Employment Lessons from Around the World - Impact of the Uber Decision for Global Expansion and Distributed Working

Posted in : Webinar Recordings on 20 April 2021
Sherisa Rajah
Elements Global Services
Issues covered:

The world of work is changing and employment laws are failing to keep up. The global pandemic and subsequent lockdown have shown all of us that we can work from home - and that home could be anywhere. FlexWork platforms are expanding at an incredible rate. Our employees could be anywhere, so long as they have the correct tech and decent Wi-fi. But:

  • How do you enforce standards of work on employees that you never physically meet?
  • How do those employees enforce those rights in a jurisdiction in which they have never set foot?
  • How can trade unions bargain locally unless they take national cases (such as Uber v Aslam in the UK) to court?
  • And how do those national cases help, if work is now international and fragmented?
  • What are the tax liabilities of employing someone who no longer attends work in the UK or Ireland?
  • What can employers in Ireland and the UK learn from employment laws and best practice from around the world?
  • Will employers really need to 'employ' anyone going forward, or just gigify their employment practices, taking on freelancers to carry out specific projects?
  • Globalisation is, well, global and it's virtual for many services. So, why haven't you taken advantage of it?

Legal Island has joined forces with Sherisa Rajah, International Employment Lawyer and Director of Global Employment Law and Compliance at Elements GS, to consider global employment issues, from the gig economy to remote working to covid-19 and the return to some workplaces. We'll be running a series of webinars that will consider and answer questions like those above. We'll consider the employment laws of countries outside the UK and Ireland and we'll look to learn from their best practices, so that we might inform our customers and policy makers alike.

The Recording

Transcript

Scott: Good morning, everybody. How are you? I'm Scott Alexander, and I'm from Legal Island. Welcome to a new series of broadcasts. We're going to be looking at employment lessons from around the world with Elements Global Services. And you can see before you there is Sherisa Rajah. Now, Sherisa, you're an international lawyer. You work for Elements Global Services. You do lots of talks on international employment law, so tell us before we get started a little bit about yourself and what Elements GS do.

Sherisa: I apologise for that. Hi, everyone. My name is Sherisa. Thank you for the introduction. Yeah, my experience and background . . . I am an employment lawyer. I've practiced at a number of firms over the last 16, 17 years and I joined Elements last year. I head up employment law and compliance for the company. As far as what Elements does, we act as employer of record in . . . at present, 163 countries. We also have a platform called Expandopedia where we provide employment law information regarding the countries in which we have a presence, essentially offering cradle-to-grave legal information on the life cycle, onboarding, off-boarding changes in the employment relationship.

Scott: That is excellent. That's a splendid thing. I'm glad you said it because I wouldn't be able to remember it. So before we start and get in, we're going to be looking at a series of different things. Today, we're looking at Uber gigification of the economy, and so on. We'll look at other elements every quarter as we come through, so hopefully, the audience can come up with some ideas but, really, it's around . . . just about employment laws, right, trends on how different countries are dealing with different issues, and today is going to be about gigification. So I don't know . . . are there any other ideas that you might have to come forward or we're just looking for the audience to come up with tips and do the hard work for us.

Sherisa: I mean, my preference for them to do the hard work for us, but I'm open to coming up with some solutions. I think the spirit in mind is certainly to be robust and practical in how we approach the number of changes coming through. We ultimately seem to be having a poll by public dissent around whether you are either for or against the gig economy. That seems to be where we are right now. And then the atypical forms spring from there around, other forms of employment outside of traditional permanent employment. So, yeah, happy to come up with solutions.

Scott: Okay, thank you very much. So Rolanda is in the background. She's going to show us our next slide which is a little ad from Legal Island. It's a workplace wellbeing mental health and resilience course that we're doing online on the 20th of May, and if you would like to attend that at the special price I've got down here, if you're from the Republic of Ireland, €125, if you're from Northern Ireland or anywhere else in the UK, it's €125. Then if you type yes, you'll see there's a little question box there. If you put yes into the question box, then we'll get back to you. We'll send you a link anyway, but if you're particularly interested, we'll get Allison from our events and marketing team to have a look at that.

Poll Questions

 

Background and Findings in the Uber Case

Sherisa: So this essentially started out as a test case, right, so what that meant is that there were a number of cases coming before the tribunal on the exact same cause of action and what this case was intended to be was a test case where depending on the outcome of the other cases would then equally benefit from the outcome. So this case goes to the employment tribunal and Uber was unsuccessful at the employment tribunal already, right, so the employment tribunal found in favor of the employee.

