Guy Davidov is the Elias Lieberman Professor of Labour Law at the Hebrew University of Jerusalem, and currently a visiting scholar at Berkeley Law.

This is the second post in a three-part series.

In my previous post I advocated purposive interpretation of the term “employee” to set the scope of labour law.  This is not an original position; other labor and employment law scholars have adopted this approach before me.  However, there was very little attempt to actually articulate the goals of labor law and derive conclusions for the appropriate “who is an employee” test.  This is something I have engaged with for some time; below is a very brief summary (with apologies for the multiple self-references).

What does a purposive approach mean in practice, in the current context? Some have criticized it for being a case-by-case solution with no determinacy.  It appears that some courts (for example in Israel) are adopting this approach: only after applying the “regular” tests, they ask in difficult cases whether the purpose of the law justifies the inclusion of the worker in question within the protected sphere.  As a result, labor and employment laws are applied on specific workers that appear to be vulnerable but were left out by the tests.  While better than nothing at all, such an approach misses the point of purposive interpretation, which requires us to rethink the tests themselves.  The tests were developed by courts, and they have to make sense in light of the goals of the legislation.  If the tests lead to results that seem unwarranted, this is probably because they are not in tune with the purpose behind the law.

What is the purpose, then? A critical challenge is to choose the right level of abstraction or generality, in two respects.  First, specific labour laws have specific goals.  But there is also a general goal behind labour laws.  If we want some degree of universalism, rather than complete selectivity (in which the meaning of “employee” is different for each and every law), we need to focus first on the general goal.  Later, the scope of specific regulations can be amended, if needed, in line with more specific goals.  As for the general goals, they can be articulated at different levels of abstraction.  We can explain the need for labor and employment laws in terms of the general values that they advance, such as equality, workplace democracy, distributive justice, autonomy, efficiency (more controversial) or maximizing capabilities.  At another level, we can say that labor and employment laws are needed to correct market failures or (most common) to address the inequality of bargaining power between employer and employee.  Also, we can explain labor and employment laws as addressing the vulnerabilities characterizing employment relations, which in my view are democratic deficits (or subordination, broadly conceived) and dependency.

The different articulations listed above do not contradict each other; they are all correct.  The challenge is to choose the articulation that is most useful for current purposes, and this seems to be the latter one.  If labor and employment laws are needed to counteract subordination and dependency, they should cover workers who suffer from these vulnerabilities vis-à-vis an employer.  And these characteristics are specific enough to allow us to make this determination, i.e.  to identify those in need of protection (which is not possible with a vaguer concept such as inequality of bargaining power).  Although one can certainly also argue that Uber drivers should be employees for reasons of distributive justice, this is not helpful to solve the next/other challenge.  It is much better to identify ex-ante the kind of relationships that create a systematic disadvantage (vulnerability) in distributive and other respects.  With this in mind, the different indicia used to identify employees should be re-examined, to consider if they are helpful and relevant in identifying the existence of subordination or dependency (a task I perform in my recent book).

To clarify, this does not ignore the fact that specific pieces of legislation have other goals.  The point is that they also share some basic reasoning: we need to intervene in the context of these market transactions (and not others), we need to protect workers under this kind of work arrangements (and not others), because of some basic characteristics that are unique (or stronger) in this exchange/relationship.  Consider, for example, the California Family Rights Act, the California Wage Theft Protection Act, and the National Labor Relations Act – to give just a few diverse examples.  Obviously they each have their own goals.  But why do they all apply only to “employees” and exclude independent contractors? I suggest that the answer has to do with the vulnerabilities mentioned above.  This leads us to a general interpretation of “employee” that can then be used at least as a starting point, before making it broader or narrower, if needed, in light of specific goals.

Generally speaking, the tests proposed here appear similar to those adopted by courts around the world.  But there are a number of important differences.  First, control (or subordination, the term usually used in Europe) is understood not in a technical way, but more broadly – the question is whether there is submission to commands or to rules of the organization.  Second, economic dependency is given more weight, and is similarly understood also in a broad sense – the question is whether the worker is in a position to spread risks.  Third, dependency is not only economic, but also for the fulfilment of social and psychological needs.  Finally, the more specific indicia are just aids to identify the two general vulnerabilities, and should be retained only if able to do so.

Should we require both subordination and dependency to determine that one is an employee? It appears that much of the labor and employment law apparatus is designed to counteract dependency (and mostly economic).  There are however some regulations designed to protect against subordination, and some concentrated on social/psychological dependency (the importance of work for the individual).  Perhaps the easiest solution – in terms of minimizing upset of current laws – is to require some degree of both subordination and dependency for employee status – but extend current protections in two ways.  First, the more a relationship is characterized by dependency, the less the worker will have to show subordination to be considered an employee.  Second, at least some labor and employment laws – probably most – should be extended also to workers in a position of economic dependency, even without any subordination, through an intermediate category of “dependent contractors”.  Thus, for example, the right to a minimum wage, and the right to bargain collectively, are both needed in situations of economic dependency, even without subordination/control.

In the next and final post of this series, I will (finally…) consider how these general insights should be applied in the context of Uber drivers.