Doing Business Right – Monthly Report – March & April 2018 - By Abdurrahman Erol

Introduction

This report compiles all relevant news, events and materials on Doing Business Right based on the daily coverage provided on our twitter feed @DoinBizRight and on various websites. You are invited to complete this compilation via the comments section below. Feel free to add links to important cases, documents and articles we might have overlooked.


The Headlines

Shell-Eni Bribery Case: On 5 March, the corporate bribery trial against oil companies Shell and Eni was postponed to 14 May by a court in Milan, Italy.  The charges against the companies are bribery and corruption in the 2011 purchase of a Nigerian offshore oilfield, one of the most valuable oilfields in Africa. Although both firms denied the charges, the corruption watchdog Global Witness claimed that hundreds of millions of dollars had been paid to Nigeria’s former president and his former oil minister as pocket bribes. Global Witness calls the case one of the biggest corruption scandals in the history of the oil sector. The trial in the Milan court is expected to last 12-18 months.

Jesner v. Arab Bank: On 24 April, in a 5-4 vote, the US Supreme Court ruled in the Jesner v. Arab Bank case that foreign corporations cannot be brought before US courts under the Alien Tort Statute (ATS). Between 2004 and 2010, thousands of foreign nationals sued Arab Bank under the ATS, claiming that the Bank’s officials allowed money transfers through the New York branch of the Bank to Hamas who committed violent acts in Israel and Occupied Palestinian Territories. The Supreme Court held that foreign corporations cannot be sued under the ATS. Furthermore, the Court claimed that international law today does not recognize “a specific, universal, and obligatory norm of corporate [tort] liability”, which is a prerequisite to bringing a lawsuit under the ATS. In the Court’s lead opinion, Justice Kennedy stated that "Courts are not well suited to make the required policy judgments that are implicated by corporate liability in cases like this one.” In her dissenting opinion joined by three other justices, Justice Sotomayor claimed that the decision "absolves corporations from responsibility under the ATS for conscience-shocking behavior."

Fifth Anniversary of Rana Plaza: April 24th also marked the fifth anniversary of the deadly collapse of Rana Plaza in Dhaka, Bangladesh. Rana Plaza was a five-story commercial building which housed several garment factories employing around 5000 people. The global outcry after the disaster which claimed at least 1134 lives led to numerous initiatives to change business-as-usual in the garment and textile supply chains in Bangladesh and beyond. Despite these initiatives which employed various approaches to the issue of worker safety in the supply chains, it is widely acknowledged that there is still a long way to go to create a safe working environment for workers in the garment and textile supply chains. On 12 April, the Asser Institute hosted a one-day conference on Rana Plaza to take stock of the regulatory and policy initiatives aimed at improving workers’ safety in the garment supply chain (You will find our background paper here).

 Okpabi v. Royal Dutch Shell - Episode. 3? On 27 April, more than 40 UK and international human rights, development and environment NGOs, later supported by academics from different states, urged the UK Supreme Court to allow two Nigerian fishing communities to appeal against the Okpabi v Royal Dutch Shell ruling of the Court of Appeal in February which denied responsibility for UK-based Royal Dutch Shell for the pipeline spills, dating back as far as 1989, which affected approximately 40000 Nigerian farmers and fishermen. The NGOs claimed that the Court of Appeal’s decision erred in many ways as it seriously restricts parent company liability and limits the options available to victims of corporate human rights violations seeking remedy in the UK.More...


Five Years Later: Evaluating the French and Dutch responses to Rana Plaza - By Abdurrahman Erol

Editor’s note: Abdurrahman is currently working for Doing Business Right project at the Asser Institute as an intern. He received his LL.M. International and European Law from Tilburg University and currently he is a Research Master student at the same university.