What then happened was Uber appealed and they go to the Employment Appeal Tribunal. They were unsuccessful there, then on the issue of law, they go to the Supreme Court of Appeal, right, and the issue is largely whether on the contractual relationship between Uber and the drivers, whether these drivers, particularly the claimant in the test case, could be seen to fall in the category of a worker?

Now, that's an important definition because worker is a distinct concept from employee under the Employment Rights Act in the UK. Now, when you are a worker, you get protection in relation to deduction from wages, you get paid time off, and you get protection in relation to termination, right? Now, what Uber argued is that the contractual relationship between the drivers and its holding company, Uber BV, was very much focused on the rider enjoying a large . . . in fact, 100% autonomy and agency, okay? And they say we don't tell you to turn your app on and stay logged in from 8:00 a.m. to 5:00 p.m. We don't tell you how many rides to accept in a day. We don't tell you, you know, all the things that you would perceive to be congruent with a subordinate employment relationship. They say the drivers enjoy autonomy and agency because they are independent contractors. They are not subject to Uber's supervision and control.

Now, the Supreme Court of Appeal looked at the contractual relationship. They looked at the stack of documents starting with the rider terms and going into the service levels that Uber sets for the drivers, and there were some key findings that I wrote down that I thought were very interesting. So they said that the remuneration, which is the service fee, is set by Uber. Now, in reading the judgment as I understand it Uber says, "We licensed the app to the driver." Okay? When a rider calls for a trip and the driver accepts that trip, part of that fee goes as a license fee back to Uber and the other part goes to the driver who's undertaking the service.

The court looks at whether that could be remuneration and whether that then is set by Uber. The contractual terms . . . what we understand when we set up an independent contractor relationship of service levels. The court looks at that and says, "Yeah, but those are the terms for service that are dictated by Uber." It's a strong word. Uber dictates the way you do your work. That's what the court says, okay? They say that when you log on to the app as a driver now, you might have autonomy to accept and to reject requests of riders, but if your acceptance rate falls below a certain percentage then there's a penalty, you know? The other way is that the rating system that riders can rate your trip, etc., that also is controlled by Uber.

And the final point they found was that there's a very restricted conversation of communication between the driver and the rider. Now, they say that if you were a pure independent contractor, that limited conversation certainly restricts your economic position because the only way you can earn more money or improve your remuneration as it were was if you work longer hours and took more trips. Yeah.

Scott: Yeah, I have a comment because you're chatting about Uber doing it through an app, and most of our listeners won't have an app set up for their employees. But if you go through most of those, you know, we've got two-thirds of the audience here have agency workers that's in the poll, and around about half of them have people who work outside the jurisdiction of the UK and Ireland. Most of them would set the rates. Most of them would have some kind of rating system or performance review. Most of them would . . . if you were on a bank system for instance and you kept refusing shifts, would take you off the list. Most of them would have limited interactions with customers because effectively you're told where to go and there'd be elements of control when you're doing your job.

Most of our listeners are caught, I would say, by the Uber case insofar as all those elements of control which are coming through from Uber albeit directly through an app that the Supreme Court didn't accept. Most of our listeners would have things like that for their casual workers or their agency workers or their bank shifts or whatever it happens to be.

Sherisa: Yeah. If you unpack these criteria, right, and, you know, when a court makes a comment, we say the court comment's obiter so it's not binding. It's an important comment that they make that could be persuasive in future outcomes of other cases, etc. And the court says that they've adopted a purposive approach, right? They say we've considered all the relevant facts and not simply the contractual paperwork between the parties.

Now, we've always known that employment law is substance over form, right? That's why when we talk about fixed-term contracts being rolled over, we talk about expectations to continue the employment. That's why when we talk about, you know, the old days, the contractors and the deeming provisions of employment, we said that they are deeming presumptions that would infer employment, right?

If you think about what the Supreme Court of Appeal has done in this case, they've taken the deeming presumptions of employment, applied them very generously in favour of the drivers such that the presumptions of employment are so easy to get caught into now because supervision and control, which is the ultimate threshold, can very easily be met by confusing the service levels in the contract . . . the service agreement between the parties as being one of subordination and control in the employment relationship.

