Uber – a (temporary?) victory for common sense over law

Amir Paz-Fuchs
Amir Paz-Fuchs

As a late-October treat, the Employment Tribunal (ET) found that Uber drivers are, in fact, well, Uber drivers. This is less tongue in cheek than what it may seem; for a significant part of the ET’s was more common sense than law. In fact, as the ET went through the case law, it seemed that it was stacked against the claimants. Thus, you have a caddie in a golf club who was paid through the club, which was reimbursed by patrons for whom he provided services; and there is case of a lap dancer who was paid in ‘heavenly money’; and there was even a straightforward precedent of taxi drivers, whose position was (unsurprisingly) very similar to that of Uber drivers. In all these cases, the Courts denied the claimants any employment status, including the low-tiered status of ‘worker’, which would guarantee rights to minimum wage, working time protection and (where relevant) whistleblowing protection, for example, all of which were claimed in this case.

But there’s more law, and more bad news. As may be expected, the contract that existed sought to cover all the bases. The drivers were, initially, referred to as Uber’s ‘partners’ (a striking resemblance to a similar practice maintained by the scourge of workers – Walmart; in a delightful twist – it has just been announced that a collaboration will be tested between the two companies). Later on, in a confusing shift, revised documents referred to drivers as ‘customers’ while those previously known as customers were now ‘users’. And, needless to say, all documents denied any form of employment relationship between Uber and the drivers. Indeed, documentation (and arguments) suggested that not only is there no such relationship, but that Uber itself is not a transportation company at all! It is simply a software company, that developed an app! We return to this point below. But it’s not only the formal documentation. Uber’s lawyers made sure that where they could, the common law tests would point to drivers being self-employed. Thus, the Business Reality test, which asks where the risks lie, point directly where the company wanted it to point. The driver is to supply the vehicle, must meet all the expenses, fund their licences, treat themselves as self-employed for tax purposes, and are not provided with a uniform.

So much for what the company could do. What it couldn’t change, however, was the reality. Uber chose drivers through an interview process. In advertising itself, it referred to the high quality of, you guessed it, ‘Uber drivers’, to the high standard of used as ‘Ubers’ and to its customers as ‘Uber passengers’. How does Uber maintain the high standard of drivers? By encouraging users to rate their experience, initiating ‘quality interventions’ when those are sub-par, and eventually ‘disengaging’ drivers who do not manage to maintain the necessary ratings.

And while Uber vehemently denied exercising any ‘control’ over the drivers, the app suggests the route, which the driver is expected to follow. In addition, while Uber maintained that the driver is a self-employed business, working on its own (and, indeed, purchasing a service from Uber!), he was not allowed to contact the client following the ride, and in particular, was strictly prohibited from giving the client his phone number, as that would be considered solicitation, and thus a breach of the agreement with Uber. Similarly, drivers owed Uber duties of confidentiality, and were obliged not to speak negatively about Uber.

What did the tribunal make of all this? It managed to distinguish some of the cases where the claimant was not an ‘integral’, but rather an ‘ancillary’, part of the business (caddie at golf club, lap dancer at night club). It simply ignored the business reality test. And it regarded the all important (for some) ‘mutuality of obligations’ test as not-so-important after all, if claimants seek to establish worker, as opposed to employee, status.

But in the main, the most striking thread of the ET’s reasoning is its resort to common sense over legal conceptualisation, legal documents and legal masquerade. It cites with agreement Elias J (as he was then) in Kalwak (reversed by the Court of Appeal), who warned about ‘armies of lawyers’ who simply place clauses in employment contracts to make them appear different from what they truly are. And it went further, expressing, perhaps, no less than indignation. The passages are worthy of quoting at length:

[87] “We are struck by the remarkable lengths to which Uber has gone to compel agreement with its (or perhaps we should say its lawyers’) description of itself and its analysis of the legal relationship between the two companies, the drivers and passengers. Any organisation (a) running an enterprise at the heart of which is the function of carrying people in motor cars from where they are to where they want to be …. But (c) requiring drivers and passengers to agree, as a matter of contract, that it does not provide transportation services and (d) resorting in its documentation to fictions, twisted language, and even brand new terminology merits, we think, a degree of scepticism.

It quotes, in agreement, a similar case decided by the North California District Court (11th March 2015), also rejecting the assertion that Uber is ‘merely’ a technology company, stating succinctly:

Uber does not simply sell software; It sells rides. Uber is no more a ‘technology company’ than Yellow Cab is a ‘technology company’ because it uses CB radios to dispatch cabs.

