28 Aug The RISE OF THE GIG ECONOMY AND THE URGENT CALL FOR ITS LEGISLATIVE BLESSING IN GHANA.
Introduction
Ghana’s labour laws are generally known to cover employment contracts and contracts for services with employers, employees, and independent contractors as the key actors. However, in a fast-changing world and with the tremendous strides in technology, a new area, not directly within the scope of the above-mentioned traditional classifications, has emerged known as the “Gig Economy”.
It appears that lawmakers have not paid attention to the gig economy and the delicate intricacies regarding its classification for the purposes of identifying the rights and benefits that should avail workers of this particular growing economy. The United Kingdom (UK) is one of the countries that has risen to the challenge and made significant changes under its legislation and court decisions.
This blog post seeks to assess the growth of the Gig Economy in the global market and to evaluate the possibility of incorporating this new strand of employment into the Labour Act, 2003 (Act 651) by drawing lessons from the pacesetters in the global market.
The Gig Economy In Perspective
The UK Government has defined the gig economy to involve the exchange of labour for money between individuals or companies via digital platforms that actively facilitate matching between providers and customers, on a short-term and payment-by-task basis.[1] The gig economy uses digital platforms to connect freelancers with customers to provide short-term services or asset-sharing.[2]
A gig can be any job, which includes a wide range of positions – everything from food delivery or an online taxi business to programming code for freelance writing.
This new system is evolving for economic reasons among other things.[3] Employers who cannot afford to recruit full-time workers to complete essential tasks, often employ the services of temporary or part-time workers to manage peak periods or specific projects. For persons who want to earn an additional income, or for students who want to earn income while studying, the gig economy offers autonomy and flexibility in achieving those objectives.
Where Do Gig Workers Fall: Employees Or Independent Workers?
Globally, the well-known categories of workers include employees or independent contractors; permanent workers or temporary workers; and casual workers. The distinction between employees and independent workers can be made by determining which contract establishes the working relationship. In Stevenson, Jordan Harrison Ltd v MacDonald & Evans,[1] a locus classicus case, the Court distinguished between a “contract of service” and a “contract for services” provided to the firm. The Court applied the traditional ‘control test’ in determining whether the employer has the right to control the way a person does work. The Court further stated that a person is considered an employee under a “contract of service” when the work is integrated into that of the business and considered an integral part of the business, whereas an independent contractor for services is merely an accessory to the business, and thus, not an employee.
The legal status of gig workers varies widely depending on the country and industry. Some countries have introduced specific legislation to regulate gig work, while others rely on existing labour laws that may not be well-suited to this type of work.
Since its inception, the classification of gig workers has been the holy grail of labour market regulation. While these gig platforms have made it easier for businesses to find and hire gig workers, they have also created new challenges around worker classification and labour rights; particularly, as to whether to classify a gig worker as an employee or an independent contractor.
The UK has made great strides in resolving this conundrum.
The UK Employment Rights Act[2] (the “UK Act”) consolidates enactments relating to employment rights. The UK Act has defined the key actors of the UK labour market, i.e., “employee” and “worker”. It defines an “employee” as an individual who has entered into works under a contract of employment, and if the employment has ceased, worked under a contract of employment.[3] A “worker” is also defined by the UK Act as an individual who has entered into or works under, (or where the employment has ceased, worked under) a contract of employment or any other contract, whether express or implied, to do work or provide services personally for another party who is not a client or customer of the person’s own business.[4]
The Employment Rights (Miscellaneous Amendment) Regulations, 2019 amended the UK Act- the term “employee” has now been replaced with the word “worker” and “contract of employment” has been substituted with “other worker’s contract”.
In this regard, a “worker” has moved beyond the restrictive scope of an employee. The amendment has essentially granted individuals engaged as workers, but falling outside the precise definitions of either employee under an employment contract or independent contractors, yet engaged in some form of contractual obligation to provide services for another entity, the ability to benefit from the rights and protections afforded by the law.
Case Studies
A. Uber BV & Ors v Aslam & Ors [2021] UKSC 5UKSC 2019/0029 (the “Aslam case”)
Uber BV & Ors v Aslam & Ors[1] is a landmark case in UK labour law on employment rights.[2] In 2016, the Plaintiffs who were drivers of Uber BV sued the company, arguing that they were “workers” under the law and that the company had denied them the rights and wages associated with that status. In finding for the Plaintiffs, the Supreme Court relied on Underhill QC’s judgment in Byrne Bros (Formwork) Ltd v Baird[3] to hold that workers who do not qualify as employees under the law but are in subordinate and dependent positions to their employers, similar to employees should enjoy the same protections afforded employees whose positions are substantially and economically the same.
In effect, the Supreme Court determined that even though the drivers were not employees, considering how Uber strongly controlled the nature of their work, they were entitled to the same rights and protections as employees.