Scott: Yeah, yeah. So with whatever you want to do . . . I mean, if I were to bring a plumber in to fix my bathroom, I might want to supervise them to some extent, but I wouldn't stand over them because they're the professional. I'll let them get on with it, whereas what's happening with Uber and quite a number of cases as well across the jurisdictions is that the business wants to maintain the control. They want quality control. They want to make sure they've got quality services being provided and in doing that, they're currently being caught by employment laws.

Fitting the Gig Economy Model into Current Employment Legislation

I know that you're going to come to the . . . we're going to have a discussion about how maybe employment laws are falling behind the reality of gigification and the fact that people can work across jurisdictions but, at the moment, when people or the unions are taking claims in this case on behalf of the workers then effectively most employers have been caught by the fact that they're trying to provide a service and rather than have an employee-employer relationship, they're trying to do based on an independent contractor basis. And it's not really cutting the ice at the minute when it comes to the courts. And certainly not in the Uber case.

Sherisa: Yeah, I think that when we look at atypical employment and we look at contracting and certainly when we look at the app-based economy and when we talk about the app-based economy, you're talking about contracting where you're providing services and you're meeting a demand via an app in real-time, okay? Now, this is no different, this outcome, to what happened in Spain with Glovo where the court there found . . . the high court found there that the app was the means for which . . . and there were about other findings, but the key criterion there was that the app formed the basis on which . . . well, said differently, it constituted the tools of the trade for which the . . . there they called them the riders . . . the riders were able to provide services and, therefore, they were found to be employees.

You know, again, if you go back to the old days, we used to say that if you give someone the tools of the trade, so your plumber, right, if you call a guy in, he comes in routinely on a Friday at 8:00 a.m. and you say okay, "Here's your wrench, here's your hammer . . . " A plumber wouldn't use a hammer but, you know, let's say this one . . .

Scott: You're not a qualified trade, are you?

Sherisa: No, very far from it, but, okay, your wrench and your screwdriver, you know, now . . . and he goes away. So he comes in, you give him the tools, you tell him what to do and then he goes away, and you say "Well, you know, I just call him once a week for, like, two hours to help me out." The court's going to say in that scenario, "You have set the service levels. You have set his hours of work, and you have told him what to do and you've provided him with the tools of the trade for which he has to perform these services." Surely on that broad interpretation then we're saying that there is a subordinate relationship of employment.

It sounds bizarre when you bring it closer to home. You know, if we take the words out, "The gig economy", if we take out "Uber" and we take out "Rider," "Driver," "App," and we just talk in real terms, what we're saying is supervision and control has become a very low threshold test now, and that's why it's now become a question of is there space for an atypical gig economy or are you saying we can only go back to permanent employment, fixed-term employment, potentially casual workers and pure independent contractors?

You must be an incorporated entity with your own employees and your own commercial indemnity terms, blah, blah, blah before parties can contract. And if we're saying that, I mean, I'd be interested to hear from the audience because if we're saying that, to what extent are we going to play on the global landscape in relation to innovation, disruption, attract talent? What is your employee value proposition if the only space you have to work is if you can devote 9:00 a.m. to 5:00 p.m. for the next 20 years or 30 years to retirement and then you go off and, you know, walk on the gardens in your spare time, I don't know. But, you know, surely that's not the only way one can earn a living. It just seems so close-minded to the amount of disruption we've seen particularly in the last year with the lockdown where people have found alternative ways to earn an income and not just rely on a furloughed economy.

Scott: Yeah, I suppose it may depend, I suppose, on the type of work. We were discussing a UK survey from the Office of National Statistics which showed that two-thirds of people during the pandemic did not work from home, and that's because they were either furloughed and weren't working or they had physical jobs where they had to be in the workplace. So we're still talking about a minority of people but that minority of people, you know, I do most of my work south of the border in Ireland but I'm based in the north. It makes little difference to me the way that works. You could have people . . . You're originally from South Africa, you're now living in England. You could be based anywhere and yet you could be doing work for . . . you're working for a global company. You could be working for any one of the 133 jurisdictions in which you apply, but you're based in England or you could have been based in South Africa, based wherever you want. And we could contract those types of services.

