Learning from One Another? Judicial Comparativism as a Facet of Transnational Employment Regulation in the Gig Economy – Margarita Amaxopoulou

‘Workplace laws have not kept pace with technological change’. This was the assertion of the Australian Select Committee on the Future of Work and Workers in its recent report at [4.119], recommending that legislative reform is necessary to afford gig workers employment law protections. Beyond Australia’s borders, ‘AB5’, an Act protecting gig workers as employees, passed the Senate of California this spring and signed into law on 18 September 2019. Regulators in the UK are also committed to bringing forward legislation aligning employment status definitions with modern working practices (p 44). The gig economy, however, does not only attract the attention of legislatures; it also constitutes the locus of fierce litigation around the world concerning the application and enforcement of EUpubliccompetition and employment law.

This article discusses the transnational character of gig work regulation by reference to litigation against Uber concerning the (mis-)classification of employment status in three jurisdictions. It does so to make the case for a much-needed judicial ‘comparativism’ in this particular context. First, I present a comparative analysis of the legal tests applied in cases with similar factual background in Australia, the United Kingdom and the State of California which led to different legal resolutions. Second, in light of the global character of this legal problem, I argue that judicial comparativism engaging with the reasoning of relevant foreign case law is an important facet of transnational employment regulation in the gig economy. 

Employment Status Tests across Borders: the Case of Uber

This article focuses on employment status (mis-)classification, a very small, yet increasingly high-profile sub-field of gig economy regulation, in which cases increasingly emerge in the advent of Uber’s global expansion. Such cases arise when a gig worker is contractually characterised as an ‘independent contractor’, allowing the company to avoid its employment law obligations. Classification can take place either directly (i.e. explicitly in the contract) or indirectly (i.e. through clauses that connote independence). This section focuses on three cases brought by Uber drivers against the tech giant, which were heard in jurisdictions with comparable legal foundations (i.e. common law principles). 

Starting with the USA, Californian courts have traditionally followed the common law ‘multifactorial’ classification analysis to determine whether there is an employment relationship between the parties of the case.  Under this test, multiple criteria are considered and weighed in their totality. In 2015, the Labor Commissioner of the State of California held that an Uber driver was an ‘employee’. In the test applied, ‘control’ was an important proxy for dependence and, thus, employee status. It was to be measured by such elements as work being an ‘integral part of the employer’s business’ i.e. Uber’s operations (p 8), as well as taking place under the company’s directions. Crucially, Uber does not have to control every detail, since the company is ‘involved in every aspectof the operation’ (p 9). In April 2018, the Californian Supreme Court introduced a new  test in its Dynamex decision. This new, so-called ‘ABC’ test, introduces a strong presumption in favour of the ‘employee’ status, and makes it quite likely that many gig workers will be classified as employees. While the ‘ABC’ test has not yet been applied to a gig economy case, the dynamic development of case law in this context is of great interest. 

Moving to the United Kingdom, British employment law includes three different categories of work classification: employee, worker and independent contractor. Employees enjoy full employment law protection, while workers enjoy only a minimum floor of rights. In the UK, the courts similarly take into consideration numerous factors to determine employment status. The UK Employment Tribunal (‘ET’) held in Aslam that despite contractual terms classifying Uber drivers as independent contractors, they were properly understood to be ‘workers’. The ET found that Uber’s contractual terms ‘do not correspond with the practical reality’ at [90]. The Tribunal, relying on a series of past decisions, emphasised that what matters is the ‘true agreement’ reflected in the reality of the parties’ relationship and not the terms that the companies’ lawyers construct so as to avoid liability (at [77]). The ET noted that Uber exercises a great deal of control over the drivers, holding interviews with driver applicants and defining the type of vehicles that can be used (see [92]). Uber’s drivers, strictly bound by the company’s terms, have no power to negotiate with their passengers (see [90]) or choose their preferred route over the company’s default one (see [54]). Moreover, Uber punishes drivers who do not have a high trip acceptance rate and deactivates those who do not score above 4.4 in their rating system (see [55], [92]). Regarding Uber’s argument that there is no work-wage bargain between the company and the drivers, the court conceded at [85] that, indeed, there is no contract between the parties in the offlineworld. Yet, the ET held that, when the application is switched on and drivers are ready to accept rides in their territory, a ‘worker’ contract emerges (see [86]). Such a contract is characterised by a de facto sphere of the company’s salient control. The UK Court of Appeal has rejected Uber’s appeal against this judgement. 

