AND NOW, THE GRAND FINALE is here! The stage is all set for a grandstand finish! With hysteric excitement, the trip is coming to a sweet end. Apart from enjoying the drifting and smooth ride, I hope you will have learnt a lot and activated your curiousity in the direction of making sound laws that match the fast-paced dynamism brought about by globalization, Artificial intelligence and technology.
AN INNOVATIVE PERSPECTIVE
The emergence of the gig economy and its attendant zero-hours contracts have indeed, brought about novel legal reasoning and value considerations. It seems to this treatise that a new version or shade of Labour relations has been initiated by this emergence. Admittedly, the common law and extant statutes in England on employment and labour relations are tough and rugged enough to withstand storms brought about by globalization, it appears that the gig economy is more formidable. New legislations that focus strictly and specifically on the peculiarity of the gig economy might have to surface.
The dissenting judgment of His Lordship in the instant case brought to many raging issues to focus. Quoting his words and observations on the Autoclenz case is most apposite at this juncture:
“I have already explained why I do not think that Autoclenz can be treated as a tool to re-write any disadvantageous contractual provision that results from the disparity of bargaining power between (putative) employer and (putative) worker: in cases of the present kind the problem is not that the written terms mis-state the true relationship but that the relationship created by them is one that the law does not protect. Abuse of superior bargaining power by the imposition of unreasonable contractual terms is of course a classic area for legislative intervention, and not only in the employment field.”
The Autoclenz case largely deployed by the Court of Appeal is one that empowers Courts to look behind the veil of misleading terms and conditions and beam moonlight on the economic reality of the contractual relations between parties. On deeper scrutiny of the situation however, a frightening issue rears its head. This point was pungently made by Sir Patrick Elias in the following lines:
“There is no doubt that zero-hours contracts are a matter of very great concern. This is because they are often—although not always— cynically constructed agreements, framed by the employer in order to avoid their legal duties. I do not believe that the common law can successfully deal with them alone. Autoclenz allows a court to deal with the cases where the agreement is a sham, but the problems arise when it genuinely reflects the way in which the contract is performed, although the worker would choose that the contract were otherwise. The courts cannot simply ignore express terms or apply some general doctrine of unconscionability to invalidate a contract because of unequal bargaining power.”
The frightening issue is made clearer now. The existing laws have been innovative enough to curb the dangerous effects of paper tigers and manipulative and deceptive contract documents. But what happens where the apparently deceptive contract documents (which are actually real but only reflect a new type or version of possible commercial relations between parties) is genuine with respect to the economic reality? It is this portion of the dissenting judgment of His Lordship that this treatise is in full agreement with.
Commendably, the English law makers are not ensconced in parliamentary slovenliness. Moves are being made and conscious efforts have been deployed. The Taylor Review is the most important in view. In October 2016, the incumbent Prime Minister, Theresa May commissioned Matthew Taylor to conduct an independent review into modern working practices and labour relations generally while focusing on ways to keep up with the dynamisms of the labour sector.
In July, 2017, the Review of Modern Working Practices was published containing fifty-three (53) recommendations. Among the issues considered were implications of new forms of work, the rise of digital platforms and the impact of these novel working models on the rights, obligations and other crucial components of the labour relationship.1 The Review canvassed for the introduction of “dependent contractor” status in the legislations, showing a mid-point or hybrid of an independent contractor under a contract for service, and an employee under a contract of service. His Lordship also observed that the Business, Energy and Industrial Strategy (BEIS) and the Her Majesty’s Revenue and Customs (HMRC) have opened public and private consultations on a wide range of issues raised by the Review.
THE NIGERIAN PROPHECY
Once prophecy is heard, what comes to mind? Spiritualism – spoken words of things certain to happen or exist by a religious figure operating from a spiritual and supernatural plane. In the context of admissible facts and informed analysis, the law has virtually nothing to do with prophecies. Paradoxically, we have a whole lot to do with the Nigerian prophecy in this treatise. The prophecy here is an informed and clinical analysis of the applicability of the Nigerian legal regime to the instant UBER case.
The laws on Labour, Trade Relations and Dispute are quite many and have enjoyed enforcement and interpretation by our Courts. They may be categorized as General and Specific (Sector-specific). The General labour and Trade Relation laws are the Constitution of the Federal Republic of Nigeria, 1999 (as amended), Labour Act, Child’s Right Act, Employees’ Compensation Act, 2010, National Minimum Wage (Amendment) Act, 2011 and the Trade Disputes Act. The sector-specific ones include the Factories Act, the Nigerian National Petroleum Corporation Act, et cetera.
Notably, this brief introduction of the labour legal regime quickly exposes one of the critical determining issues in this treatise. Labour and Employment appears to be a sector of the Nigerian economy with a multiplicity of subsectors. The dearth of sub-sectorial or sector-specific laws within this sector quickly becomes evident. The recent spate of globalization and digital industrialization makes this issue even more pronounced.