So I think maybe the difficulty with some of the cases that have been coming through, like Deliveroo and Uber and the rest and UPS is that they're physical services and, therefore, they look more like jobs. There might be that if you contract out . . . if you're looking to gigify a bit of work, you know, I work for Legal Island. I'm an employee of Legal Island. I have a contract, but it's just as possible that Legal Island could contract somebody in to run webinars or to do some of the other services and they just bring them in on an ad hoc basis and let them get on with it without control and if that's not a physical service . . . If it's done like this, which is online, I don't know that necessarily that individual in particular if they were allowed to do work elsewhere could claim they had become an employee of Legal Island. There's an element of time and place and control, but I think you're right. The control test seems to be a very low bar nowadays to establish you've at least in the UK got worker status and maybe in Ireland employee status.

Sherisa: Yeah, I mean just to go back to the comment about the number of people who are not able to work remotely, that is in and of itself a huge business motivation or a national motivation for the gig economy because it talks the fact that the majority of your people are negotiating on national minimum wage or somewhere between that and mid-level employment terms, right, still doing physical labour in circumstances where, you as an employer, as a business, are being forced to consider more and more the opportunity and options for automation, streamlining, optimisation, etc.

Organisational Benefits of the Gig Economy Model

Now, in the gig workplace if we can call it that . . . It sounds like a juxtaposition, but in the disrupted workplace, right, if you've got a diverse level of skills and you've got a lot of people doing manual labour, is this not the opportunity to upskill, reskill, you know, as you look to automate, to disrupt, to do things differently, more streamlined, to take that two-thirds of your workplace, reskill them, upskill them, so you significantly alter their career path into becoming professional office-based workers and not manual, you know, forklift drivers, etc.? Because that is the attraction of the gig economy, that employees who want to be in this new workplace are committing to a career of lifelong learning. No job will be the same in 2 months, 10 months, 2 years, 5 years from now. And in saying that, you commit to a career of constantly upskilling, reskilling yourself because you might do the same things differently, you might do different things the same, who knows?

And it's interesting to me that in sophisticated economies, rather than embracing the innovation and the entrepreneurship of our employees, we are trying to quash it and say, "No, we are the Commonwealth. We own supervision and control." You know, 9:00 a.m. to 5:00 p.m., one-hour lunch break for you. How do we innovate? How do we stay relevant? What is your EDP to attract that entrepreneurial-minded 22-year-old fresh out of university? If you want this job 9:00 a.m. to 5: p.m. with a non-compete, a clawback and the person must retire at age 63, you know, it flies in the face . . .

Scott: Are you saying, Sherisa . . . If you just joined us by the way, you're listening to Sherisa Rajah from Elements Global Services who's chatting with us here about the gig economy and the gigification of it. If I'm picking you up right, you have employment laws which were made for physical jobs and are saying there's a master-employee relationship going back to the old case law that we used to have in there. The legislation has really reflected that. Now, in Ireland there's a new code of practice on the right to disconnect but, of course, you balance that up because the reality is that I could engage or bring in work and it could be somebody who's based in South Africa, New Zealand, anywhere else, and those people particularly the millennials and the younger employees that are coming . . .

Yeah, they want to work from home, like . . . well, not like me anymore. They want to work from home. They want that flexibility. They want to be able to, you know, have CPD going on throughout the rest of their life. They've got all that kind of stuff and that there's a bargain going on which will . . . I don't know if it's going to overtake employment law but where relationships are being structured in such a way that it might be that an employee is working for three different employers and getting paid for different projects and they're happy with that because they're working within their own time with a degree of autonomy that wouldn't be . . . If you don't provide it, you don't get the employees. Is that what you're saying?

Sherisa: Yeah. Well, I'm not saying you wouldn't get employees. I think you always will get employees, but it's what kind of skill do you want to attract to come into your workplace? Because that skill is going to help you . . . You know, we talk about organisational redesign, and we talk about, you know, previously organisational redesign was talking about what your employees want and building it up and using that to go out into the marketplace. Now, we're talking about what the market is doing? How does that shape what our clients want, and based on that, in order to be viable and sustainable and successful, we need to hire the employees who can give our clients where there's compatibility in mindset and thinking, you know. And if we hire and maintain a traditional workplace of attitudes, all we're doing is . . . we're going to plateau.

You know, we really need to look around at the amount of disruption and innovation out there. I'm an employment lawyer. I worked in law firms my entire life. My goal was to be a partner and stay there, you know, retire one day, but if I look at the kind of work I'm doing now, I look at the billable hour as being completely disrupted by the amount of innovation in employment law, legal information that is available out there, and that's just from a lawyer's perspective.