 

The collapse of the Rana Plaza attracted public attention from various parts of the world. As a result, the demand to ensure that businesses do not contribute to or commit human rights violations, particularly multinational enterprises (MNEs) which can easily engage in forum shopping between states with lax regulations, started to make itself heard. This increased public interest drove national governments to start addressing this issue in an attempt to prevent MNEs from getting involved in human rights abuses along their supply chains.  In this respect, to deal with the human rights abuses committed by MNEs in the ready-made garment (RMG) sector and beyond, numerous transnational and national initiatives have emerged in different forms since the Rana Plaza disaster. These initiatives include agreements (e.g. the Bangladesh Accord on Fire and Building Safety)  with binding commitments, traditional voluntary CSR-based multi-stakeholder initiatives (e.g. the Alliance for Bangladesh Worker Safety), domestic legal (e.g. the UK Modern Slavery Act and the French law on the duty of vigilance), administrative measures (e.g. the reform of the Department of Inspections for Factories and Establishments in Bangladesh for better factory and labour inspections) or agreements between governmental bodies, businesses and some other stakeholders (e.g. the German Partnership for Sustainable Textiles and the Dutch Agreement on Sustainable Garment and Textile).

These concerted efforts, to ensure responsible business conduct show an extreme variety in terms of their scope, approaches and parties involved.  In particular, the French law on the duty of vigilance and the Dutch agreement on sustainable garment will be the focus on this blog since while the adoption of the former was accelerated by the disaster, the latter was an indirect response to it. It is crucial to scrutinise the implementation of these initiatives and whether or not they positively transform the business-as-usual in the RMG sector. In this blog, after brief explanations of the French and Dutch initiatives, some of the concerns and problems, which may be encountered in their implementation process, will be presented. More...

FIve Years Later: Why do the Accord, the Alliance and the National Initiative perform differently in terms of remediations? - By Abdurrahman Erol

Editor’s note: Abdurrahman is currently working for Doing Business Right project at the Asser Institute as an intern. He received his LL.M. International and European Law from Tilburg University and currently he is a Research Master student at the same university.

After the collapse of Rana Plaza which claimed the lives of 1,138 mostly garment workers and left thousands more injured, the global outcry for improved worker safety in the ready-made garment (RMG) industry of Bangladesh caused by global public interest, media attention and harrowing stories of workers has led to the emergence of various international and national initiatives to address the issue. Three of these initiatives are the Accord on Fire and Building Safety in Bangladesh (the Accord), the Alliance for Bangladesh Worker Safety (the Alliance) and the National Tripartite Plan of Action on Fire Safety and Structural Integrity in the Garment Sector of Bangladesh (the National Initiative).

Although on the surface, these initiatives appear to be quite similar and have the primary objective of improving worker safety in the RMG sector of Bangladesh through inspections and identification of fire, structural and electrical remediations for garment factories, they show considerable differences when looked more carefully. These differences influence the outcomes of the three initiatives on factory remediation for fire, structural and electrical safety in the RMG sector in Bangladesh. In this blog, after a brief description of each initiative (for a broader description, see here), I will discuss the effectiveness of the remediation processes introduced by the Accord, the Alliance and the National Tripartite Plan.More...



Five Years Later: Locating justice, seeking responsibility for Rana Plaza - By Raam Dutia

Editor's Note: Raam is currently an intern with the Doing Business Right team at the Asser Institute. He recently received his LL.M. Advanced Studies in Public International Law (cum laude) from Leiden University and has worked at an international law firm in London on a range of debt capital markets transactions

The collapse of the Rana Plaza building on 24 April 2013 in Bangladesh left at least 1,134 people dead and over 2,500 others wounded, while survivors and the families of the dead continue to suffer trauma in the aftermath of the disaster. This first blog of our special series assesses the extent to which litigation and particular "soft" mechanisms have secured justice and compensation for victims and brought the relevant actors – whether global brands or individuals – to account for their alleged culpability for the collapse. To do this, it firstly examines the avenues that have been taken to hold corporations legally accountable in their home jurisdictions for their putative contributions to the collapse on the one hand, and individuals (particularly local actors) legally accountable before the courts in Bangladesh on the other. It then considers the effects of softer mechanisms aimed at compensating victims and their dependants. More...



Five Years Later: What have we learned from the Rana Plaza disaster?