Finally, Australian employment law (Fair Work Act 2009 (Cth) ss 13, 357; Independent Contractors Act 2006 (Cth) ss 4, 5) recognises two categories of work classification: employee and independent contractor. The Australian Fair Work Commission has dealt with several claims by drivers against Uber, finding in all cases that the applicants are ‘independent contractors’. This article will focus on the first of those cases, Kaseris v Rasier Pacific V.O.F (Kaseris), as it sufficiently demonstrates the substance of the Commission’s legal reasoning. 

Notwithstanding the different resolution reached in Kaseris in contrast to Dynamex andAslam, the relevant legal test for employment status in Australia is also the ‘multifactorial’ approach [46]; there is no single conclusive criterion to determine employment status. The various criteria are weighed against one another and what matters is the ‘totality of the relationship’ between the parties (see [53(1)]). Crucial considerations include the nature of the work performed, the control over this performance, the terms of the contract, as well as various other indicia which point towards one direction or the other in the employee/independent contractor dichotomy (see [53]). In applying this test, the Commission held in Kaseris that the driver enjoys independence, as he was the one who decides whether to drive, when and where to do so (see [54]). Most crucially, of central importance was the absence of a work-wage bargain (see [51]), which is an essential element of an employment contract’s existence. It was decided that, essentially, there is no contract between the parties, as Uber ‘does not owe any legal obligation’ to the driver except for providing the driver with the application; the driver is, equally, not obliged to provide their services. 

Employment Regulation as a Transnational Legal Problem in the Gig Economy

The article will now argue that employment regulation must be seen as a transnational legal problem in the gig economy. Due to this transnational character, judicial comparativism is integral to adjudicating upon cases like Dynamex, Aslam and Kaseris. This is not to say that judicial decisions across borders should, by all means, agree in their legal findings on employment status. It means, however, that substantive engagement with the legal reasoning of foreign case law is highly important. 

To start with the transnational character of the discussed problem, the employment law challenges arising in the gig economy should not be categorically and ultimately defined as ‘domestic’ or ‘international’. These are, instead, intertwined in a ‘globe-spanning web of regulatory regimes, actors, norms and processes’ (Zumbansen, p.2). While gig economy companies penetrate various economies and legal regimes, sooner or later they have to deal with local regulators and judges, as well as with workers and their unions. Referring to the specific example of Uber, the company’s worldwide operation has created complex relationships with each country’s state and non-state actors.  Different countries may host the operation of gig economy companies but it is their transnational activity which distinctly generates a variety of legal problems. 

Viewed through this lens, the seemingly distinct cases of employment status litigation against Uber become a transnational legal process which transcends national boundaries: they all involve a single actor, operating across borders and aiming to influence local regulators and appeal to the public.  In this context, ‘boundaries between distinctly perceived legal, political, jurisdictionally and systemically perceived systems begin to blur’ (Zumbansen, p.5). This realisation calls for a different approach to legal theory and methodology. The form and modalities of legal regulation need to be reconsidered with regard to forces that transcend jurisdictional boundaries. In this context, and with regard to the particular case of gig economy litigation, judicial comparativism is a core facet of realising this shift in legal method and embracing appropriate solutions towards regulating complex transnational phenomena.

Judicial Comparativism as a Core Facet of Transnational Legal Method

Judicial comparatives involves the substantive consideration of foreign legislation, practice and case law, ‘by way of general information or as at least partial support for the reasoning behind the domestic decision’ (Lienen, p 167). Practically, this means that a domestic court, commission or other judicial body should carefully engage with solutions proposed and adopted by foreign bodies adjudicating on a substantially similar case that arose in the latter’s country. For the national court, this practice could lead to ‘self-reflection or betterment through analogy, distinction, and contrast’ (Hirschl, p 41). 