Imagine the construction industry, the telecom industry, the automotive manufacturing. It is hugely disrupted with automation, with innovation. And in those circumstances, if you're looking at your manual labour workplace that is costing you in terms of unions bargaining with them, setting wages, running the risk of industrial action every five years or three years when you bargain with them, you're going to want to do things differently. And if you're going to want to do things differently and you're going to want to maybe gig or outsource some of your non-core functions, if you're going to want to bring in casual workers fixed term, how do we push legislation to be compatible with what we are doing in our workplaces?

And then the last one and I'll stop talking is this kind of workplace, this disrupted workplace, it makes a world of difference for minorities. So a diverse workplace where people who all think differently come to the same table and contribute to shaping your EDP, shaping your business value proposition to your clients, but also for families, for people with young kids.

I mean, I don't want to commute an hour and a half to my job because . . . and if I do, then I'm going to be a little bit, you know, uncomfortable to then work again in the evening. But if you gave me flexibility, I'm going to give you everything I have because I can raise my kids, I can be a mom, I can be a wife, I can keep my house, and I can keep my career going, and I'm a happy chappie. Grateful employees give back a 100% more because it's quid pro quo. Who wants anyone to work 9:00 to 5:00 anymore? It sounds archaic.

Options for Employers Who Wish to Hire Employees in other EU Countries

Scott: Yeah, 9:00 to 5:00, you’ve missed half the day in my opinion. And we have a couple of questions that have come in here, Sherisa.

What are the options for a remote company that has an entity in Ireland to hire employees in another European country? They would be full-time employees who work exclusively for the Irish company.

Sherisa: That is such a good question. So that's ultimately what I answer on a day-to-day basis. Firstly, your issue is whether they have the right to work, and if you need sponsorship, that's going to certainly motivate how you employ and whether you need entity set up, which is why Elements which would act as an employer of record would be hugely beneficial to you because you would employ through the entity and we would be the statutory employer. That's one option. Your other option is to set up your own entity. Your third option would be to understand if you can employ remotely and be compliant with the laws. Now, for that, you're looking at corporation tax. You're looking at income tax. You're looking at occupational health and safety, and then you're looking at employment laws.

My sense is that it would not be possible depending on which country you want to go into to employ without having entity presence or having some payroll solution to offer you entity presence. It really depends on the country. By example, you've got France, Poland, Russia, hugely regulated entities compliance whereas you could potentially engage in the UK in a very different way. Commonwealth countries largely offer a little bit more latitude than the more regulated countries, so you really want to check what your entity setup compliance laws are then you need to look at tax laws, permanent establishment risk, occupational health and safety laws, and then the last one would be injury on duty and understand what your obligations are there. So once you've looked at that feasibility study, you can then make an assessment of whether you go with an employer of record, do your own entity setup, or ultimately have a work-from-anywhere attitude where you can employ. The last, last point is you'd want to make sure you don't trigger any kind of A1 or posted worker notification issues. That's my answer.

Scott: Well, that's a lengthy answer. It shows the complications, I suppose, Sherisa of actually employing people as opposed to sending out pieces of work. Now, obviously, if you do it there, you know, we don't have the control. You can't set all the standards but, you know, you could just as easily . . . You know, and your game, and the long game, most of the bigger firms have got rid of their office staff. They, you know, they sent out all the stuff to India. And, you know, they send it back, it's encrypted, all that works out. There's no employment relationship there. It's just a contract for services, really. And, you know, they may move them around. They're not even worried about TUPE claims that you would have in Ireland or in Europe because it's over in India, so they might move it to another firm, or they might send it to America. So there's different routes to get the work done as opposed to employment, and I suppose that's what this is about.

The Gig Economy In Other Countries

Could I move you on to, I suppose, the element, what's happening elsewhere? You mentioned those things in Canada. There's stuff happening in other countries, so maybe just tell us what other jurisdictions are looking at and see if there's any trends or ideas that the people here in Ireland and the UK can pick up.

Sherisa: So the first one is around Spain. Now, Spain, we know last . . . was it last or the year before last? The Glovo judgment came out with a global . . . they have riders and they delivered to the consumer in real-time on an app much like Uber, much like Deliveroo, etc., but it's not limited to food. Now, with Glovo . . . pursuant to Glovo what happened was that there's been a huge demand for protection for gig workers, etc. So the labour minister has essentially said that workers are going to be given employee status while unions would gain the right to access algorithms used by companies such as Uber to manage their workplace. The legislation is supposed to . . . it's intended to reflect the Glovo ruling and says that such workers would gain formal contracts and benefits. Now, that's what happened in March 2021. That was the last I heard of it.