Five years ago, the Rana Plaza building collapsed, taking with it at least 1134 innocent lives and injuring more than 2000 others. This industrial tragedy of incomparable scale constitutes a milestone in the business and human rights discussion. There will always be a 'before' and an 'after' Rana Plaza. Its aftershock triggered potentially seismic changes in the regulation of transnational corporations, such as the much-discussed French law on the ‘devoir de vigilance’. It is, therefore, essential to scrutinize with great care the aftermath of the tragedy: the innovations it triggered in the transnational regulation of the garment supply chain, the different processes initiated to compensate the victims, and in general the various hard and soft, private and public, legal and non-legal initiatives stemming from the urge to tackle a fundamental injustice. Thus, in the days to come we will feature a series of blogs on Rana Plaza and its consequences prepared by our outstanding interns: Raam Dutia and Abdurrahman Erol.More...

Background paper - Rana Plaza: Legal and regulatory responses - By Raam Dutia & Abdurrahman Erol

Editor’s note: You will find attached to this blog the background paper to the event Five Years Later: Rana Plaza and the Pursuit of a Responsible Garment Supply Chain hosted by the Asser Institute in The Hague on 12 April. 


Background paper: executive summary

Raam Dutia & Abdurrahman Erol (Asser Institute)

The collapse of the Rana Plaza building on 24 April 2013 in Savar, Bangladesh, left at least 1,134 people dead and over 2,500 others wounded, while survivors and the families of the dead continue to suffer trauma in the aftermath of the disaster. The tragedy triggered a wave of compassion and widespread feelings of guilt throughout the world as consumers, policy makers and some of the most well-known companies in Europe and North America were confronted with the mistreatment and abject danger that distant workers face in service of a cheaper wardrobe.

Partly in order to assuage this guilt, a number of public and private regulatory initiatives and legal responses have been instituted at the national, international and transnational levels. These legal and regulatory responses have variously aimed to provide compensation and redress to victims as well as to improve the working conditions of garment workers in Bangladesh. Mapping and reviewing how these responses operate in practice is essential to assessing whether they have been successful in remedying (at least partially) the shortcomings that led to the deaths of so many and the injury and loss suffered by scores more.

This briefing paper outlines and provides some critical reflections on the steps taken to provide redress and remedy for the harm suffered by the victims of the catastrophe and on the regulatory mechanisms introduced to prevent its recurrence. It broadly traces the structure of the panels of the event. 

In line with Panel 1 (Seeking Justice, Locating Responsibility), the paper begins by focusing on litigation that has been conducted to secure justice and compensation for the victims, as well as to bring the relevant actors to account for their alleged culpability for the collapse. To this end, the paper examines the avenues that have been taken to hold corporations legally accountable in their home jurisdictions for their putative contributions to the collapse on the one hand, and individuals (particularly local actors) legally accountable before the courts in Bangladesh on the other; it then considers softer mechanisms aimed at compensating victims and their dependants. 

In keeping with Panel 2 (Never again! Multi-level regulation of the garment supply chain after Rana Plaza: Transnational Responses), the paper then considers the transnational (public and private) regulatory responses following the tragedy, enacted by stakeholders including NGOs, industry associations, trade unions and governments and largely connected to issues surrounding labour standards and health and safety.

Finally, in line with Panel 3 (Never again! Multi-level regulation of the garment supply chain after Rana Plaza: National Responses), the paper looks at numerous (soft and hard) regulatory developments at the national level in response to the Rana Plaza collapse. It charts the legislative response by the government of Bangladesh to attempt to shore up safety, working conditions and labour rights in garment factories. It also focuses on legislative and other arrangements instituted by certain national governments in the EU, and how these arrangements relate to the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines on Multinational Enterprises.


Download the full paper: RanaPlazaBackgroundPaper.pdf (3.5MB)

International Arbitration of Business and Human Rights Disputes: Part 3 - Case study of the Accord on Fire and Building Safety in Bangladesh’s binding arbitration process - By Catherine Dunmore

Editor's Note: Catherine Dunmore is an experienced international lawyer who practised international arbitration for multinational law firms in London and Paris. She recently received her LL.M. from the University of Toronto and her main fields of interest include international criminal law and human rights. Since October 2017, she is part of the team of the Doing Business Right project at the Asser Institute.