And the ET continues:

[90] ‘The notion that Uber in London is simply a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous. In each case, the ‘business’ consists of a man with a car seeking to make a living by driving it.

Words to live by, and so rare.

What are the implications of the case? Despite the loud headlines, suggesting that it will affect not only 30,000 drivers in London and 40,000 across the UK, but the gig economy overall, it is worth reiterating that Uber drivers were only guaranteed worker’s rights, which are far more limited than employee’s rights (for example, they have no right for compensation for unfair dismissal). Moreover, Uber immediately wrote to its drivers that it will appeal the decision. Indeed, it continued its ignominious tactics by writing to the drivers that the decision applies only to the two drivers who submitted the challenge, and therefore there is no change in the driver’s ‘partnership with Uber’. This is obviously misleading, to say the least, but to what extent can the decision apply to the gig economy as whole? Other developments, such as the HMRC investigation into the status of Hermes drivers, suggest that authorities are finally awakening to the precarious reality of workers in this brave new world. But for the time being, we can take comfort in what is, at the very least, a temporary victory for commons sense.

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Who Should Pay for Access to Justice?

Amir Paz-Fuchs
Amir Paz-Fuchs

The summer of 2016 was an interesting one for those concerned with the state of access to justice in the UK. The House of Commons Justice Committee published a report that criticised the imposition of court and tribunal fees by the Government; and the Supreme Court struck down the residence test introduced by the then Lord Chancellor, Chris Grayling. Together, the message from two prominent branches of government, is a mixed one. On the one hand, it shows that the changes that the Government has put in place in recent years have been extremely detrimental for those are most in need of accessing the justice system. On the other hand, it shows that the battle is not lost. That the term – access to justice – still resonates strongly and holds sufficient sway to challenge government policies, and even to brand them as illegal. In this post, we focus on the Justice Committee report (hereafter: the report) and only note a few curious aspects concerning the Supreme Court ruling.

It is difficult to describe the Justice Committee Report as anything more charitable than a scathing critique of government policies in this area, an assessment given further force by the fact that the Committee is chaired by a member of the Conservative party – Robert Neill MP. The report seems to be bewildered not only

Robert Neil MP
Robert Neil MP

by the decisions themselves and the impact on hundreds of thousands of court users, but also on the amateurish structure for fee remissions and the evidence based process (or, rather, lack thereof) following which the decisions were made. But notwithstanding the importance of the process, the changes themselves are striking in their audacity, and their implications. We note here the fees introduced in Employment Tribunals [ETs, EATs], Family Courts and Immigration Tribunals, each having special characteristics.

The rise of fees had the most immediate effect in Employment Tribunals. The MoJ Impact Assessment document from 2011 reveals that these were implemented with two main aims in mind. First, a “fundamental policy aim … to transfer a proportion of the cost of running the ET and the EAT from taxpayers to the users”. In fact, by the time the fees were implemented, in 2013, the government intended to achieve full cost recovery by “charging fees reflecting, or in some cases exceeding, costs incurred…” [para 10]. Second, to encourage the resolution of disputes outside of a tribunal. While the document does not explicitly mention the aim of discouraging weak or vexatious claims, it does mention the objective of encouraging claimants to make a more informed decision about the value of their claim. Moreover, a Department of BIS report, Resolving Workplace Disputes, from the same year, said in relation to employment tribunal fees that “a price mechanism could help to incentivise earlier settlements, and to disincentivise unreasonable behaviour, like pursuing weak or vexatious claims” [p. 50]. So what is the result of all these benign motivations? The Coalition government introduced employment tribunal fees in 2013, in two categories: ‘Type A’ and ‘Type B’. Type A claims, which are considered less complicated (e.g. unpaid wages) command £160 issue fees and £230 hearing fees (£390 in total); Type B claims, considered more complex (e.g. discrimination) require £250 in issue fees and £950 in hearing fees (£1200 in total).