This does not mean that we should see ‘the foreign decision as necessarily being in itself a factor in favour of deciding the issue in the same way’ (Reed, p 265). Nor does it mean that a national judge should be cherry-picking foreign decisions so as to back their own position on the matter. According to Lienen, judicial comparativism has been used, inter alia, to ‘compare purely for informative purposes’, ‘to clarify weaknesses in past domestic decisions, or to use the doctrine of other common law jurisdictions’ to develop domestic law, as well as to ‘look for inspiration to approach complex legal or logical questions’ (Lienen, p 179). Meaningful judicial comparativism would, naturally, require a careful selection of the comparable cases and a substantive engagement with the foreign court’s legal reasoning. How do we distinguish, then, between substantive judicial engagement and the risk of conflating between different jurisdictions?

The short answer, to use the language of legal rules as practical reasons (see, e.g. Raz), is that comparativism shall not be seen as creating exclusionary reasons for domestic judges, i.e. second-order reasons that conclusively determine the outcome of judicial deliberation by pointing towards a particular direction. Instead, comparativism shall be seen as adding additional first-order reasons to domestic judicial reasoning, i.e. additional arguments that could tip the balance in favour of resolving the case in one or another way when weighed against other considerations. Such arguments may, indeed, merit less weight than e.g. the particular legal solution that has been given to identical problems within the confines of the domestic jurisdiction. If such a solution does not exist, however, comparative arguments may be accorded more significance. 

Contextual circumstances may, arguably, influence how much weight will be given to comparative legal resources. For instance, foreign case law is more likely to be transferable, when there are strong historical, linguistic and cultural ties between the jurisdictions of interest. The jurisdictions of Canada, Australia, the USA and the UK satisfy such a criterion. Another important consideration is the particular nature of the discussed legal issue. In our case, where judges adjudicate upon such homogenised, transnational legal problems as the employment status classification in the gig economy, judicial comparativism occupies a centrally important role. More specifically, it enables the national courts to consider legal reasonings and outcomes, also allowing them to harmonise global judicial responses to a transnational problem. Even if the harmonisation is not desirable, such an approach would, at least, provide their decisions with a more comprehensive and well-informed grounding by global judicial responses. 

A brief critical discussion of the Commission’s decision in Kaseris would meaningfully illuminate this argumentThis decision provides a prime example of a superficial dismissal of comparative analysis that would greatly inform the legal reasoning in the case at hand. Mr Kaseris submitted that the Commission should take into account the UK’s Aslam decision when deciding his employment status. The Commission, however, held that: 

‘Although the Uber operations in both the United Kingdom and Australia are similar, (…) the decision in Aslam is of no assistance to the Applicant’ (emphasis added).

The Deputy President emphasised the difference between the three-fold classification system of the UK and the employee/contractor dichotomy that applies in Australia. The fact that in the UK the applicants fell under the middle ‘worker’ category and not that of ‘employee’ was deemed sufficient to foreclose an examination of the legal reasoning in Aslam. This conclusion was reached as if the reasons yielding in favour of classifying an Uber driver as a ‘worker’ in UK law cannot be used to evaluate the indicia pointing to the ‘employee’ status in Australian law; as if a completely different foundation and underlying rationale was at play.

It is not the case, however, that the precise legal formulation of a category as ‘workers’ or ‘employees’ in different jurisdiction exhausts the crucial issues arising from the Uber cases. The above-mentioned Californian example, which shares the Australian employee/contractor dichotomy, reveals that the ‘multifactorial test’ can lead to the exact opposite conclusion from the one reached in Kaseris. Is this to be explained exclusively by reference to doctrinal differences in the two jurisdictions? While this possibility cannot be precluded, there is only one way to find out: a substantive engagement with the foreign judgement. This engagement could, perhaps, demonstrate that the different conclusion in the Californian judgement does not stem from an employment law doctrinal difference. The lack of complete convergence in different countries’ legislation should, thus, not preclude an evaluation of the points raised in a foreign decision on the same matter. Drawing on the legal reasoning of foreign judgements would allow the Commission to engage with the insight and information available to British and Californian judges, facilitating a deeper understanding of the intricacies of this ‘complex legal question’.

Margarita Amaxopoulou is a Visiting Lecturer and a PhD in Law candidate at King’s College, London, where she studies as an Anthony Guest Scholar. She specialises in transnational law and her research interests revolve around law, regulation and new technologies in the context of the future of work.