Reflexivity

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loopholes in the Labour Act and the failure by government to address them encourage the growth of economically dependent workers.

83 Reduction of the Burden on Courts

This is quite similar to the point discussed above. The opponents of a new category may argue that it is rather better for the courts to give wide meaning to the gamut of employees instead of creating a new category. However, applying this part has not been easy for the courts. The Uber drivers‘ saga is a perfect example. Worst still, even when the court finally holds that the workers were eventually employees as against independent contractors, this does not seem to put a stop to the controversy.

Apart from the Uber drivers saga, another classic example perfectly encapsulating this issue occurred in the case of Vizcaino v.Microsoft²⁰³where the Court declared the claimants who were

―permatemps‖ as employees and granted them full employee benefits and back pay as a result.

Unfortunately, this ruling has not created a true change in Microsoft‘s policy of hiring temporary workers. Instead of labeling these workers as employees, the simply terminate their contracts and send them away.²⁰⁴ These employers are incomparably richer that their workers and are super ready to buy their way out of the courts. This kind of regulatory outrage reveals the need for a third category that would identify the protections afforded to workers labour under intermediate arrangement.²⁰⁵ In this connection, a business law professor, Stemler, commenting on the Uber drivers case, has suggested that instead of labouring to find these workers as employees, a new classification should be created that falls between the clear cut employees and traditional independent contractors. These new classification would enable regulators to think differently on how to fill regulatory gaps.²⁰⁶

Where the creation of this new category is achieved, the court will not find it burdensome to easily identify the category to which a worker belongs. Expressing the height of confusion the

203290F.3d1043 (2002)

204 O, Lobel ‗The Gig Economy & The Future of Employment and Labour Law‘ University of San Diego School of Legal Studies Research Paper No. 16-223, (2016) p. 10 available at http://ssrn.com/abstract=2848456 accessed on 28/01/

2018.

205Ibid, p. II

206 A, Sternler, ‗Betwixt and Between: Regulating the Shared Economy‘ FORDHAM Urban Journal, vol. 43, (2016).

P.61.

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current situation poses to Judges. The judge in the case of Cotter v. Lyft Inc.²⁰⁷ stated that the case was like being handed a square peg and asked to choose between two round holes. A legislative intervention becomes imperative to enable the courts to easily administer justice to those classes of workers.²⁰⁸

Flexibility and Relative Advantage over other Options

From an individual perspective, dependent self -employment may represent a better solution than being unemployed or in irregular employment. Particularly in creative occupations, perceived job satisfaction can occur despite a precarious status and/or low or unstable income.²⁰⁹ Recognizing economically dependent workers arguably will promote some level of work flexibility and opportunities for the worker.²¹⁰

Discouragement of Post-Employment Restrictive Covenants

Recognizing the inherently mobile realities of economically dependent workers could allow us to better interpret the duties of loyalty and post-employment restrictive covenants that employers regularly demand. Employers in nearly every industry require their employees to sign non-competitive and non-disclosure agreements and pre-innovation assignment clauses. From a human capital perspective, it would make sense to increase protections over the dependent workers mobility, ownership over skills and knowledge, all to a higher level than that of employees, who enjoy more job security in return for some constraints over future competition with their employer.²¹¹

207 Case No. 3:13-cv-04065.

208 M A, Cherry & A, Aloiso, Op.cit p. 36

209E,Werner,Op.citpg 10.

210 H T, Wandera,Op.cit p.188.

211 O, Lobel,Op.cit p. 13

85 Promotion of Social Compact and Organised Labour

Since the wake of the 20^th century, a social compact developed between employers and employees which protected employees from dangerous working conditions provided a minimum level of economic security, and defined norms of fairness. The social compact has served workers, employers and society well. This social compact is jeopardized by the classification of employees into independent contractor status.²¹² There are many workers scattered in the labour market who do not know which category they belong to. This situation can be tackled by the creation of this new category of workers as it will provide an opportunity to connect workers to each other and organize in ways previously unavailable.²¹³

Enhancement of Economic Efficiency

In an ideal labour market with no frictions and perfect information, the cost of many of the benefits that employers are legally required to provide to employees would be ultimately borne by the employees themselves in lower wages. With the recognition and formalisation of economically dependent workers, outsourcing acquires a positive outlook unlike the current situation where it is negatively interpreted. The gist is that the regulation of economically dependent workers will legitimize outsourcing by companies under labour law which will in effect boost the economic efficiency of the employer firms.²¹⁴

Capturing the full importance of a clear classification of workers, the Taylor Review of Modern practices reports put it as

212 S, Harris & AB, Knieger ‗A Proposal for Modernizing Labor Laws for Twenty First Century Work: The Independent Worker‘ The Hamilton Project Discussion Paper 2015-w, December 2015 available at

http://www.hamilonproject.org/assets/files/modernising-labour-laws-for-twenty-first-century-work-knieger-harris.pdf accessed on 25/01/ 2018

213 O, Lobel, Op.cit,p. 14.

214 S, Harris & A B, Knieger, Op.cit, P. 26.

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Determining whether you are an employee, a worker (i.e Economically Dependent Worker)²¹⁵ or genuinely self-employed, requires the ability to understand complex legislation, which is spread over many Acts, and be aware of a mountain of case law. For individuals, not knowing your employment status means not knowing what employment rights you deserve. For business, the situation can lead to uncertainty about their responsibilities and what can be demanded from workers. The situation does not need to be complicated.²¹⁶

Apart from the United Kingdom, another country in support of a three tier approach is Canada. In the Canadian case of Mc kee v. Reid’s Heritage Homes Ltd,²¹⁷ the court laid down the foundation on how cases bordering on economically dependent workers should be dealt with. It maintained that the first step is to decide whether the claimant is an employee or a contractor. Where it is found that the claimant is not an employee, the next step is to determine whether he is a dependent contractor or an independent contractor. The court further held that unlike an independent contractor, a dependent contractor is entitled to notice before termination.

Finally, commenting on the proposal for the creation of a new group, a learned writer stated that ‗it is the clearest and simplest solution to the misclassification disputes and debates‘ He stated further that the proposal has a practical advantage in terms of implementation and has great potential for incrementally strengthening the rights of many employee-like workers without entirely rejecting the common law independent contractor distinction.²¹⁸

215Emphasis mine.

216M, Taylor etalop.cit p. 34.

217 (2009)ONCA 916.

218 M P, Jost ‗Independent Contractors, Employees and Entrepreneurialism under the National Labour Relations Act: A Worker by Worker Approach‘ Washington and Lee Law Review vol.68, issue 1, (2011) p 337.

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