B. Allonby v Accrington and Rossendale [2004] ECR I-873
The European Court of Justice (“ECJ”) in an earlier decision, examined the appropriate interpretation of the word “worker”. In this case, the ECJ held thus:
“…there must be considered as a worker a person who, for a certain period of time, performs services for and under the direction of another person in return for which he receives remuneration.”[4]
C. The Taylor Review Of Modern Working Practices
The UK Government commissioned Mathew Taylor to develop proposals to improve the lives of people living in the UK. One of his areas of focus can be found in Chapter 5 of his review, where he clarifies the distinction between “worker” status and “self-employment”.[5]
In the report, he explained that the status of “worker” offers a relative safety net for those who are neither employees nor self-employed, ensuring that a group of more casual workers are protected by a set of baseline rights, such as the national minimum wage.[6] In effect, he recommended that the UK Government introduce a new name to refer to the category of people who are not employees and refer to them as “dependent contractors”.[7]
Even though the UK Government did not agree to introduce the new name to refer to the category of people who are not employees and refer to them as “dependent contractors”, they acknowledged that the gig workers were not independent contractors and as such the Supreme Court’s decision in the Aslam case is still good law.[8]
Should Ghana amend the Labour Act, 2003 (Act 651) to make room for the Gig Economy?
The Labour Act, 2003 (Act 651), like the UK Act, employs the word “worker(s)” repetitively. Unlike the UK Act, Act 651 defines a worker as “a person employed under a contract of employment whether on a continuous, part-time, temporary or casual basis”.[1] It is thus safe to conclude that a worker in Ghana refers to an employee and not an independent contractor, unlike in the UK where the same word is used to refer to anyone who works or enters into a contract of employment or any other contract for the purposes of work.
Today, the courts are more likely to construe a gig worker in Ghana as an independent worker because of the qualification placed in the definition of a worker in Ghana, i.e., one under a contract of employment. Most gig workers do not sign any contract of employment. It becomes difficult then to identify and properly assign rights, benefits and obligations to the gig worker. It is therefore important to make provisions for a classification to cover gig workers and clearly define the scope, rights and benefits that should be ascribed to a gig worker. This would protect the economic rights of such workers and also reduce the high rate of labour disputes.
Secondly, the gig economy has within a short period become a significant part of the Ghanaian economy, especially in terms of employment for the youth within the major capitals in the countries.[2] From the sociological point of view, the law is required to grow with society whilst functioning as a tool of social engineering.[3] In effect, the knowledge of the law must influence the social life of people such as safeguarding the labour rights of these gig workers who are not expressly catered for either under Act 651 or the labour regulations[4].
The amendment of our labour law to include provisions that expressly caters for the gig economy will be a step in the right direction. The Western world has started amending its laws to reflect the dynamics of their contemporary economies. An example is the UK experience which provides valuable guidance and insight for Ghana to emulate and inculcate taking into account the peculiar circumstances of our labour regime. Taylor’s recommendation to the UK Government to introduce a new name to refer to the category of people who are not employees and refer to them as “dependent contractors” for instance, is a useful suggestion.
Introducing a new category of workers would greatly assist to access statutory rights and privileges as a worker and create a conducive and congenial environment where Ghana will keep up with the fast-growing world.
Conclusion
There are lessons to be learned and decisions to be made as a country concerning the introduction of a new category of workers for the reasons discussed above. Ghana cannot afford to miss this opportunity to amend the Labour Act to provide for a new category of workers, which will expressly spell out the rights and benefits of the emerging gig workforce. A national conversation on this very important labour issue will be a useful starting point.
This publication may provide a summary of legal issues but is not intended to give specific legal advice. If you require legal advice, please speak to a qualified lawyer, which may include a qualified member of our legal team at B&P ASSOCIATES (info@bpaghana.com).
AUTHORS:
Ernest Kofi Boateng (Summer Legal Intern 2023)
Alexander Bonsu (IT Manager)
[1] Department for Business, Energy & Industrial Strategy, “The Characteristics of Those in the Gig Economy”, Final Report, dated February 2018 p. 4
[2] World Economic Forum, “What is the gig economy and what’s the deal for gig workers?” (26/05/2021) What is the gig economy and what’s the deal for gig workers? | World Economic Forum (weforum.org) assessed 03/08/2023.
[3] ibid.
[4] [1952] 1 TLR 101
[5] Employment Rights Act, 1996, c. 18
[6] The Employment Rights Act, 1996, Section 230. (UK)
[7] Ibid.
[8] [2021] UKSC 5
[9] Harvard Law Review, “Uber BV v Aslam” (08/03/2021) Recent Case: Uber BV v. Aslam – Harvard Law Review assessed 27/07/23.
[10] [2002] ICR 667 at para 17(4)
[11] ibid.
[12] Good Work: Taylor Review of Morden Working Practices (July 2017).
[13] ibid @ p. 33.
[14] ibid @ p. 35.
[15] HM Government “Good Work; A Response to the Taylor Review of Modern Working Practices” dated February 2018, pp 31 & 32.
[16] Labour Act, 2003 (Act 651), s. 175.
[17] Such capitals include Accra, Kumasi, Takoradi, and Sunyani
[18] Pound R., Social Control Through Law, Yale University Press, New Haven. Connecticut, 1942
[19] Labour Regulations, 2007 (LI 1833)