Background

At the United Nations Forum on Business and Human Rights from 27-29 November 2017 in Geneva, discussions focused on the central theme of Realizing Access to Effective Remedy. With an increasing focus on this third pillar of the United Nations Guiding Principles on Business and Human Rights, a working group of international law, human rights and conflict management specialists (Claes Cronstedt, Jan Eijsbouts, Adrienne Margolis, Steven Ratner, Martijn Scheltema and Robert C. Thompson) has spent several years exploring the use of arbitration to resolve business and human rights disputes. This culminated in the publication on 13 February 2017 of a proposal for International Business and Human Rights Arbitration. On 17 August 2017, a follow-up Questions and Answers document was published by the working group to address the principal questions raised about the proposal during the three-year consultation with stakeholders. Now, a drafting team is being assembled, chaired by Bruno Simma, to prepare a set of rules designed specifically for international business and human rights arbitration (the Hague International Business and Human Rights Arbitration Rules) in consultation with a wide range of business and human rights stakeholders. Once drafted, the rules will be offered to the Permanent Court of Arbitration and other international arbitration institutions and could be used in arbitration proceedings managed by parties on an ad hoc basis.


Introduction

Part 1 of this three-part blog series gave an overview introduction to the proposal for international business and human rights arbitration. Part 2 focused on the potential advantages of using international arbitration to resolve such disputes, as well as the substantial challenges the proposal will face in practice. This Part 3 now provides a case study of the Accord on Fire and Building Safety in Bangladesh’s binding arbitration process. More particularly, it will provide (1) a brief background to the Accord on Fire and Building Safety in Bangladesh, as well as (2) an analysis of its binding arbitration process, before (3) discussing the arbitrations brought by IndustriALL Global Union and UNI Global Union against two global fashion brands under the Accord on Fire and Building Safety in Bangladesh. More...




Doing Business Right – Monthly Report – October 2017. By Catherine Dunmore

Editor's note: This report compiles all relevant news, events and materials on transnational business regulation based on the daily coverage provided on our twitter feed @DoinBizRight. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked. More...

Doing Business Right Event! Supply chain regulation in the garment industry on 29 June @Asser Institute

The negative impact on human rights of what we wear is not always well-known to the consumer. Our clothing consumption has increased over five times since the Nineties. At the same time, the business model of certain fashion brands is too often dependent on widespread human rights and labour rights violations to be profitable, cheap, and fast. The 2013 tragedy of Rana Plaza, where more than 1100 garment workers died, gives us just a small hint of the true costs of our clothes and footwear. Efforts by governments to tame the negative effects of transnational supply chains have proven difficult due to the extreme delocalisation of production, and the difficulty to even be aware of a company’s last tier of suppliers in certain developing countries. More...

Doing Business Right Blog | Regulating the Gig Economy: A Workers’ Rights Perspective - By Elisa Chiaro

Regulating the Gig Economy: A Workers’ Rights Perspective - By Elisa Chiaro

Editor’s Note: Elisa Chiaro is a legal consultant focussing on Business and Human Rights and International Criminal Law. In 2016 she completed an LL.M. at SOAS, University of London. Before that she worked for five years as international corporate lawyer both in Italy and UK. She is admitted to the Bar in Italy.

  

1.      Introduction

In current discourse, the most pressing issues concerning human rights and business are often associated with the developing countries to which manufacturing is outsourced. However, the “western world” also faces new challenges as far as workers’ rights are concerned.

