App-based workers and the Employment Rights Bill — challenges, prospects and future reform

Durham law grad Joseph Birdsall analyses the new bill and what it means for UK platform-based workers

Platform work is the matching of demand and supply of paid work through an online platform using an algorithm. Well-known platforms include Uber, Deliveroo, Airbnb and Fiverr. The new Employment Rights Bill promises to “ban exploitative practices and enhance employment rights”, but to what extent will it aid platform workers, one of the most vulnerable labour groups in the UK?

Landmark decisions on the employment status of platform workers on Uber BV and others v Aslam and others (Uber) and Independent Workers Union of Great Britain v Central Arbitration Committee and another (Deliveroo) have shown the precarious position that couriers, riders and other platform workers occupy regarding working rights. The current Labour government is proactive on extending fuller protections to the labour force, including through the aforementioned Employment Rights Bill, alongside talks of banishing the intermediate ‘worker’ category set out in S.230(3)(b) ERA 1996, to extend comprehensive rights to the entire workforce. In light of these developments and the EU Platform Work Directive, recently adopted by the EU parliament, this article will discuss the current position of platform workers in the UK and how this may change in the future.

The Employment Rights Bill

As of 2024, the current body of UK labour law does not contain specific regulations to govern the working rights or employment classification of platform workers. The current system of employment classification in the UK recognises three categories of worker: employees, limb (b) workers and the self-employed, denoted in Section 230 of the Employment Rights Act (ERA) 1996.

Those classified as employees are entitled to the full range of employment rights, including statutory sick pay, protection against unfair dismissal, the right to request flexible working and statutory redundancy pay. Limb (b) workers are deprived of these rights, although entitled to a more basic set of rights, including National Minimum Wage (NMW) and working time protection, collective bargaining rights and protection from unlawful discrimination. At the time of writing, employee status has not been claimed in any of the court cases on platform workers. The classification debates discussed in this article concern the coverage of limb (b) rights for platform workers.

Importantly for platform workers, the Employment Rights Bill will:

• Ban zero-hour contracts
• Make parental leave, sick pay, and protection from unfair dismissal day one rights for all workers (subject to probationary periods)
• Establish a Fair Work Agency

The above objectives will force platforms to reconsider the allocation of work, as well as extending rights formerly reserved for employees to all workers. Deputy PM Angela Rayner has claimed that The Fair Work Agency will have ‘real teeth’, with the power to prosecute and fine companies found to be in breach of employment laws. This may serve as a deterrent for companies abusing the fine line between self-employment and limb (b) worker status, including many platforms, as will be discussed.

However, whilst the rights gained through the Bill will protect those platform workers who already have the status of limb (b) workers, it will not aid those who fail to meet the criteria to begin with, leaving significant gaps in the system.

A blocker to platform working rights — A rigid interpretation of personal service

S.230(3) ERA 1996 refers directly to the requirement of personal service in statute relating to limb (b) workers: ‘the individual undertakes to do or perform personally any work or services’. Currently, this section can prohibit limb (b) classification for platform workers, as their contracts often contain ‘substitution clauses’: contractual terms allowing contractors to provide work on their behalf.

In Deliveroo, the court’s interpretation of this section was that such clauses should be assessed by the extent to which they are fettered, determined by the degree of discretion held over their usage by workers, holding that the updated Deliveroo Rider contracts were “virtually unfettered”. However, whilst the court rightly confirmed the undeniably broad right of substitution conferred to drivers, the issue of finding personal performance to be a steadfast requirement of a limb (b) worker employment relationship in platform work is problematic.

The earlier findings of the Central Arbitration Committee (CAC) (IWGB v CAC and Roofoods Ltd/ta Deliveroo [2018] IRLR 911 at [98]), referenced throughout all three Deliveroo decisions, noted this gap, stating that in practice, there was “no need for a rider to engage a substitute”, and that “few, if that, riders use substitutes”. The CAC stated that, due to the flexibility of the relationship, as stressed by Deliveroo, riders enjoyed the right to log in to the app when they wished, as well as to reject and cancel work even when logged on, therefore riders had little practical use for a substitution clause.

This presents a fundamental flaw in the classification of employment status for platform work in the UK: the denial of working rights as a result of substitution clauses which Antonio Aloisi, Professor at IE Law School, argues are often ‘purposely introduced and hardly practicable’.

