Given everything else going in the UK, employers could be forgiven for missing a quiet hive of activity in the UK's Supreme Court. The Court has been busy hearing key cases with potentially wide-reaching implications for employers. Below, we look at two of those currently under consideration:
Uber BV & Ors v Aslam & Ors
Summary
A two-day hearing on the worker status of Uber drivers got underway in the Supreme Court on 21 July 2020. Uber are seeking to convince the Supreme Court to overturn the Court of Appeal ("CA")'s earlier decision that Uber drivers are "limb (b)" workers and are therefore entitled to certain statutory rights, including to be paid the national minimum wage and to take paid holiday.
Uber maintains that it provides a platform which connects self-employed drivers with customers. Uber's underlying premise to date has been that drivers enter into individual contracts with customers and provide driving services to those customers.
Whilst a number of other businesses with similar models have faced similar claims (e.g. Pimlico Plumbers, Addison Lee, Hermes, CitySprint, Deliveroo), this is arguably the most high-profile of the gig economy cases. Companies and gig workers alike will be watching with interest given the potential legal and financial implications for both sides.
How did we get here?
A number of drivers brought claims against Uber in 2016 seeking payment of the national minimum wage and holiday pay, and alleging detrimental treatment for whistleblowing. In order to proceed with these claims, the drivers had to show they were "limb (b)" workers or employees, as opposed to self-employed contractors (as Uber asserted).
What did the Court of Appeal say – and will the Supreme Court take the same approach?
The CA, by a majority, held that Uber drivers are workers, not self-employed contractors. Two of the judges found that Uber exerted a high degree of control over drivers, which they held was sufficient to qualify them as workers. They were also sympathetic to the position advanced by the drivers that being logged into the Uber app and ready to work was enough to constitute working.
The drivers asserted that Uber contracts with the passengers to provide driving services and the drivers perform the services. Whereas, Uber argued that it acted only as an intermediary, providing booking and payment services - it is the drivers who contract with the passengers and therefore provide a driving service as independent contractors to each of their passengers. It was noted that contractual documentation reflected Uber's position, but the majority of the CA held that this did not reflect the practical reality of the relationship.
In his dissenting judgment, Lord Justice Underhill found no inconsistency between the contractual terms and the reality of the situation – he equated the Uber-driver relationship to that of a standard minicab model (in which drivers are currently considered to be self-employed). Underhill LJ said that Uber's position was neither unrealistic nor artificial, and emphasised that giving gig economy workers greater protection required statutory intervention.
At the Supreme Court hearing, Uber's focus appeared to be on the applicable contractual terms between the parties, rather than primarily on issues of control. Whilst this may be an indication that Uber intend to change their terms in light of the Court's decision, it remains to be seen whether the Supreme Court will focus solely on the contractual terms in their judgement, or whether they will take a broader approach to give the judgment greater applicability across the gig economy. The stakes for Uber are potentially significant, with around 1,000 claims stayed pending the Supreme Court's decision, as are the possible ramifications for other businesses engaging "gig" workers as self-employed contractors, who may in some cases have to re-think their entire business models.
Asda Stores Ltd v Brierley & Ors
Summary
The latest hearing in the long-running equal pay claim brought by Asda shop floor workers got underway on 13 July 2020 in the Supreme Court. Asda, which this year reportedly overtook Sainsbury's to become the UK's second largest supermarket, has some 600-plus stores (of varying sizes) with around 130,000 hourly-paid employees employed on retail terms. It also has 25 distribution centres where approx. 12,000 hourly-paid employees are employed on distribution terms.
Asda is facing claims from thousands of its (mostly female) retail workers claiming that they can compare themselves to (mostly male) distribution depot staff. The claimants argue that their jobs involve work of equal value to the depot employees, but the terms of employment for depot employees (including hourly wage and bonuses) are more favourable. If the claimants are successful in their claim, the costs to Asda will be significant.
This case is not only a crucial one for Asda; there are a number of other prominent retailers who are facing similar claims, including Tesco, Morrisons, Next and Sainsbury's. The value of the Tesco claim alone is estimated at some £4billion. And the consequences of this case are unlikely to stop here. Equal pay claims have traditionally been the domain of public sector employers and employees; the Asda case shows that the private sector is a new front for these types of claim, with pay structures in the retail sector particularly vulnerable to challenge.
How did we get here? And where exactly is here?
The Supreme Court is considering the question of comparability, which forms the first stage of an equal pay claim, so this litigation still has some way to go. Equal pay legislation implies a "sex equality clause" into all employment contracts, which gives an employee the benefit of more favourable terms which apply to a person of the opposite sex in the same employment doing equal work (unless the difference can be explained by reference to a non-discriminatory material factor). Equal work may mean (i) like work; (ii) work rated as equivalent; or (iii) work of equal value. Claimants may be awarded back pay and/or damages where successful.
For equal pay purposes, an employee can only compare themselves to another employee who is engaged at a different site within a business if "common terms" apply to the two establishments. Asda had lost on this point at the ET stage – the ET held that retail employees could compare themselves to depot employees. The EAT and later the CA reached a similar conclusion to the ET, albeit on slightly different reasoning. It will be interesting to see whether the Supreme Court follows suit.
What did the Court of Appeal say – and will the Supreme Court take the same approach?
Asda's position before the Supreme Court remained that retail and distribution are two different industry sectors and that they pay staff the market rates for these sectors. It challenged the North Hypothetical as applied by the CA, and asserted that the relevant terms and working conditions depended on the type of establishment at which people worked. It drew attention to the distinction between the retail and distribution workplaces, arguing that they are different types of establishment operating in different geographical locations, in different industries and with different pay-setting processes.
The Supreme Court's decision in this case will give us further guidance on comparability and the question of "same employment", particularly as regards the points flagged above. This will inevitably affect the structure and approach of other potential claimants.
In practical terms:
The Supreme Court's decision is expected towards the end of the year and employers should watch this space.
The decisions on both Uber and Asda will be reported in future editions of Frontline.