It is cheap and convenient for people to book a car ride or order their favourite takeaway meal at a few swipes of their smartphone. App-based service companies are thus very popular among consumers – and are consequently flourishing. Conversely, some doubts have been cast on the fairness of the working conditions of people contracted by these companies. A central issue in this respect relates to the status of their workers, who on paper are self-employed, but in reality are subject to the control of the company, a condition which clashes with being independent. This post aims firstly to analyse the labour conditions of gig economy workers in Europe, with a focus on some of the main service platforms, namely Uber, Deliveroo, Foodora, and Hermes Parcels: the majority of these companies, Uber in particular, are transnational, operating in many national markets and adopting the same business model based on flexible work and lack of security for workers in each market. Secondly, it will scrutinise how National and European institutions and courts are augmenting gig economy workers’ conditions for the better. The issue is crucial in the UK, especially following September’s decision by Transport of London (“TFL”) to reject Uber’s application for a new London license, but legal disputes have also started in other countries (in, among others, the UK, Italy and the USA). The UK Parliament is also discussing the matter, and the EU Commission has started a round table with trade unions and employers to find new solutions to address the issue.

 

2.      Gig economy: flexibility vs security

The development of new digital technologies, in particular ride-hailing and food delivery apps easily accessible to everyone who possesses a smartphone, has undoubtedly changed our lives. However this phenomenon also has some downsides which are clearly visible in the context of the gig economy. Despite the fact that, from the consumer’s point of view, these services are efficient (both in terms of time and cost) and convenient, they have created a new category of so-called workers “on tap”, as the The Economist labels them.[1] The term “gig work” was first used at the beginning of the 20th century for jazz musicians who got their wage (“gig”) every night after their performance. In 2009, the expression “gig economy” was adopted to describe those who, during the financial crisis, started to engage in numerous part-time jobs.[2]

A key company in the gig economy is Uber. Founded in San Francisco in 2009, it is a ride-hailing app, and now operates in 633 cities worldwide. The European subsidiary of the American company is incorporated in The Netherlands. The company maintains that in London, a focal hub of its business, it has around 3.5 million users (this number refers to anyone who has used the service in London in the period July-September 2017). Another important actor is Roofoods Ltd, operating as Deliveroo, a London-based food-delivery company founded in 2013 transporting restaurant orders by bicycle, motorcycle or car couriers. It operates in 12 countries and (as of September 2016) provides jobs to around 20,000 people.[3] Foodora, a German company similar to Deliveroo, is involved in food delivery in more than 260 cities worldwide and employs around 22,000 people. Other significant companies in this space include parcel delivery companies such as Hermes. The company runs a UK logistics and delivery business, with around 2,800 employees and a network of 10,500 self-employed delivery couriers who work on a day-to-day basis.[4]

These companies certainly appear to be creating jobs: in London around 40,000 drivers work for Uber and, in 2015, Uber cars in New York outnumbered traditional yellow cabs.[5] Moreover, most of the services offered do not imply extra costs; on the contrary, using these services can be cheaper than procuring them in more traditional and longer-established ways.

The motto of most of the companies mentioned above is “flexibility”, which is closely intertwined with the fact that all of the people that drive or ride for them are self-employed. However, where for some people being self-employed is a free and conscious choice motivated by “autonomy and flexibility”, for others it constitutes a “necessary choice” because they do not have another “traditional” job or, alternatively, because their traditional job’s income is insufficient.[6] Clearly flexibility is not negative tout-court, unless it is one-sided. It might be positive insofar as it allows for the creation of potential new job opportunities benefiting more people, but it might also become problematic if the model is adopted just to cut costs, and if the level of control the employer exerts over its workers becomes too great. As stated in the July 2017 Taylor Review of Modern Working Practices (“Taylor Review”), drafted by an independent panel of experts upon the UK Government’s request, “[b]eing able to work when you want is a good thing; not knowing whether you have work from one day to the next when you have bills to pay is not.”[7] The crucial point goes as follows: describing the employment status of gig economy workers as self-employed, while in reality their freedom is very limited, will deprive them of some fundamental labour rights, such as sick pay, holiday leave, and entitlement to the national minimum wage, among other rights.