The reason for this flaw is clear: explicit reference to personal performance in the statutory wording of S.230 ERA 1996 undoubtedly ties even purposive courts to a strict standard when judging substitution clauses. For as long as an ‘unfettered’ substitution clause remains an insurmountable barrier to worker classification, UK courts will necessarily disregard other aspects of the employment relationship, which may strongly indicate, at minimum, limb (b) status.

As Matthew Taylor argued in his 2017 review, the UK legislature must reconsider the importance of personal service to the worker definition, to reflect the modern world of work. The absence of a requirement to perform all work personally should no longer be an automatic barrier to basic employment rights. The ‘solution’ should be one which shifts the primary focus in employment classification disputes to the extent of control held by platforms over their workers.

The EU solution? A presumption of employment status

The new EU Platform Work Directive aims to aid employment classification and protect platform workers. Earlier drafts of the directive, before its final, compromised position, certainly mandated a meaningful change in employment classification.

Central to the directive is the introduction of a presumption of employment status. Subject to satisfying indicators of control, platform workers will be presumed to be employed, shifting the burden to platforms to prove self-employment. Determining suitable control criteria has been devolved to member states, although a former draft referred explicitly to “supervising the performance of work or verifying the quality of the results of the work including by electronic means”. Implementing a presumption could therefore be said to (1) force courts to engage with platform specific means of control and (2) amend the unequal balance of power between platforms and workers, upholding the labour law principle of dubio pro operario (when difficulty is found in apply a norm, the worker must be favoured).

The decision to devolve legislation on the employment presumption (the most significant section for platform work classification) in the adopted Directive may leave employment rights in some member states vulnerable to lobbying from platform giants. However, talk of a presumption of employment status in the UK deserves discussion. Unfortunately, presumptions of employment status are notoriously difficult to implement:

• Example 1: The ABC Test, California: the most comprehensive example of an employment status presumption, codified by Dynamex. Criteria for rebuttal place a heavy burden on hirers, resulting in conflict with the platform sector. After the ‘Proposition 22’ referendum (controversial due to over $200mn in campaign donations from platforms, including Uber), app-based workers are now exempted.

• Example 2: Belgian Deliveroo Case: criteria for establishing the presumption of employment are broadly similar to the criteria for rebutting it. Christina Hießl argues that that ‘however broadly conceived, [a presumption] is effectively meaningless when rebutted by a comparatively conservative notion of employee’.

To implement an effective presumption of employment affecting the labour force as a whole is undoubtedly difficult. It forces states to weigh up the balance of increasing inclusion and access to rights, whilst maintaining a market which is commercially viable. A presumption of employment solely for the platform sector, as outlined in the Directive, has yet to be used effectively. Adoption of the Directive by member states will provide 27 unique case studies which the UK can use while considering its own approach, although I advocate for less invasive revisions to employment classification:

‘Predominantly personal service’ — Reshaping the UK’s interpretation of personal service

I agree with Mark Freedland and Nicola Countouris’ ‘Personal Work Profile’, which asserts that the purpose of labour law is to protect the rights of the person, and that accordingly, the requirement of personal service should remain a consideration for courts. However, the definition should be made more inclusive to reflect the cynical use of substitution clauses by platforms, analysed instead on the basis of the proportion of the work performed personally, rather than on how restricted or ‘fettered’ the right to substitute work is, as has formed the norm in UK labour law.

Alan Bogg, professor in law at Bristol University, suggested two responses to personal service interpretation post-Deliveroo. First, that the requirement be removed wholly. Second, encouraging more purposive interpretation of the statutory wording of the section. He argues that this would foster an approach in which courts interpret the words ‘do any work personally’ to question whether the worker was expected to do some work personally. Both conflict with the ‘Personal Work Profile’, enabling platform workers to subcontract, potentially adopting a role more entrepreneurial than personal, one deserving of different employment rights.

I advocate for alteration of S.230(3)(b), to the definition of ‘predominantly personal service’. Such a definition would restrict platform subcontracting and reshape debate about substitution clauses from a question of how restricted clauses are, to how they are actually used and intended to be used by the parties. Through this alteration, rigid personal service may no longer block consideration of more striking elements of platform working relationships, relationships in which workers can be tracked, rated, restricted, sanctioned, and fired without just cause.

Joseph Birdsall is a law graduate from Durham University. He is interested in employment, property, and corporate law, and is seeking a career at a commercial law firm.

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