The gig economy under which UBER falls is quite new and developing in Nigeria, at least in its legal aspects. Where a ‘worker’ or ‘employee’ is to be defined in the context of the instant case, resort is likely to be had to the Labour Act, the National Minimum Wage Act and few other relevant laws and subsidiary legislations. But before delving into the definitional issue, some preliminary matters must first be attended to.
Firstly, the suit will be instituted in the National Industrial Court of Nigeria, most likely its Lagos judicial division holden at Ikoyi (Lagos being the commercial nerve centre of UBER intrusion into Nigeria). The matter is typically a claim under an Employment relationship for entitlement to the National Minimum Wage and Holiday Pay as a worker. The claimants aver that UBER is their respective employer while they are severally employees/workers of UBER.
Secondly, a fundamental question must be answered immediately. UBER is not a registered or incorporated business entity in Nigeria or under Nigerian Law. In the presence of this, what is the legal capacity of UBER to be sued in the instant case? Section 60 of the Companies and Allied Matters Act empowers a foreign unincorporated company to sue and be sued in its registered name.3
Furthermore, in truth, the question of whether there is some contractual relationship between Nigerian UBER drivers and UBER Company is not in doubt. It is the legal status of this contractual relationship as it pertains to Labour Law that brings some fog into our sights. In defining what a ‘worker’ or an ‘employee’ is under Nigerian Law, recourse must be had to the Labour Act, Common Law and the Doctrines of Equity.
From a legal perspective, there are broadly two (2) categories of workers in Nigeria:
a. Workers employed to perform ‘manual labour or clerical work’; and
b. Workers employed to perform purely administrative, executive, technical or professional functions (‘Non-workers’)
The Labour Act prescribes minimum terms and conditions of employment but only for ‘workers’ – (a) above; terms and conditions of non-workers are to be regulated by their respective contracts of employment. It thus becomes more urgent to quickly give UBER drivers a legal catchment in order to be clear as to the applicable terms.
IS AN UBER DRIVER A ‘WORKER’?
Section 91 of the Labour Act defines a ‘worker’ as:
“…any person who has entered into or works under a contract with an employer, whether the contract is for manual labour or clerical work or is expressed or implied or oral or written, and whether it is a contract of service or a contract personally to execute any work or labour…”
The afore-cited provision gives a subtly blanket definition to who workers truly are. It thus presupposes that a worker can be either an employee or an independent contractor. This is apparent in that the Employees’ Compensation Act applies only to individuals or workers who are deemed ‘employees’ by the Labour Courts.
The above definition meanwhile fails to recognize workers in a non-standard work arrangement. It pathetically stands to indicate the poor Nigerian legislative atmosphere – the grey-hairs of the Labour Act enacted in 1971 are expected to grapple with the Ferrari-paced changes deposited in the Labour Sector by globalization and digital industrialization.
IS AN UBER DRIVER AN ‘EMPLOYEE’ OR ‘INDEPENDENT CONTRACTOR’?
Other than the Labour Act, no specific law, especially as it pertains to the novel gig economy, sets out the factors that would guide in detecting the contractual status of an individual or worker as either an employee or an independent contractor. Infact, the Labour Act fails to clearly define who an ‘employee’ is. At Common Law however, an ‘employee’ is defined as “a worker who has a contract of service”.4 This distinguishes an ‘employee’ from an ‘independent contractor’, the latter being under a Contract for Service and barred from enjoying employee benefits.
In a seeming quest to protect casual workers, the Employees’ Compensation Act (ECA)5 was enacted. It defines an ‘employee’ as:
“…a person employed by an employer under [an] oral or written contract of employment whether on a continuous, part-time, temporary, apprenticeship or casual basis…”
The ECA definition was deployed in SS Co. Ltd. v. Afropak (Nig.) Ltd6 where the Supreme Court prescribed the following criteria to provide guidance in making the ‘employee’ detection:
a. The mode of payment (remuneration);
b. Ownership of the equipment, tools or instruments used in providing the services
c. The ability to delegate duty
d. The hours of work
e. The place where the work is carried out; and
f. The provision of office accommodation and a secretary.
It must be noted also that the power of an employer to unilaterally change or alter the terms of the contract of employment depends on the magnitude of change involved. Meanwhile, the consent of each individual employee is required to be obtained to vary or overhaul the terms of an employment contract.7
The Afropak’s case8 further defines an independent contractor it the following words:
“Where the contract allows the contractor to work for people other than the employer, on the other hand, these are persons referred to as independent contractors or self-employed.”
