certain control was recognized, for example, in the relationship between Uber and its drivers, which "retain very little freedom to determine their working conditions since ride fees are not negotiable and they have to comply with a detailed performance protocol"16; the conclusion was that the platform's control over the worker's performance did not have the same extent of that of a "traditional" employer17. The fact that the workers retain the freedom to set up their own work schedule, deciding when, for how long and where they wish to work time-after-time is for some Courts also significant of a not complete integration of gig-workers into the organisation set up by platforms18. As far as the more comprehensive economic reality test is concerned, the degree of dependency of the
14 United States District Court, Northern District of California, Cotter et al. v. Lyft Inc., Order Denying Cross-Motion for Summary Judgement, 11.03.2015, Document 94. Available at: http://old.adapt.it/ adapt-indice-a-z/wp-content/uploads/2015/06/Cotter_Lyft.pdf (accessed: 28.01.2022).
15 Conseil de prud'hommes de Paris (Labour Tribunal), Florian Menard v. Sas Uber France and Societe Uber B V
16 United States District Court Northern District of California Case No. C-13-3826 EMC, O'Connor v. Uber Technologies, Inc. et al. Available at: https://casetext.com/case/oconnor-v-uber-techs-6 (accessed: 28.01.2022).
17 O'Connor quote above and United States District Court Northern District of California, Case No. 13-cv-04065-VC, Cotter et al. v. Lyft Inc. Available at: http://www.cand.uscourts.gov/home (accessed: 28.01.2022).
18 This was, for example, the conclusion of the Australian Fair Work Commission, Kaseris v. Rasier Pacific. URL: https://www.fwc.gov.au/documents/decisionssigned/html/2017fwc6610.htm (accessed: 28.01.2022).
worker on the platform looks again quite blurred. Let us consider for a moment again the example of Uber drivers. On the one hand, they seem to work for Uber, which decides the market strategies, deals with the clients, coordinates the result of workers' performances; on the other hand, the drivers do not get a fixed remuneration, they own the car — which is the relevant asset for the service at stake — all related expenses are for them, if something goes wrong, they can even run a loss.
Though the employment tests so far considered can somehow be adapted to gig-economy workers, the legal continuity / mutuality of obligations test is completely out of line. Platform workers do not have any obligation to turn up for work if they do not want to and, in turn, platforms do not have any obligation to provide gigs to the workers.
In the light of the above, it is therefore not a surprise that the application of the mentioned employment tests to the classification of gig-workers has led to differing outcomes in courts' decisions, even within the very same jurisdiction. Provided that organization of platform work and employment tests available are very similar across the various national jurisdictions considered, the different classification of workers seems to have depended on the way the tests have been used. More in general, it looks like that the decision to consider or ignore mutuality of obligations test/legal continuity has been the decisive factor. When judges had taken it into account, they attributed to it primary importance, and they went on saying that the other factors weighted in favour of an "independent contractor" status. On the contrary, when they had neglected it, they moved in the opposite direction.
However, the trend is leading towards the overcoming of the consideration traditionally given to the element of legal continuity and therefore to an adaptation of the tests to the gig-economy models. In particular, French and Spanish Courts, especially after the Supreme Courts decisions, are increasingly giving little credit to the casual/on-call nature of the work relationship.
However, there is still a big deal of uncertainty and issues to be addressed about the gig-workers classification. For a variety for reasons:
(a) In some cases, Supreme Court decisions have not been followed by subsequent lower courts decision19. The fact that platforms' organization is constantly adapting in order to exclude the employment status of the workers is also important. s not of secondary importance the fact that platforms' organization is constantly adapting in order to exclude the employment status.
(b) Judicial subjectivism — that is to say, a decision based on the judge own value and conception of the good, rather than on objective application of the law — looks spreader than usual here, mostly because of the poor guidance provided by traditional employment tests. This has created legal uncertainty, which is never good for the legal system and its legitimacy, and for the players here involved: platforms and workers.
