The Future of Work: Litigating Labour Relationships in the Gig Economy

Corporate Legal Accountability Annual Briefing 2019

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Executive Summary available in English, Arabic, Chinese, FrenchGerman, Russian and Spanish.

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The world of work is changing, and lawyers have a key role to play in shaping future labour rights. This year’s Corporate Legal Accountability Annual Briefing focuses on the misclassification of workers as “independent contractors” in the gig economy - and the resulting erosion of labour rights - as workers, civil society, governments, and companies negotiate the future of work.

Workers are fighting back and asserting their labour rights in courtrooms around the world. This report identifies various litigation trends and strategies, and calls attention to gaps in legislation related to protecting the core labour rights of non-conventional workers.

Key Findings

Companies misclassify workers to maximise profit

  • Companies regularly misclassify workers as “independent contractors” to lower overhead costs and maximise profits, at the expense of workers’ wages and labour rights.
  • As a result, gig workers are not afforded adequate legal protection and are carrying out low-paid, precarious work without collective bargaining power.

Workers and lawyers are using litigation as a key strategic tool to fight corporate impunity

  • Workers and lawyers around the globe are challenging this prevalent corporate strategy, by going to court to assert their core labour rights.
  • Litigation is a key corporate accountability tool for workers, and creates important opportunities to develop new employment standards through caselaw.

Companies actively undermine workers’ rights and access to justice

  • Many companies are proactively preventing workers from asserting their core labour rights by preventing the passing of labour-friendly legislation and by trying to keep labour disputes out of court.
  • Gig economy companies have spent billions in strategic advocacy globally to shape regulatory frameworks to their own benefit. They typically use forced arbitration clauses and class action waivers in workers’ contracts to prevent workers from accessing the courts and collectively organizing.
  • Companies vigorously challenge lawsuits by appealing them in higher courts and systematically use out-of-court settlements to prevent the courts from setting legal precedents.

Key Opportunities

The report identifies three key opportunities to be leveraged to create a better future of work for all:

1.    Corporate Responsibility to Respect Human Rights

Companies should correctly classify workers entitled to full labour rights and protections and refrain from challenging policies and legislation that afford labour rights and protections; put in place human rights policies and processes, remediation, and human rights due diligence processes; and provide for legitimate remediation processes, and abolish forced arbitration clauses in workers’ contracts.

2.    Legislative Reform

Lawmakers should close the gaps in their labour laws by adopting a presumption in favour of employee status for gig workers, and passing laws recognising gig workers’ rights to a minimum wage, paid overtime, the right to collective bargaining, unemployment insurance, and paid family and medical leave.

3. Business Incentives

Governments should avoid incentivising the “independent contractor” model and create incentives for business to classify workers as “employees”, thereby supporting worker empowerment in this new economy.

Previous briefings:

June 2018

April 2017

February 2016

January 2015

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