The effects were dramatic: an overall drop of 70% in employment tribunal claims submitted following the introduction of fees, spread across all claim ‘types’: working time (78% drop); unfair dismissal (72%); breach of contract (75%); unauthorised deduction of wages (56%); sex discrimination (68%). Moreover, if the government did indeed expect that the introduction of fees will encourage the resolution of disputes through ACAS, the law of intended consequences worked in brilliant fashion here. The Justice Commission concluded, based on a considerable amount of evidence that “far from encouraging early conciliation and resolution of disputes, employment tribunal fees were having precisely the opposite effect, because there was no incentive for an employer to settle in cases where the claimant might have difficulty raising the fee” [64]. Indeed, an employment solicitor gave evidence that “When I advise an employer, why would they engage in early conciliation? You wait for the employee to pay a fee” [64]. As for vexatious claims, the government had no evidence of the proportion of such claims before, or after, the imposition of fees. Moreover, since the proportion of claims rejected was very similar before and after, there is little to suggest any impact on that front. It should be noted that despite this evidence, a legal challenge to the imposition of employment tribunal fees, brought by Unison, failed before the Court of Appeals, and is now before the Supreme Court.

In family courts, fees for divorce proceedings were enhanced from £270 to £410 in 2015, and to £550 in 2016. As the President of the Family Division, Sir James Munby, noted before the Commission, there can be no behaviour changing rationale for these fees. In fact, he stated, (at [87]) that

There are only two things that the justice system does where you have no choice but to use the system. One is divorce; the other is probate. …. Therefore, we have a captive market… I have to say that there is something rather unattractive—particularly if one is selling justice, which one should not be doing—in battening on to the fact that there is a captive market and that, because there is no elasticity of demand, one can simply go on putting up the fees until it becomes another poll tax on wheels.

Finally, the imposition of fees for Immigration Tribunals, and specifically – the extent of the increase, seems uniquely cruel. Fees were increased to a cost recovery level: for a decision on paper from £80 to £490; for an oral hearing from £140 to £800; and new fees, of £455 for permission to appeal to the Upper Tribunal, and £510 for the hearing, were introduced. There is little surprise that the combination of new fees amounting to hundreds of pounds, a six-fold increase in existing fees, all imposed on extremely vulnerable claimants, including asylum seekers, facing the power of the state – raised concern with the Commission.

The flip side of a fee imposition regime is a fee remission structure. But here, too, the Commission finds that the government plan is flawed. Without delving into the details, the way the government calculated a claimant’s disposable income for the purpose of assessing eligibility borders on the fictitious (see [76]). In addition, as the Council of Employment Judges noted, the low level of income necessary for remission eligibility will exclude many low paid workers in the care, security, hospitality or cleaning industries who previously claimed – successfully – unauthorised deductions in sums that were small, but significant to them [72].

Finally, it is worth mentioning the ‘evidence base’ aspect, or lack thereof, that supposedly facilitated the imposition of fees. The report dedicates a full section to the way the Government conducted itself in this regard. It cites senior members of the judiciary who were “scathing about the quality of the research used by the Ministry to inform its policy formulation” [49]. Indeed, their response refers to the research undertaken as “clearly inadequate” (para [26] to the response). In addition, the Master of the Rolls, Lord Dyson, has characterised the research as

Lord Dyson
Lord Dyson

“lamentable”; the Chairman of the Bar Council described it as “insignificant”; and the President of the Law society argued that it is “poor” [49]. Apart from the sad state of affairs, the fact that a central policy is implemented with so little appreciation of its effects on people’s rights, and people’s lives, suggests that it could have only been carried out due to a dogmatic view, that renders effects and consequences as insignificant. This stubborn approach, of the “my mind’s made up, don’t confuse me with the facts” variety, is not, one would hope, characteristic of policy making in the UK in general. But the strong hold of the neoliberal agenda trumps not only concrete, discrete, policies, but also policy making procedures and the rules of the game.

This latter point leads us to the aforementioned decision by the Supreme Court, in The Public Law Project (PLP). The PLP challenged the draft order put before Parliament by the Lord Chancellor, on 31 March 2014, which introduced a residence test as a precondition for eligibility for legal aid. It claimed that the order is ultra vires section 9(2) of the Legal Aid, Punishment and Sentencing of Offenders Act 2012 (“LASPO”) and is unjustifiably discriminatory in its effects. Both claims were accepted by the High Court, and both were rejected by the Court of Appeals. Writing for the Court, its President, Lord Neuberger, reversed again. He noted that while section 9(2)(b) empower the Lord Chancellor to “vary or omit services”, they do not empower him to “reduce the class of individuals who are entitled to receive those services by reference to a personal characteristic or circumstance unrelated to the services” [30], which is what the draft order seeks to do. Since he accepted the ultra vires argument, he saw no need to address the discrimination issue.