(c) Moreover, some platforms have applied the rulings only to plaintiffs, without extending it to other workers employed. In some cases, arbitration clauses or choice of foreign courts are a way for preventing lawsuits in advance.
19 This was the case of the Florence Tribunal, P. Tosi, Riders, il Tribunale di Firenze nega ai sindacati l'azionabilita dell'art. 28 St. Lav., in Guida al Lavoro, 2021, n. 9, p. 26. Available at: http://www.bollettinoad-apt.it/ancora-sui-riders-cosa-dice-concretamente-il-tribunale-di-firenze (accessed: 28.01.2022).
(d) Last but not least, the re-classification as "employees" of people working though platforms is not always the best solution, also for workers, even if this is rarely considered by literature.
2.2. How to move past uncertainty
The analyses of case-law confirms that, despite the stabilizing trend of decisions, there is still need of regulatory solutions aiming at granting gig-workers access to employment and social protection, when appropriate. The opinions of scholars on the possible regulatory approaches to the issue at stake can be gather around three options (Stewart and McCrystal 2019).
2.2.1. New legislative definition of "employment".
A first solution could be that of providing a new broader legislative definition of "employment" able to include gig-economy workers. This new definition should probably follow those Court decisions which have given no relevance to mutuality of obligations. This way, many forms of casual work would end up into the "subordinate employment" category, receiving full employment rights.
We believe that such a solution might create more problems that it would solve. First of all, if a detailed legislative identification of the boundaries between "employment" and "self-employment" was provided judiciaries will inevitably lose room for adapting the "employment status" to the social prevailing model of "employee", as they have been doing so far. So, if the legislative definition turns out to be too broad or too strict at a precise moment in time, there will be little they can do to adapt it.
Furthermore, there are substantial implications stemming from a more inclusive definition of employment, which need to be considered. Many employment rights are customised on the traditional model of employment, and hence difficult to adapt to a model of work based on casual engagements. Some examples are certain working time limitations, paid leaves, remedies for wrongful or unfair termination. For example, working time limitations assume the unilateral determination of the working hours by the employer, so they limit it, in order to safeguard employees' health. But what if an employees can determine their own working time? New interests come into play and the rule should be different.
But even assuming that the mentioned employment rights can be somehow adapted to gig-workers, there is another major, less theoretical, objection to consider: are we really sure that by considering gig-workers as "employees" we would be doing them a favour? It should not be forgotten that the employment status comes with employment rights but also duties. For instance, multiple jobs undertaken for competing platforms, not unusual for gig-workers, will be probably not admitted. Moreover, if platforms were forced to consider all workers as "employees", they would probably change the contracts with the workers in order to reflect the mandatory employment status. Gig-workers would then become "standard" employees and platforms would start behaving as "standard" employers. Workers would lose flexibility (they could not decide any longer if and when to work), and probably would decide to abandon gig-work. At least, this could be the case for those
doing it a secondary source of income (the majority)20. But, before that, many platforms would probably quit the market, because their business model can only be competitive and profitable as long as it is based on independent contractors' cooperation.
At the end of the day, including gig-workers in the 'employment' category in an a-selective way could be counterproductive: for platforms, probably forced out of the market; for consumers, losing the access to good-quality cheap services; for workers, losing job opportunities.
2.2.2. Intermediate category for gig-workers
A less radical solution is suggested by British, Spanish and Italian decisions. When an "intermediate" category is given by the legislation, it probably represents the relevant category for platforms workers; at least for those operating for 'vertically integrated' platforms.
Some authors have recently advocated for the creation of a new intermediate category, based on the concept of economic dependence (Harris and Krueger 2015), which accurately describes the situation of worker on-demand via app providing a personal service mainly for one platform. According to these proposals, the main client of dependent contactors should be considered responsible for some employment protections.