Delving into the instant case (UBER), it appears to me, I imagine, that the likelihood of the Court finding as a fact that UBER drivers are employees of UBER and operate under a Contract of Service seems too remote or highly unlikely. The following reasoning suffices in support:
A. The UBER Terms which was codified to govern the relationship between UBER and unboarded or contracted drivers specifically witnesses an agreement that UBER drivers are ‘independent contractors’
B. The UBER Terms were unilaterally drafted by UBER and can be unilaterally altered or overhauled by UBER without the consent of UBER driver
C. UBER is a company whose business is bringing taxi or cab drivers in close business contact or connection with potential customers who become their passengers
D. UBER obtains commission for rendering the service of bringing the cab or taxi drivers in contact with their customers
E. UBER drivers are permitted to work for other taxi-cab companies and are not bound to work for only UBER 9
F. UBER drivers are not mandated to work for any particular or stipulated amount of hours.
Notably, a portion of the UBER Terms attempted to oust the jurisdiction of the Court to determine any case brought against it (UBER) as to whether it is the employer of UBER drivers under a contract of service. Certain provisions of the terms and conditions tactically oust the jurisdiction of the Court to determine any eventual dispute. See the following:
“UBER does not and does not intend to exercise any control over the driver -except as provided under the [Partner] Agreement and nothing in the [Partner] Agreement shall create an employment relationship between UBER and the Partner and/or the Driver or create either of them an agent of UBER. … Where, by implication of mandatory law or otherwise, the Driver and/or the Partner may be deemed an agent, employee or representative of UBER, the Partner undertakes and agrees to indemnify, defend and hold UBER harmless from and against any claims by any person or entity based on such implied employment or agency relationship.”
On the authority of A.I.D.C. v. Nigeria L.N.G. Limited,10 the law is firmly settled that parties cannot by contract oust the jurisdiction of the court. It is very likely that the excerpted part of the UBER Terms above will be nullified.
Moreover, in the UBER Terms, the contractual relationship between the parties was stated to be governed by the Dutch Law (the Netherlands). This contractual provision is not likely to hold water as the lex loci of the cause of action (the law of the geography where the cause of action arises) is crucial and determines the applicable laws and the Court with jurisdiction.
Analysing the extant Nigerian Labour laws vis-à-vis the English UBER Court of Appeal decision has been very adventurous and most revealing. This is mostly due to the non-correlation or incompatibility of the laws with the current global reality of the gig economy – Non-Standard Working Contracts. Applying the Labour Act and its cohorts to the UBER situation appears legally improper and unfit. It is common knowledge that the enactment of the Labour Act was not, in any way, in contemplation of the novel features of the gig economy run by UBER.
The UBER technology is indeed a phenomenal one that is capable of immensely benefiting the Nigerian economy and the entire populace, foreign and Nigerian. Without deviating too wildly from the context of this treatise, it is submitted that the enactment of sector-specific laws to govern the gig economy has become an urgency and emergency. Most likely, subsequent treatises by different concerned intellectuals would reveal the pacey proliferation of companies and SMEs in this Labour sector. A stitch in time saved nine in the past where evolution and global dynamism was relatively sluggish. Now, a stitch in time saves an entire race!
1. LABOUR ACT, CAP L1, LFN 2004
2. CHILD’S RIGHT ACT
3. EMPLOYEES’ COMPENSATION ACT, 2010
4. NATIONAL MINIMUM WAGE (AMENDMENT) ACT 2011
5. TRADE DISPUTES ACT
6. NIGERIAN NATIONAL PETROLEUM CORPORATION ACT
7. FACTORIES ACT
UNITED KINGDOM (ENGLAND)
1. EMPLOYMENT RIGHTS ACT, 1996
2. NATIONAL MINIMUM WAGE ACT, 1998
3. WORKING TIME REGULATIONS (WTR), 1998
4. PRIVATE HIRE VEHICLES (LONDON) ACT, 1998
5. PRIVATE HIRE VEHICLES (LONDON) (OPERATORS LICENCES) REGULATION, 2000 INCLUDING ITS AMENDMENT IN 2016
6. VAT NOTICE 700/25, 19th September, 2016
ROME I REGULATIONS, Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June, 2008
Olukolade O. Ehinmosan
Lead Partner/Editor-in-Chief, LAW AXIS 360°
1. (2004) EWCA Civ. 328; (2004) ICR 727
2. Good Work: The Taylor Review of Modern Working Practices, July 2017; https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/626772/good-work-taylor-review-modern-working-practices.pdf
3. The name with which it has been incorporated or registered in its home country
4. Ready Mixed Concrete (South-East) Ltd. v. Minister of Pensions and National Insurance (1968) 2 QB 497
5. Cap. W6, LFN, 2004
6. (2008) 18 NWLR 77 at 82
7. Afropak’s case (supra)
9. Afropak’s case (supra)
10. (2000) 4 NWLR (Pt. 653) 494 SC;