Although the ruling is ‘administrative’, and thus somewhat ‘procedural’, in its focus, there are two important points that may be made. First, although it is understandable, it is also somewhat unfortunate that the Court decided not to delve into the substantive argument. As I noted elsewhere, in an analogous context (a successful ultra vires argument that led to a DWP workfare programme being struck down): procedural challenges may often be more successful, but they are short lived. Indeed, in that case, that Government simply revisited the empowering legislation, created the necessary ministerial powers, and the Minister put in place new regulations to (retroactively!) legitimise the programmes. Substantive challenges, of course, are usually less successful, but if they are – cannot be addressed through simple, administrative measures.

The second matter that arises from the decision concerns the justification given by the MoJ for this policy. Here, as with the cost recovery policy scrutinised by the Justice Committee Report, we find the footprint of neoliberal and chauvinist thinking. As the Court notes, the residence requirement was first outlined in a MoJ paper, Transforming Legal Aid: Next Steps, published in 2013. In the Equality Statement, attached to that paper as Annex F, the MoJ described the “primary objective” of the residence requirement as being “to bear down on the cost of legal aid, ensuring that every aspect of expenditure is justified and that we are getting the best deal for the taxpayer”, and further stated that “the reforms seek to promote public confidence in the system by ensuring limited public resources are targeted at those cases which justify it and those people who need it” [6.3, quoted in the judgement at [14]). The first quote transforms public services to market services, by suggesting a hypothetical ‘contract’ between citizens and taxpayers, effectively viewing the former as ‘consumer-citizens’. The latter quote seems to be misleading: the residence test denies legal aid to some of the most needy claimants, such as migrants fleeing horrific situations, or women fleeing domestic violence. So, sadly, the only possible interpretation of the latter statement is that the residence test is intended to fence out not those who are not ‘in need’, but those whose needs ‘we’, the taxpayers, do not wish to address.

Amir Paz-Fuchs is a Senior Lecturer, Sussex Law School

 

From Vulnerability to Discrimination, From Nationality to Immigration

Amir Paz-Fuchs
Amir Paz-Fuchs

As the results of the European referendum sink in, I couldn’t find the energy to focus on the day to day, so decided to write a blog post on a recent Supreme Court case. And wouldn’t you know it, it involves immigration. It seems that you can run, but you cannot hide.

The case is actually a combination of two: Taiwo v Olaigbe and Onu v Akwiwu, involving two Nigerian women who worked as domestic workers for wealthy and influential Nigerian employers in the UK. Though separate, their stories are similar: in both cases the claimants entered the UK legally on a domestic worker’s visa to care for the employer’s children and household; their passports were immediately taken by the employers; they were not given rest periods guaranteed by the Working Time Regulations 1998; were not paid minimum wage; and were routinely abused: Ms Taiwo was spat at, slapped and mocked for her poverty and tribal scars, while Ms Onu was threatened, abused and told (falsely) that she’d be imprisoned if she ran away. In both cases, the Employment Tribunals (ETs) accepted the majority of their claims. Ms Taiwo was awarded compensation under the Minimum Wage Regulation, for failure to provide written particulars, and for failure to provide rest periods. Ms Onu was awarded compensation for unfair (constructive) dismissal, unpaid wages, unpaid holidays and injury to feelings. Where the ETs differ was with regards to the claim that the claimants were discriminated on the basis of race, which includes nationality.

In Ms Taiwo’s case, the ET accepted that while the claimant was mistreated because she was a vulnerable migrant worker, that did not suffice to establish a discrimination claim, since she was not treated as she was because she was Nigerian. Any other worker with a similar immigration status would, presumably, have been treated in a similar fashion, regardless of race or nationality. In contrast, the ET found not only that Ms Onu’s abuse derived from her immigration status, but that the latter is “clearly linked” to her race, since British nationals could not, and would not, be treated in that manner, thus paving the way for a successful discrimination claim. The EAT tribunal accepted the employer’s appeal, in Ms Onu’s case, on the discrimination claim, holding that immigration status is not inherently bound up with race. The cases were joined in the Court of Appeal to decide this very question. Underhill LJ stated, at [50], that

… the ground on which the Respondents were held to have discriminated was, specifically, that the Claimants were migrant domestic workers, with the peculiar dependence on their employers that is a consequence of that status … To say that their immigration status (in that sense) is “intimately associated” with their non-British nationality – or, as the Tribunal in Onu put it, that the two are “linked” – is to say no more than that only people with non-British nationality are migrant domestic workers.  That is obviously so; but what matters is that not all non-British nationals working in the UK are migrant domestic workers or share an equivalent vulnerability.

