Amazon delivery

Why Latest Lawsuit Against Amazon Is One To Watch

Amazon’s attempts to prevent workers bringing about an employment tribunal were thwarted recently, with a judge ruling that the case should be heard.  Amazon had argued that their delivery operations are outsourced to service partners and as such could have no claim over Amazon – in other words any issues relating to employment rights were the responsibility of the delivery partner.  The judge did not agree, and the case will proceed, read the full story here.

Does Amazon’s argument have legs?

Even though we might not agree with it, Amazon’s argument of an outsourced service meaning those workers are not their problem is logical, and no different than any other supply chain.  So this opens up the moral dilemma of to what extent can a business at the top of the supply chain be held accountable for how workers are treated by it’s suppliers?  We are increasingly aware of potential exploitation as businesses seek to cut costs by outsourcing, and this is of course why initiatives such as Fairtrade Foundation exist.  But we don’t usually expect to apply these principles to supply chains within the UK.

Why does it matter?

However, in this case the judge has decided that Amazon could be held responsible for workforce issues within their supplier, because Amazon closely controls how the self-employed drivers do their work.  Whatever the reason, it’s big news because lots of businesses outsource services, and many of their suppliers engage a self-employed workforce who could presumably bring about a similar case against the firm at the top.  And workers are more likely to be exploited (and therefore have a case to bring about) in supply chains where the margin is squeezed so much that suppliers cannot compete compliantly.

Applicable to the recruitment sector?

It has been suggested that this case could be applicable to more general recruitment scenarios where an agency provides workers to a client, i.e. not an outsourced service.  Here the client exerts day to day control over the workers, not the agency (or umbrella if there is one in the supply chain), so could these workers seek claims from their client?  It seems unlikely, but not impossible, particularly if the Amazon workers’ claims are successful.

IWORK’s founder Julia Kermode told reporters:

“This case may not have gone the drivers’ way, yet.  But the fact that it will be heard is huge news.  Lots of businesses outsource to suppliers who engage self-employed workers.  This case could be a catalyst for many other self-employed workers following suit, cutting out the middleman and attempting to secure employment rights from the business at the top of the chain.

“It also casts a moral spotlight on the supply chain itself.  When margins are squeezed, many suppliers can’t compete and have no choice but to cut costs.  A self-employed workforce can save significant overheads which is financially attractive, but these people have no statutory protections such as paid holiday and minimum wage.  And if they are not genuinely self-employed – able to decide how, where and when they work – then it’s exploitation.  Simple as that.”

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