It is a very evocative possibility. Nevertheless, it reveals considerable problems in practice. First of all, as the attempts made by some legal systems testify, it is really difficult to find a suitable definition for this category, a definition able to identify the "weak" contractors (De Stefano 2016; Cherry and Aloisi 2017). Thus, rather than providing a secure solution to issues affecting gig-workers, a new category would probably lead to more uncertainty and litigation. The empirical analysis of existing intermediate categories raises a second major counterargument. As a matter of fact, they have often created a good opportunity for a misclassification of workers hitherto considered "employees" into a category of atypical and under-protected workers (Countouris 2007).
At the end of the day, the creation of new intermediate categories appears to be a loselose solution, not able to solve the problems for workers of the gig economy and possibly creating new ones for "regular" employees.
2.2.3. Universal rights for personal work relations
A third option deals with the issue from a reversed perspective: rather than proposing a change of the employment categories, it proposes a different distribution of rights between employment and self-employment.
The whole idea behind it is that "gig" work is not "paradigm shifting" (Davidov 2017) and does not bring anything really new, since some of its features can be traced back to the earliest days of capitalism (Finkin 2016). It is rather a further confirmation that the dichotomy all or nothing attached to employment/self-employment is outmoded. More precisely, platform work seems not putting into question the employment contract as main gateway to employment protections. It challenges the idea, prevailing for a large part of the twentieth century, of providing protections only for those who, in order to make a living,
20 According to the data provided by (Pesole et al. 2018), out of 24 million of workers involved to some extent with the gig-economy, only 3 million do it as a main job, while 9 million perform it as a secondary source of income and almost 12 million as a marginal or even sporadic source of income.
had to accept subordinate employment and ignoring those who, for the same purpose, had invested in their self-organisation. Over the last 30 years or so, self-employment has clearly become a survival strategy for those who are not able to get a "regular" j ob through an employment contract, typically those belonging to the weakest segments of the labour market (migrants, young workers, disable, etc.) (Weil 2015). Gig economy workers are just the latest example of low-income persons being particularly attracted by self- employment.
It would be now appropriate and desirable to equip all workers performing personal work, whether employees or not, with some "core rights." This has already been proposed by highly authoritative scholars, like Marco Biagi with the "Statuto dei lavori" ("Jobs Statute") (Biagi 1998), and Mark Freedland with the "personal employment contract" construction (Freedland and Countouris 2011).
In order to decide which employment protections could be extended beyond the employment contract, it is possible to make use of a purposive approach (Davidov 2016), applying it to possible future legislation. If we consider, for example, the right to a minimum wage, it is necessary to understand whether, according to its justifications and purposes, the right can be provided with a scope broader than just 'employees'. Since goals of the minimum wage are commonly intended to be a reduction of in-work poverty and respect for human dignity, there is merit in extending the right to the minimum wage to all personal work relations (Menegatti 2018). These goals are clearly appropriate for everyone who personally performs any work or service for another party, no matter whether he is an employee under the employer's control and integrated to his/her business or an independent contractor self-organizing his/her work. Many independent contractors as well as employees get their livelihood by means of their personal work, selling their energies, often to just one client. Therefore, they might have dignity only if their work receives fair compensation. Otherwise, they might fall into in-work poverty and not be able to participate in society.
3. Conclusion
The controversial classification of platform workers, also emerging from the diverging labour courts and tribunal decisions from all over the world, is supporting the idea that a legislative intervention is needed to protect workers and move past the uncertainty still pervading the judicial approach.
We considered three different options and shared the opinion that it is not worth changing our understanding of employment relations because an increasing but still small minority of workers (gig-workers) are difficult to include into current customary boundaries of the "employee" category. The best way to protect workers involved in the gig-economy is thinking bigger and think about the extension of some suitable employment rights and social protections beyond the employment contract, towards all those who personally performs any work or service for another party, from whose business they are functionally and operationally dependent.
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Received: October 10, 2021 Accepted: December 14, 2021
Author's information:
Emanuele Menegatti — PhD; e.menegatti@unibo.it