I do know that the European Union is putting together a directive to protect atypical forms of employment and then national economies would have a period of time to put legislation in line and to be compatible with that directive that's coming out.

I have been following a lot of what Australia has been doing. They had a number of government inquiries, and there's also been a report that was published with 20 recommendations for better protection for on-demand gig workers, and this was based . . . coming out of the inquiry into the Victorian on-demand workforce. And there's been a number of conversations around how to protect the gig economy and the gig workers.

Now, that for me is a very useful conversation because when I was reading up on what was happening in Spain, as I understand it, the app management and leadership was saying, you know, "We should be working collaboratively on this, you know, we should have the conversation together. This is not a competition, you know, because if I win, you might still lose. We ultimately want to find a compromise, a middle ground where we can work together to protect people and benefit the economy and continue to provide the service to the consumer." So I found that to be interesting.

Independent / Dependent Contractors

Scott: In Canada, I'm quite interested in this concept of a dependent contractor because most of our listeners here would understand the concept of an independent contractor. That's the plumber that comes in to fix the bathroom and then they go off to somebody else’s bathroom and fix it or whatever else they happen to fit. But a dependent contractor is where they have a degree of autonomy, it seems, but they're largely dependent on one place to do the work in. Is that it? Or is there more to it than that? Because you can see where people would come up with a kind of halfway house that would make a bit of sense a bit, like, the worker concept in the UK so it's halfway between a contractor and an employee. So what's this dependent contractor all about because that might be an interesting one for . . .

Sherisa: This is the category of workers. And what a dependent contractor is it's somewhere between an employee and an independent contractor, so we have the same definitions, but a dependent contractor is essentially one that has an economic dependence on the client and also has vulnerability, bargaining power reduced as well as a level of exclusivity, so exclusive hours, right, and a sense of permanence in the client's workplace in return for performing those services.

Now, a dependent contractor gets, again, certain benefits like regulation of working time, protection against termination, unfair unlawful termination. That theme is also picked up in Italy though not taken as far as Canada because in Italy, the theme that we see or the classification you have is a para-subordinate worker. Now a para-subordinate worker is someone whose performance is organised and directed by the employer as a subordinate much like employees, right? But if we just circle back to Canada, Canada gave dependent contractors last year the right to strike at the workplace, right? So that means they have the right to strike, they have protection in relation to organisation of working time, and they have certain termination protections. Therefore, dependent contractors are slowly getting more and more rights and, again, it would be very interesting to follow what comes out of that conversation.

Circling back to Italy, we haven't seen much movement out of Italy, but I think Italy has been focused on COVID. You know, we've seen the ban around objective terminations, and we've seen the equivalent of furlough being handed down to prevent that and to secure and protect continuity of employment in this time. So it'd be interesting to see once the economy resumes what becomes of para-subordinate relationships, particularly once the EU directive comes out this year, and we're expecting it in the course of this year.

The interesting one would be Spain to follow because Spain is leading in its own national legislation ahead of the EU directive in relation to gig workers' rights, particularly because that legislation is going to be focused on giving effect to the Glovo judgement that came out of the high court, vis-a-vis riders, gig workers and their rights as employees which is different to what Uber said. Uber gave worker status. Spain is giving employee status.

Scott: Okay. Well, a few questions have come in that we're looking at here. "I don't think it's so binary." Said one of people, "between job security and creativity. Uber is clearly much more than that and giving employment contract a higher status than ordinary contracts. More purposive interpretation . . . " Let me have a look here. "More purposive interpretation of employment law right is coming through here." I think what they're saying is that, yeah, it's not not binary, it's a bit more complex that I suppose there's almost, like, a continuum, you know, where you've got people who are clearly independent, they're working for themselves, they're not doing anything. You've got people who are clearly employees, they're directed. They turn up every day. They're on PRSI in the south of whatever and in between that you're trying to figure out where they go, whether they're moving much forward towards employees or much further towards independence, so it's not quite one or the other and things like dependent contractor and the EU directive on gig economy . . . It kind of it . . . it's reflecting that the things are changing, that there are these grey areas that feel, like . . .

Sherisa: Yeah, I mean remember . . . So Uber has riders, so people who drive for themselves, but you also have rider partners, people who can own a number of cars and then those riders can ride for them. I think Uber has become the name drop in the gig economy and has taken a lot of heat because of the amount of economic opportunities it has created.

