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Setback for the uberization: the drivers-deliverers are in fact employees!
On the 28 November 2018, the « Cour de cassation » (French judiciary Supreme Court) delivered a judgement which gained wide impact in the world of the numerical service platforms. This decision compromises a big part of the economic system founded on the so-called uberization of the labour market process.
Context of the decision
« Uberization » gives its name to the recent phenomenon of the labour flexibilization which is encouraged by the numerical era and its intermediation, transport and delivering service platforms.
Moreover, the « Cour de cassation » recently imposed a powerful setback to this movement by deciding that, under certain conditions, the relation between the platform and its deliverers, a priori independent, was in fact based on an employment contract.
In this case, the « Conseil des prud’hommes » (Labour Court) recused itself for the resolution of a conflict between a deliverer and the platform for which he was working. The deliverer petitioned the « Conseil » to requalify the partnership into an employment contract. The « Conseil » declared itself incompetent by considering that the relationship between the parties was simply commercial and couldn’t be ruled by the protective rules of Labour Law.
The seized Court of appeal confirmed the first decision and then the deliverer referred to the “Cour de Cassation”.
Content of the decision
The « Cour de cassation » decided that the deliverer must be considered as an employee.
The judges deduce this affirmation from their recognition of the existence of a subordinate relationship. This subordinate relationship was revealed by the control and the sanction operated by the platform to the deliverer. Indeed, the platform was using a GPS tracking system and a bonus-malus system for its deliverers.
The « Cour de cassation » challenges the Court of appeal’s reasoning. In fact, the latter had opted for the criterion of the deliverer’s freedom. Indeed, he was able to choose his working time and could agree or deny the courses freely.
Thus, for the supreme judges, the degree of the deliverer’s freedom isn’t important, as soon as a subordination relationship is revealed, we are dealing with an employment contract.
Yet, until this judgement, the case-law was used to qualifying the subordinate relationship through a range of indicia, like the Court of appeal did. Nevertheless, here, the « Cour de cassation » seems to convince itself on the sole power of control and sanction. This leads to the question of whether a relationship with no power of control and sanction can or cannot be qualified of an employment contract.
Consequences for the deliverer who became employee
This decision obviously favours the deliverer since he will benefit from the protective Labour Law regime for his whole relationship with the platform, meaning from his hiring.
Regarding his « newly designated » employers, the employee will have to check if a collective agreement is applicable. If so, he will be able to demand an indemnity for the non-application of the agreement. He will also have to determine to which classification in the agreement his position corresponds to, and deduce all the agreement’s benefits, or legal ones, he is eligible to.
It should also be verified for instance, that the remuneration he received is conform with the minimum wage applicable dispositions. He will also be able to demand the retribution of his payed leaves or even, if applicable, an indemnity for the breach of the Sunday work’s legislation.
Moreover, as it’s very likely that the deliverer isn’t working for the platform anymore, he will be able to raise at his advantage the employment contract termination and rely on an irregular dismissal (dismissal « without fair cause »).
Finally, the deliverer, as a former self-employed worker, had to pay a social contribution proportionally to its sales revenue. Therefore, he should be able to demand a refund to the URSSAF (French institution in charge of the social contribution collection).
Consequences for the platform
The consequences for the platform are huge, which should also affect its competitors. In addition to the exposed consequences which will apply individually to the happy new employee (adjustments of salaries and other underlined indemnities), the decision puts the newly designated employer at other risks.
First, he is exposed to administrative sanctions. For instance, since he hasn’t formalized the prior hiring declaration to the URSSAF, a financial sanction could be applied to him. Besides, if the conditions are complied, the sanctions associated to the undeclared work infraction could also be applied.
Then, there is no doubt that the URSSAF will claim the employer’s contributions since the beginning of the relationship. This consequence can be particularly heavy for the platform since it’s certain that it has numerous deliverers who are also eligible to the requalification. Thus, the exposed consequences will also be applicable for those other deliverers.
Finally, as a consequence of this last assertion, the platform will be obliged to operate a huge compliance work. On the one hand, it will necessarily have to pay the adjusted salaries and the legal and conventional benefits to its employees, and this, since the hiring of each and every one of them.