Lady Hale, for the Supreme Court, rejected the appeal for reasons very similar to those of the Court of Appeal. But it is interesting to note where the Supreme Court agrees with the claimant. This [14] is a crucial passage:

These employees were treated disgracefully, in a way which employees who did not share their vulnerable immigration status would not have been treated. As the employment tribunals found, this was because of the vulnerability associated with their immigration status.

So the SC accepts that the employees (1) suffered from a vulnerability and that (2) that vulnerability was derived from their immigration status and that (3) that vulnerability was exploited in a manner that allowed them to be treated disgracefully. And yet, this was not enough, because immigration status is not included in the list of protected characteristics [22]. Arguments presented by the claimants, referring to instances in which race and nationality were understood in a generous manner, did not suffice. One such example was, to me, particularly relevant: the Home Office Border and Immigration Agency Guidance for Prevention of Illegal Working which, under the category of “Direct Discrimination” on racial grounds gives the example of “an employee with limited leave to remain in the UK is given a more degrading form of work to do in comparison with workers with unlimited leave”. As it so happens, this is the one case that Lady Hale does not address, and thus not explain why it does not support the expansion of direct race discrimination to include employees with different immigration status.

What should we make of this refusal to expand the list of protected characteristics through interpretation? Three possible approaches may be suggested. The first would posit that the ruling is completely right. Nationality and race are not immigration status. The two are not identical. And perhaps Lady Hale is right that immigration status is not the ‘mischief’ that the Race Relations Act, and the Equality Act that followed, was supposed to address. The list of ‘protected characteristics’ is a reasonable one, and some cases will simply fall outside of that list. This may be unfortunate in a particular case, but the law cannot, and should not, address all social ills. A person who falls on bad financial times may be forced to sell her house, or car, below market value, and while a buyer may ‘exploit’ (as in, take advantage of) this situation, the law does not view this as illegal ‘exploitation’.

The second approach is similar to the one adopted by the ET in Onu, that is, that we should read ‘immigration status’ into race and nationality. It stated that “the reality is that they treated the Claimant precisely in the way in which they did because of her status as a migrant worker which was clearly linked to the Claimant’s race”. But this was quickly rejected by the EAT, and perhaps rightly so, for it the immigration status isn’t, actually, linked to race, or even nationality. Leaving aside the fact that the employers themselves were Nigerian, it is easy to imagine a Nigerian with permanent leave to remain in the UK, who is thus less vulnerable to exploitation of her immigration status.

But while the analysis may be missing a logical stepping stone, the philosophical approach of the ET in Onu seems to me to be correct. It suggests (albeit not explicitly) that, to paraphrase Lady Hale’s statement, that this Ms Onu’s situation is precisely the ‘mischief’ that the Equality Act should address. Indeed, she cites in agreement the reasons underlying this vulnerability, all of which are related to immigration status, and apply in the present cases (para [25]):

their motivation and mentality is one of desperation, born of their inability to find work or earn enough to support their families in their home country … ;  they  are  without  the  safety  net  of  friends  and  family  and  other support networks; they are often unfamiliar with the culture and language, which represents  a  significant  barrier  to  wider  social  interaction;  … they mainly work in private homes, which are less easy to regulate; their  work is often part of an informal economy, paid in cash and not declared to the tax authorities; their permission to be here depends upon their employers’ want or need of them; they have no recourse to public funds;.

A purposive approach to the equality law, in the context of employment relations, would suggest that these workers are precisely those who merit protection, for the reasons just noted. Courts have reached beyond the letter of the law, and have interpreted statutes in a very imaginative way, on numerous occasions. This, to my mind, should have been one of them.

The third approach seems to be suggested by Lady Hale, in the opening, and more explicitly, in the closing section of her speech – rolling the responsibility to the legislature, so that the law may be amended to offer this protection. Interestingly, in doing so, Lady Hale does not refer to the Equality Act, but rather to the Modern Slavery Act (MSA). In her concluding paragraph, she suggested amending section 8 of the Modern Slavery Act to allow employment tribunals to compensate workers in that situation. This may seem appropriate, if only because, when they are treated poorly, the conditions of domestic migrant workers is perhaps the closest one could find to slavery and forced labour within ‘normalised’ employment relations in Western capitalist democracies. Indeed, it is probably no coincidence that the first time that the ECtHR recognised the existence of forced labour was in Siliadin, which involved a domestic migrant worker from Togo, employed in France. In an forthcoming article (Badges of Modern Slavery, MLR (2016)) I note, following Virginia Mantouvalou, that the Modern Slavery Act as it stands does not identify (domestic) migrant workers as potentially vulnerable qua their status as migrant workers, despite the fact that it is, perhaps, the ‘natural’ grounds from which to base an argument based on vulnerability and exploitation of labour. As the Council of Europe’s Parliamentary Assembly (yes, that EU again…) noted in its Recommendation on Domestic Slavery: ‘today’s slaves are predominantly female and usually work in private households, starting out as migrant domestic workers’. For more details, and the legal implications, see this article, by Virginia Mantouvalou and Einat Albin.