If we just circle back to South Africa. In South Africa, Uber created somewhere between 20,000 dare I say jobs for people who were previously unemployed earning barely national minimum wage. And the context is in South Africa, national minimum wage is almost £1, right? I forget the exact rate now. I think it's about 20 rand, South African rand an hour, right? These are people who were working, earning something, like, 3,500 rand a month, so national . . . that's national minimum wage.

They move out of national minimum wage working night shift, you know, working low-level jobs, manual labour to driving and quadrupling that income earning somewhere between 20,000 to 28,000 rand a month. And in a country like South Africa with massive socio-economic disparities in the earning power of people, that makes a marked difference on unemployment, particularly in the informal sector and particularly with COVID and being as hard hit as it is. So I think that there's certainly an argument for the gig economy for companies like Uber, particularly in emerging market economies such as South Africa.

Employer of Record - Meaning

Scott: Okay.

Could you quickly run through how the employer of record works and the costs?

Sherisa: Can you email me after? I'll tell you what the principles are. An employer of record acts as a statutory employer in countries where you do not have an entity presence and you want to expand globally and employ talent in that country. So we will employ, we will register the contract of employment at the ministry of labour, and we will administer the contract, all life cycle changes, all CBA issues, collective bargaining issues. And in the event . . . If at the end, if the two of you want to fight, maybe you don't like each other anymore, and we have to off-board the person, we will handle that off-boarding. So let's say you've seen a redundancy. We will implement the consultations, we will terminate at the end, etc. An EOR is essentially the compliant opportunity for companies to expand globally where you need to employ and you need entity set up in that country in order to employ.

Professional Employer Organisation – Implications of Continuity of Employment

Scott: Okay. Thank you very much.

Well, the final question here which is,

"We have a PEO set up. A lot of people in the PEO wish to eventually move to Ireland and become an employee. Would continuous service become relevant?"

Sherisa: Oh, absolutely. It's such a topical conversation. I could talk about that. Can we set up, like, a follow-up call because I think that, one, is you . . . remember, you're looking at TUPE, right, because you said, is just not a case of the same business in different hands? Is the economic entity that is being transferred now the labour? This is a question for you, I don't know. So, you know, that's something you need to look at. Alternatively, if it's just a service agreement, you're going to terminate and start them on new contracts. If you're starting them on new contracts, would it not be prejudicial to them if they've got long service? If you do not recognise seniority in the contract in . . . under Ireland employment law, you very well can recognise seniority and recognise accrued annually paid time off in your new contract. You ultimately want to keep the employee whole. You want to make sure that they are not prejudiced by this. So those are the conversations you would need to have in effecting this termination of your PEO provider and taking your employees into your own entity.

Scott: Okay. Thank you very much. If you've had other questions, we'll send you just up . . . the contact details for Sherisa. If you have any further questions, we will pass them on to her, but thank you very much everybody for listening today. I think we're going to be looking at working from home around the world the next time. I'm interested to see that Austria is looking to introduce legislation on the standards of equipment and such. Like, that employers have to provide employees who are working from home which goes a bit further than you'll find in Ireland and the UK. And we'll be looking at issues like that, I think, at the next one.

But if anyone has any other ideas, you want to get in touch with me, you can see my email there, scott@legal-island.com. If you have any employment questions, international employment questions, there's Elements GS. You can go to Sherisa there. Her email is there as well. We will follow that up. We'll also follow up with details on the webinar offer or the event offer on the wellbeing as well.

So that's about it. Our next webinars coming up that we're going to have are on, I hope. Here we go. In Northern Ireland, you can listen to Seamus McGranaghan and me on the 11th . . . or sorry Employment Law at 11 on the 7th of May. That's where you can send in any questions to do with employment law in Northern Ireland, and we will deal with them in that webinar. The next one for the south is the code of practice on the right to disconnect that we have on the 30th of May, and that will be with Caroline McEnery I believe from HR Suite. And we also have an Audience with RDJ which is coming up on the 21st of May. So thank you very much, everybody. Thanks, Sherisa. We'll see you all again soon. Thanks, everybody. Bye-bye.

     

This article is correct at 20/04/2021
Disclaimer:

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Sherisa Rajah
Elements Global Services

The main content of this article was provided by Sherisa Rajah. Email sherisar@elementsgs.com

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