On the other hand, the platform will have to make a choice between, fully complying with the Cour de cassation’s judgement (and the second Court of appeal’s decision), by formalizing for each deliverer an employment contract, or modify its organization in order to remove the so-called subordination relationship. In this case, the platform will have to stop to control and sanction its deliverers, though without being protected from potential new requalification cases.
Besides, the current employed deliverers will have to be maintained in this regime. Indeed, as a reminder, the contract’s termination initiated by the employer must be based on a fair cause. If not, the termination is actually an irregular dismissal.
Is it the end of the uberization phenomenon?
The Paris Court of Appeal recently followed the example of the supreme judges by requalifying the partnership of an Uber’s driver into an employment contract in a judgement dated 10th January 2019 (see our press review).
Nevertheless, it is most likely that the platforms in question are not ready to let the economic system they built fall apart.
The commented decision, which is a safeguard to a more important casualization, doesn’t completely shut the doors to this economic system.
First, we must underline that the Paris Court of Appeal already tried to impose such a position with a decision of December 2017 in relation with a driver from the platform « Le Cab ». The platform in question weren’t really rattled by such a judgement.
Also, it must be noted that we are dealing with a first « cassation » judgement, which is remarkable but pioneer. Still, the second Court of appeal will have to comply with it and, with no doubt, the platform will have to face the exposed consequences. However, it isn’t impossible that one day the jurisprudence will reverse its position or will have a different opinion on rival or equivalent platforms’ processes.
Then, as explained, the platform can also evolve their partnerships with the deliverers toward more autonomy in order to avoid requalification cases. Concretely, they will have to remove every control or sanction power. Though, as explained previously, the absence of these elements doesn’t ensure to the platforms the avoidance of potential requalification if the judges operate through range of indicia.
Finally, it isn’t not impossible that the legislation evolves, in particular with the influence of the European jurisprudence and the foreign examples, to include in the end a regime halfway between the employee and the self-employed worker. Countries such as Spain of United-Kingdom already chose this path.
Are the Yellow Jackets a force majeure?
The movement of the so-called « Yellow Jackets » which influence has extended outside our frontiers, reveals a surprising regularity. Indeed, each Saturday since the 17th November 2018, the demonstrators gather to show their anger. The news programs are full of images showing deliverers and entrepreneurs who are blocked by the demonstrators and prevented to comply with their contractual commitments.
The idea of this article isn’t to discuss the legitimacy of the causes of the movement or its claims. Its goal is rather to underline a particular unexpected legal effect of the demonstrations’ regularity. This consequence, which is related to the force majeure, affects most of the service contracts.
Indeed, in French Law, the force majeure is defined like an « event escaping from the debtor’s control, which couldn’t be reasonably predicted at the time of the conclusion of the contract and which effect can’t be avoided by appropriated measures, and prevents the debtor to execute his obligation » (article 1218 of French Civil Code).
In case of a breach, the debtor can be exonerated from his liability if the non-performance is due to an irresistible and unpredicted event at the time of the contract’s signature.
From this, arises the question of the force majeure qualification for the Yellow Jackets’ blocks. Indeed, if the contract was signed after the 17th November 2018, and as soon as the blocks take place each and every Saturday, is it really consistent to allege they are a case of force majeure, which is intrinsically unpredictable?
It isn’t possible to determine what the judges will decide if they will face this legal question regarding the particularity of each case. Nevertheless, we think it is absolutely essential to solve this legal insecurity with an appropriate drafting of the contracts which signatures are planned while the movement is still operative.
In fact, it is usual to integrate in the contracts or general conditions a force majeure clause which aim to give examples of what the parties want to consider as such event. Moreover, under the Anglo-Saxon contracts influence, the companies almost systematically include the example of the strike or demonstration.
In this respect, the debtors will have interest in including the Yellow Jackets’ blocks in the force majeure provisions. If not, in case of a breach due to a block, there is a very good chance that they will be prevented from the faculty to rely on the force majeure exemption
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