And yet, while the MSA is plausible route, it would still mean that remedy will be available only to situations of Modern Slavery, i.e. the worst form of exploitation of vulnerability. An alternative would be to add immigration status to the list of protected characteristics in Equality Act 2010. In doing so, it would enable employment tribunals to reach beyond the traditional categories of sex, race, nationality, and even those who were added more recently, such as sexual orientation, sexual identity and age, which fit a liberal paradigm that gives little to no attention to social and economic background. More generally, such change would recognise that immigration status risks putting some workers in a position of critical vulnerability which is more exploited in more circumstances than we would like to acknowledge. .

Dr Amir Paz-Fuchs is Senior Lecturer at the School of Law, University of Sussex

Has the time come for a new test of vicarious liability?

Lily Parisi
Lily Parisi

In Mohamud v Morrison Supermarkets [2016] UKSC 11, the Supreme Court had the opportunity to take a fresh look at the age old doctrine of vicarious liability.

The claimant’s ground for appeal was that the time has come for a new test of vicarious liability in order to reflect modern views of justice. In place of the “close connection” test, the courts should apply a broader test of “representative capacity”. In the case of a tort committed by an employee, the decisive question should be whether a reasonable observer would consider the employee to be acting in the capacity of a representative of the employer at the time of committing the tort.

The question presented to the Supreme Court was whether this would be an effective development in this area of law?

FACTS AND BACKGROUND

On 15 March 2008 the Claimant entered the Respondent’s premises in Small Heath, Birmingham which include a petrol station and a kiosk where customers pay for their purchases. Having parked his car he entered the kiosk to ask whether he could print some documents from a USB stick. Mr Amjid Khan was behind the kiosk desk, employed by the Respondent to see that petrol pumps and the kiosk were kept in good order and to serve customers.

There were two or three staff present. Mr Khan, who was behind the counter, replied by saying “We don’t do such shit” in a foul and aggressive manner. The claimant protested at being spoken to like that. Mr Khan responded by ordering the Claimant to leave. Mr Khan then followed the Claimant to his car. Before the Claimant could drive off, Mr Khan opened the passenger door and told the Claimant in threatening words never to return, punching him on the left temple. The Claimant got out the car and walked round to close the passenger door when Mr Khan subjected him to a serious attack.

In carrying out the attack Mr Khan ignored instructions from his supervisor, who came on the scene at some stage and tried to stop Mr Khan from behaving as he did. The judge concluded that the reasons for Mr Khan’s behaviour were a matter of speculation. The Claimant had not said and done anything which could be considered aggressive or abusive.

The Claimant brought proceedings against the Respondent on the basis that it was vicariously liable for the actions of its employee, Mr Khan.

The Trial Judge’s Decision

The trial judge expressed great sympathy for the claimant but concluded that the supermarket was not vicariously liable for Mr Khan’s unprovoked assault.

His principal reason was that although Mr Khan’s job involved some interaction with customers and members of the public who attended the kiosk, it involved nothing more than serving and helping them.

Applying the “close connection” test laid down in Lister v Hesley Hall Ltd [2001] UKHL 22 (which was followed in subsequent case law), the trail judge concluded that there was not a sufficiently close connection between what he was employed to do and his tortious conduct for his employer to be held vicariously liable.

The Court of Appeal’s Decision

The Court of Appeal upheld the trial judge’s decision that the claim against the supermarket did not satisfy the “close connection” test on the grounds that:

  • Mr Khan was not given duties involving a clear possibility of confrontation or placed in a situation where an outbreak of violence was likely.
  • The fact that his employment involved interaction with customers was not enough to make his employers liable for his use of violence towards the claimant.

It is interesting to note here that Christopher Clarke LJ added that if the question had been simply whether it would be ‘fair and just’ for the supermarket to be required to compensate the claimant for his injuries from the assault, there would be strong grounds for saying that it should.

