- A planned class-action lawsuit against Uber in South Africa will seeks to have drivers recognised as employees, and not simply independent contractors.
- This would afford drivers paid leave, overtime pay, and UIF membership.
- But another local e-service company, SweepSouth, predicts that a “third worker classification” – which offers both flexibility and benefits – will emerge as a result.
- This coincides with alternative legislative interventions detailed by law firm Webber Wentzel in reaction to the legal challenge.
- For more articles, go to www.BusinessInsider.co.za.
Other local e-services platforms that rely on independent contractors are watching closely as a landmark legal battle brews between Uber South Africa and some of its drivers.
One such company believes that the troubled question of employment benefits could lead to the creation of a new category of worker to be legally recognised in SA.
A large and growing number of on-demand platforms connect service providers with clients. Uber, founded in 2009, is arguably the most well-known examples of this e-service boom, now providing an alternative to traditional cab services in 69 countries.
Uber and its peers rely on independent contractors who are not tied down by formal employment contracts and can determine their own hours of work and, in most cases, work multiple jobs.
But the balance between flexibility and employment benefits is now a debate in several countries, with Uber at the centre in most. Especially after a ruling handed down by the UK Supreme Court in mid February.
The London court declared that some Uber drivers should be recognised as workers. That affords those drivers worker benefits, such as paid holidays, which aren’t offered to independent contractors.
“The classification of the claimant Uber drivers as 'workers' by the UK Supreme Court entitles them to more statutory rights than those afforded to independent contractors, but fewer than those enjoyed by employees,” says South African law firm, Webber Wentzel.
Emboldened by the UK ruling, some drivers in South Africa are moving towards their own class action suit. Represented by Johannesburg-based Mbuyisa Moleele Attorneys and law firm Leigh Day, which successfully argued the recent UK case, those Uber drivers say they want to be recognised as employees under the Labour Relations Act and the Basic Conditions of Employment act.
Mbuyisa Moleele Attorneys and Leigh Day intend to argue that Uber drivers in South Africa are entitled to paid leave, overtime pay, and membership of the Unemployment Insurance Fund.
Uber SA maintains that its drivers prefer being recognised as independent contractors and do not wish to be constrained by formal employment.
“The outcome of the potential class action will significantly influence not only the rights of Uber drivers, but also the rights of other individuals undertaking platform work,” says Webber Wentzel in detailing alternative legislative interventions which could offer drivers better protection and benefits without explicit recognition within the Labour Relations Act and the Basic Conditions of Employment act.
Uber SA is not the only on-demand e-platform operating in South Africa and, as pointed out by Webber Wentzel, the looming class action suit has the potential to shake-up a host of other companies leading the gig economy.
“At SweepSouth, we believe first and foremost in creating dignified work opportunities, with decent pay, in a country where unemployment is as high as 40% and where rates of unemployment among domestic workers and other home services providers are likely even higher,” says Aisha Pandor, CEO of SweepSouth, which provides an on-demand domestic worker service.
“We believe the issue is less about classification and more about benefits and anticipate that over time a third worker classification will emerge that supports access to certain benefits but also respects the flexibility of workers and the true nature of platforms which seek to connect two parties together.”
This “third worker classification” is already set by the UK, which distinguishes between employees and workers. Webber Wentzel, in listing alternative legislative interventions which echo Pandor’s sentiments, proposes incorporating the Fairwork Code of Good Practice for the Regulation of Platform Work in South Africa into South Africa’s Labour Relations Act, which provides five key rights:
- minimum wages
- protection under the Occupational Health and Safety Act 85 of 1993
- written contracts defining working conditions
- fair management
- freedom of organisation
Alternatively, the minister of employment and labour could declare that ride-sharing drivers are deemed to be employees only within selected sections of the Basic Conditions of Employment act and Labour Relations Act.
Another e-hailing service in South Africa has warned of the consequences should drivers be classified as employees of the company.
“The ruling will be challenging to thousands of private hire drivers who entered this industry seeking flexible hours and having the freedom to choose when to drive,” says Gareth Taylor, country manager of Bolt South Africa.
“Having such flexibility is a key attraction for drivers when using ride-hailing platforms because of the benefit it brings.”
“Bolt supports drivers who wish to maintain their choice of flexibility, control and independence," Taylor says.