 

3.      The UK approach: TFL decision and UK Parliament enquiry

In the UK the debate surrounding on-demand workers’ rights is very lively, and reached its peak with September’s decision by TFL, openly supported by London Mayor Sadiq Khan, not to renew Uber’s operating licence in London. The decision was justified due to Uber’s “lack of corporate responsibility” but it focused specifically on issues linked to passenger safety.[8] However Sadiq Khan in his article published in The Guardian, supporting TFL’s decision, specifically stated that the “regulatory environment is critical in protecting Londoners’ safety, maintaining workplace standards for drivers […].”[9]The company, following the apology of the Chief executive Dara Khosrowshahi for its past actions, appealed against the decision and in any case will continue operating until the appeal decision is issued,[10] as provided for in The Private Hire Vehicles (London) Act 1998. Many criticisms were raised against TFL’s decision: on one side by consumers (a petition to save Uber was set up and in a few days obtained more than 800,000 signatures) and by some drivers on the other. They claimed that, instead of solving workers’ problems, the decision harmed Uber drivers and was just aimed at protecting Black cab drivers, the majority of which are allegedly white and English.[11]

The conditions of gig economy workers, and in particular Uber’s drivers, were analysed back in December 2016 in a report by MP Frank Field, titled “Sweated Labour: Uber and the ‘gig economy’” (based on submissions from 83 private hire drivers, the majority of whom worked for Uber). It concluded that despite being self-employed, “[d]rivers cannot set their own fares, or choose which jobs to undertake, for example. Many are totally dependent on Uber for their income and they all must meet certain conditions to continue receiving work.” Moreover the report stated that drivers are taking home around £2 per hour – less than a third of the national living wage – due primarily to the costs they have to bear, namely a vehicle that meets Uber standards, plus refuelling and maintaining it. Interestingly, one of the recommendations listed in the report was towards TFL, which was called on to consider the abovementioned elements of the report when it came to renewing Uber’s operating licence.       

Even if some positive results have been achieved (for example, in April 2017 Uber declared that its drivers could sign up to a security scheme with the aim to cover them in the event they were unable to work), working conditions are still inadequate. This is clear from the findings of the UK House of Commons Work and Pension Committee (“WPC”), which more recently scrutinised issues connected to the gig economy. The WPC held that, instead of flexibility, workers suffered “low pay, inflexibility in working times, long hours, instability, and difficulties in taking time off (such as for a holiday or for sick leave).”[12] Specifically referring to the Deliveroo contract, the WPC underlined how the company explicitly denied their workers the right to present any claim to challenge their employment status (Clause 2.2).[13] Moreover Clause 2.3 of the contract states that if, despite this Clause 2.2, the worker presents any claim against the company, he/she “[…] undertake[s] to indemnify and keep indemnified Deliveroo against costs (including legal costs) and expenses that it incurs in connection with those proceedings, and [the worker] agree[s] that Deliveroo may set off any sum owed to [the worker] against any damages, compensation, costs or other sum that may be awarded to [the worker] in those proceedings.” 

Finally, in October 2017 the representatives of Deliveroo, Uber and Hermes Parcels appeared before the UK Parliament Business, Energy and Industrial Strategy Committee (“BEIS Committee”) to give evidence and discuss, among other things, the Taylor Review. The three representatives of, respectively, Deliveroo, Hermes and Uber, argued that flexibility was crucial and benefitted riders and drivers. Specifically, Deliveroo’s UK managing director claimed that at least 50 per cent of their riders were students carrying out paid work alongside other activities, and further stated that the additional labour rights for workers (if self-employed contractors were to be recognised as employed) would lead to a company cost increase of around £1 per hour of rider/driver time. Hermes director of legal and public affairs asserted that the recognition of workers’ employment status would cost the company around £58.8 million (given holiday pay, sick pay and National Insurance contributions).[14]  

 