On the facts of the case, it could be said that the employer could fairly be expected to bear the cost of compensation, rather than that the victim should be left without any civil remedy except against an assailant who was unlikely to be able to pay full compensation. However, he concluded that this was not the legal test, and that the fact that Mr Khan’s job involved interaction with the public did not provide the necessary degree of connection between his employment and the assault which was required for the supermarket to be held vicariously liable.

From my understanding, it appears that Christopher Clarke LJ is expressing some degree of doubt upon the current law if he is indeed going on to discuss a possible alternative legal test. Is he accepting that the current law is potentially flawed and in need of some reform?

Grounds for appeal: The claimant argued that the courts should apply a broader test of “representative capacity” to replace the current test of “close connection.” He argued what mattered was not just the closeness of the connection between his duties to his employer and his tortious conduct, but the setting which the employer himself had created. In this case the employer created the setting by putting the employee into contact and close physical proximity with the claimant.

THE UK SUPREME COURT

JUSTICES: Lord Neuberger, Lady Hale, Lord Dyson, Lord Reed and Lord Toulson.

The Supreme Court unanimously allowed the Claimant’s appeal and held the Respondent vicariously liable for the actions of its employee, Mr Khan, in attacking the Claimant. Lord Toulson delivered the lead judgment.

However, Lord Toulson clarified that the close connection test has been followed at the highest level and there was nothing wrong with that test as such.

Lord Toulson concluded that the Court had to consider two matters.

  • The court must ask what function or field of activities has been entrusted by the employer to the employee and
  • Whether there was a sufficient connection between the position in which he was employed and his wrongful conduct to make it right for the employer to be held liable.

Regarding the first element, Mr Khan’s conduct in answering the claimant’s request in a foul mouthed way and ordering him to leave was inexcusable but within the “field of activities” assigned to him. It was Mr Khan’s job to attend to customers and to respond to their inquiries.

In regards to the second element, Lord Toulson disagreed with the Court of Appeal’s view that there ceased to be any significant connection between Mr Khan’s employment and his behaviour towards the claimant when he came out from behind the counter and followed the claimant onto the forecourt.

Firstly, he said ‘I do not consider that it is right to regard him as having metaphorically taken off his uniform the moment he stepped from behind the counter. He was following up on what he had said to the claimant.’ He argued this was a seamless episode.

Secondly, Lord Toulson believed that when Mr Khan followed the claimant back to his car and told the claimant again that he was never to come back to petrol station, that this was not something personal between them. He stated ‘it was an order to keep away from his employer’s premises, which he reinforced by violence and in giving such an order he was purporting to act about his employer’s business. It was a gross abuse of his position, but it was in connection with the business in which he was employed to serve customers. His employers entrusted him with that position and it is just that as between them and the claimant, they should be held responsible for their employee’s abuse of it.’

He further concluded that Mr Khan’s motive in the attack is irrelevant. It does not matter whether he was motivated by personal racism rather than a desire to benefit his employer’s business.

Lord Dyson agreed with the reasons given by Lord Toulson and emphasised that the close connection test is the correct test to apply.

COMMENTS

I strongly agree with the outcome of this case however I am less convinced that this area of law is in no need of reform. Lord Dyson expresses that the proposed new test is hopelessly vague as he questions “representative capacity” actually means in this context. Whilst I can see the difficulties in applying this concept, I am unsure whether no reform at all is the best solution. As previously mentioned, Clarke LJ mentioned a possible new legal test which suggests signs of a weak current law which is not entirely backed and respected. I think Clarke LJ may have been onto something when he proposed this argument.

What I find difficult to comprehend is that Lord Dyson accepts that this test is imprecise but justifies it on the grounds that imprecision is inevitable. I find it problematic to accept that this is the case and in fact I query whether the judges are reluctant to make any changes to this area of law on the basis that it might be too complex or controversial. It appears Lord Dyson tries to justify this imprecision of the law by discussing how many aspects of the law of torts are inherently imprecise. He uses the example of the imprecise concepts of fairness, justice and reasonableness which are central to the law of negligence. I disagree with the view that these aspects are ‘inherently imprecise’ and I ask whether the law of torts is actually in need of some general reform.

Lord Dyson says that the test ‘should only be abrogated or refined if a demonstrably better test can be devised’, but I believe a conscious effort should be made to develop a new, more effective test which reflects modern day justice. Lord Dyson adds that the attraction of the close connection test is that it is firmly rooted in justice. I feel as though this is a poor justification as the current law has been the same for over thirteen years, therefore it cannot reflect modern views of justice. I think the time has come for some much overdue reform.