4.      The judicial response

So far many cases against Uber have been brought before national courts on unfair competition claims: for instance in Italy, UberPop (the equivalent of UberX in the UK, one of the services offered by Uber, which connects unlicensed drivers with consumers) was banned for unfair competition in 2015 by the Milan Tribunal (in two decisions: on 25 May and confirmed on 2 July), decisions also upheld by the Turin Tribunal in March 2017, while in May 2017 the Rome Tribunal lifted the ban on UberBlack (Chauffeur-driven service), which it had previously imposed in April 2017. It is also worth noting that some cases relating to Uber have been brought before the CJEU. In the case C-434/15 (Asociación Profesional Elite Taxi v. Uber System Spain SL), despite the fact that the case was brought before the Spanish Court to cease Uber unfair competition acts, the Advocate General (“AG”) Szpunar’s Opinion of 11 May 2017 dealt also with labour law issues. The AG held that Uber could not be treated as a “mere intermediary between drivers and passengers. Drivers who work on the Uber Platform do not pursue and independent activity that exists independently of the platform.” (para. 56). In the case C-320/16 (Uber France SAS) the AG reaffirmed the same position in his Opinion of 4 July 2017 (paras. 16-17).

More interestingly in relation to the issues dealt with in this post are the legal disputes that gig economy companies have to face following challenges based on workers’ labour rights.

Hermes  is facing, on the one hand, an on-going dispute over employment status of some of its self-employed drivers, which should lead to a judgment at the beginning of 2018, and, on the other, is under the scrutiny of the UK Tax Authority (HRMC) on the employment status of the self-employed couriers who work for the company.

In October 2016, the London Employment Tribunal (“ET”) found that Uber drivers, when (i) the app is switched on, (ii) they are in the territory in which they are authorised to work, and (iii) they are willing/able to accept assignements, are working for Uber under a “worker” contract (para 86). The judges expressed their scepticism towards Uber’s claims to the contrary (para 87), stating that “[t]he notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our mind faintly ridiculous” (para 90). Moreover the tribunal held that the Uber driver’s right to be paid “does not depend on his achieving set unit of production, […] the Uber driver performs ‘unmeasured work’. The hours of the unmeasured work in any pay reference period are to be computed in accordance with NMWR [The National Minimum Wage Regulations 2015], reg. 45. In the ordinary case, the relevant hours are the ‘hours worked’ […].” (paras. 126-127). Uber has appealed this judgment and on 10 November 2017 the Employment Appeal Tribunal (“EAT”) dismissed the appeal confirming the ET’s findings. Uber declared that it will appeal the EAT decision.[15]

Also crucial was the February 2017 UK Court of Appeal decision on ‘self-employed’ plumbers, who, having worked for several years exclusively for Pimlico Plumbers, were entitled to workers’ rights. The case is now before the Supreme Court. Legal disputes are taking place also in other European Countries: early this month (October 2017) six Foodora riders took the company to the Turin Tribunal (Employment Section) in Italy, arguing that they were not self-employed and were instead entitled to proper workers’ rights. These riders were fired following their protests against bad working conditions, in particular low salary.[16] 

In the USA, litigation is helping the cause of gig economy workers. A 2015 Seattle City Council legislation (which allows drivers of app-based company such as Uber, to form unions and to have collective representation over fair working conditions) has been challenged twice in August this year: firstly by the US Chambers of Commerce, of which Uber is member, because it would stifle competition, and, more recently, by a group of 11 drivers, on the ground that it is against federal labour law and the right to free association. In both cases the US District Judge dismissed the challenges, but the parties declared they would appeal.[17] Moreover, a North Carolina Federal Court granted, in July this year, preliminary class action status to a minimum wage and overtime lawsuit filed by drivers working for Uber under the Fair Labour Standards Act. The main aim of the class-action is to challenge Uber misclassification of drivers as independent contractors. Around 18,000 drivers who opted out of arbitration are eligible to join the class-action.[18]

 

5.      The EU approach

The gig economy workers’ quest for rights reaches beyond national law. The EU Commission declared on 25 September that, in order to modernize legislation on employment contracts, it has started consultation with trade unions along with employers. The EU Commission is also moving forward the so-called European Pillar of Social Rights (“EPSR”), which consists of 20 key principles relating to equal opportunities and access to the labour market, fair working conditions, and social protection and inclusion.