How Israel withholds labour rights from the West Bank’s Palestinian workers

Amir Paz-Fuchs
Amir Paz-Fuchs

As Israel’s occupation of the Palestinian territories edges towards its 50th year, violent incidents in the West Bank remain fairly sporadic. The political and economic reality of coexistence in the Palestinian territories has made Palestinians and Israelis deeply interdependent – and especially Palestinian workers and Israeli employers and corporations.

That relationship has always been legally tangled, but in recent weeks, there’ve been new developments that could make things even worse.

To begin with, the Israeli National Labour Court found that Israeli law does not apply to Palestinians working for Israelis in the Jordan Valley, an area of the West Bank that has become infamous for child labour.

Meanwhile, the leader of the right-wing party Jewish Home, Naftali Bennett, succumbed to pressure placed by Israeli farmers in the Jordan Valley and stepped back from his previous commitment to apply Israeli labour law in the West Bank.

That spells misery for West Bank Palestinians working for Israeli employers and corporations, and doubles down on a regime of profound legal inequality.

Choked

Tens of thousands of Israelis are moving into existing settlements and establishing new ones(often on private Palestinian land) –not for ideological reasons, but because the costs are lower and the standard of living is higher than in Israel proper. For the same reason, a great many Israeli businesses are moving to the settlements and to industrial zones. Many of these businesses, especially in sectors such as manufacturing, construction and agriculture, rely on cheap Palestinian labour for their profits.

The Israeli government is still choking the development of an independent Palestinian economy through military orders that curb the use of funds, imposes limits on the supply of water and electricity and restricts access to farm land through the permit system and the separation barrier. That means Palestinians are increasingly forced to rely on Israeli employers to make ends meet.

This is not an unwelcome development on the Israeli side. Palestinian workers are especially attractive to Israeli employers because of a very particular legal situation that’s arisen over the past few years.

Heavy load. Reuters/Ammar Awad

Until 2007, the assumption was that Palestinians were employed in the settlements and in Israeli-owned industries according to the Jordanian law that was in place when Israel conquered the West Bank – except where that law was modified by the military commander of the region.

This situation was based on the law of occupation, which dictates that the occupier should respect the law in force in the occupied territory. However, as the occupation became a prolonged one, a situation developed that those who drafted the laws of occupation never imagined.

Israelis lived in the territory and conducted their economic life as if under Israeli law (as is their prerogative) while employing Palestinians under Jordanian law in the West Bank and Egyptian law in Gaza. Different laws apply for people doing the same work, who are different only by virtue of their race or nationality.

The result is not mere discrimination. The application of different laws for different sections of people is very close to, if not reaches the core of, apartheid.

Separate and unequal

The Israeli Supreme Court, politically savvy as ever, addressed this issue in 2007. In a landmark decision, it ruled that where Palestinians work side-by-side with Israelis in Israeli “exclaves” created from illegal settlements and industrial zones, then the same Israeli law should apply to both Israelis and Palestinians.

Paradoxically, this was not just a victory for Palestinians and their Israeli supporters. It was also supported by right-wing Israeli nationalists, who advocate the annexation of Palestinian land through the application of Israeli law to Area C, the West Bank’s largest subdivision. But the ruling both created problems for Israeli businesses established in the West Bank and explicitly relied on a law that is already anything but generous to Palestinians.

Since 2007, the situation has evolved on both sides. Some Palestinian workers have taken advantage of the rights the Supreme Court decision guaranteed them, while right-wing members of the Knesset continued their efforts to expand the application of Israeli labour law.

Many Israeli businesses sprung into action and began searching for loopholes in the Supreme Court’s 2007 decision. So Israeli law should apply where the employer is Israeli? No problem, we’ll engage a Palestinian intermediary to sign the cheques. So Israeli law should apply where the employment is based in an Israeli exclave? That’s fine, we’ll move the undertaking out of the industrial zone, meaning the employer’s obligations are eased, but their workers still regulated by the same highly restrictive permit regime.

This issue was looked into by the National Labour Court, but sadly, it gave its stamp of approval to legal trickery and ushered in the shameful state of affairs we see today, where the application of different laws to different people is formally acknowledged.

As for Naftali Bennett, he could have responded with a proud national pronouncement that would indicate that nationalist ideology comes at a cost. Come to think of it, perhaps that’s exactly what he did – only the cost is for the Palestinians to bear.

Amir Paz-Fuchs is Senior Lecturer in Employment Law, University of Sussex. 

The post was previously published in The Conversation, and is republished with permission and thanks.