One of the concrete aims of the EU Commission is to extend the scope of the directive on employment contracts (Council Directive 91/533/ECC, also known as the Written Statement Directive, which sets an obligation on the employer to provide, within two months from commencement, essential written information about the contract or employment relationship) to on-demand, voucher-based and platform workers.[19] Moreover the EU Commission would propose a new rule, which could “establish some basic rights such as the right to a degree of predictability of work for workers with very flexible contracts or the right to a maximum duration of a probation period.”[20] It has been noted that, on the one hand, the Commission proposal might raise costs for companies like Uber but, on the other, the protection for workers might not be applicable to self-employed workers, creating “a loophole for employers such as Uber and Deliveroo.”[21]

 

6.      Concluding remarks

The technology-driven economy has brought numerous advantages to our everyday lives. It is however crucial that these advantages for consumers are not to the detriment of workers involved in the service offered. Similarly, flexibility at work is not tout-court a negative aspect, if independence is a genuine choice rather than an imposition by the employer, and provided a certain floor of rights is guaranteed. As we have seen, through litigation and action by major political stakeholders, new solutions are on their way and will hopefully bring fair and decent working conditions to people involved in the gig economy.


[1] The Economist, "Workers on Tap", 30 December 2014.

[2] Leslie Hook, "Year in a word: Gig economy" (The Financial Times, 29 December 2015).

[3] Sarah O’Connor, "When Your Boss is an Algorithm" (The Financial Times, 8 September 2016).

[4] Business, Energy and Industrial Strategy Committee, Meeting (10 October 2017).

[5] Cecilia Saixue Watt, "‘There’s no future for taxis': New York yellow cab drivers drowning in debt" (The Guardian, 20 October 2017). See also BBC, "Uber cars outnumber yellow taxis in New York City", 19 March 2015.

[6] McKinsey Global Institute "Independent Work: Choice, Necessity, and the Gig Economy" (October 2016) p. 7-8.

[7] Matthew Taylor and others, "Good Work: The Taylor Review of Modern Working Practices" (July 2017), p. 42.

[8] Transport For London, "Notice 13/17: Licensing decision on Uber London Limited" (22 September 2017).

[9] Sadiq Khan, "Londoners’ safety must come first" (The Guardian, 22 September 2017).

[10] Gwyn Topham, "Uber Launches appeal against loss of London licence" (The Guardian, 13 October 2017).

[11] Katrin Bennhold, "London’s Uber Ban Raises Questions on Race and Immigration" (The New York Times, 2 October 2017).

[12] House of Commons, Work and Pensions Committee, "Self-employment and the gig economy" (1 May 2017) para 13.

[13] As far as the fist point is concerned, the Deliveroo representative held that, practically speaking, that is a clause that they would not enforce, However the Report points out that “[…] to an average worker with little or no understanding of employment law, the intended deterrent effect is clear.” See House of Commons, Work and Pensions Committee, "Self-employment and the gig economy" (1 May 2017) para17 and fn 15.

[14] Business, Energy and Industrial Strategy Committee, Meeting (10 October 2017).

[15] Sarah O’Connor and Aliya Ram, “Uber loses appeal in UK employment case” (The Financial Times, 10 November 2017).

[16] Federica Cravero, "Torino, sei rider fanno causa a Foodora: Eravamo dipendenti, licenziati illegalmente" (La Repubblica, 18 October 2017).

[17] Gene Johnson, "Federal Judge clears way for Seattle Lyft, Uber drivers to unionize" (The Seattle Times, 25 August 2017). See also Jeremy B White, "Judge dismisses lawsuit seeking to block law allowing Uber and Lyft drivers to form unions" (The Independent, 2 August 2017).

[18] David Streitfeld, "Uber Drivers Win Preliminary Class-Action Status in Labor Case" (The New York Times, 12 July 2017).

[19] EU Commission press release, "Moving forward on the European Pillar of Social Rights: Commission continues work on fair and predictable employment contracts", 25 September 2017.

[20] EU Commission Fact Sheet, "Commission continues work on fair and predictable employment contracts – Questions and Answers", 25 September 2017.

[21] "EU seeks more protection for Uber-style jobs", (Reuters, 24 September 2017).

 

Comments are closed