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The gig economy: a hypothetical contract analysis

Published online by Cambridge University Press:  28 June 2019

Marc T Moore
Marc T Moore*
Affiliation:
Faculty of Law, University of Cambridge, Cambridge, UK
*
*Author email: [email protected]
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Abstract

Gig work and other flexible labour practices have been subject to unprecedented levels of attention recently. While this topic has attracted significant interest from employment lawyers, it remains relatively underexplored from other pertinent legal and inter-disciplinary angles. This paper will adopt an alternative perspective on flexible work inspired by Coase's theory of the firm. Focusing on the implications of flexible work for the relative allocation of control, risk and reward within the firm, it will highlight how both task-oriented (gig) and on-demand (casual) work practices typically entail workers assuming most of the positional disadvantages associated with orthodox employment and self-employment, while enjoying none or few of the corresponding advantages. Using a hypothetical contract analysis, it will highlight the structural similarity between flexible work and unsecured financial investments in business firms by reference to key strands of institutional economics and law and finance literature. On this basis, it will enquire as to optimal forms of compensation that rational flexible workers can (counter-factually) be regarded as bargaining for in the absence of impediments to efficient contracting, and as the price for trading off their traditional employment guarantees.

Keywords

flexible workgig economylaw and economicsCoaseemployment lawcorporate governance
Type
Research Article
Information
Legal Studies , Volume 39 , Issue 4 , December 2019 , pp. 579 - 597
Copyright
Copyright © The Society of Legal Scholars 2019 

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Footnotes

†

With thanks to Andrew Johnston, Andreas Kokkinis and Wanjiru Njoya for their close readings of, and insightful comments on, an earlier version of this article. The author is further grateful for comments received at various seminars/workshops where earlier versions of this article have been presented, including at the University of Cambridge, the University of Sheffield and Kingston University London. Thanks are especially due in this regard to Zoe Adams, Simon Deakin, Jeremias Prassl, Michael Wynn, Ting Xu and Frank Zhang. Thanks also to the anonymous Legal Studies reviewer who provided additional valuable suggestions. The usual disclaimers apply.

References

1 Prassl, J Humans as a Service: The Promise and Perils of Work in the Gig Economy (Oxford: Oxford University Press, 2018) pp 2–3CrossRefGoogle Scholar; Rogers, B ‘The social costs of uber’ (2015) 82 U Chi L Rev 85Google Scholar at 85–86.

2 M Taylor Good Work: The Taylor Review of Modern Working Practices (July 2017) p 7, available at https://www.gov.uk/government/publications/good-work-the-taylor-review-of-modern-working-practices; Department for Business, Energy & Industrial Strategy (BEIS) Good Work: A Response to the Taylor Review of Modern Working Practices (February 2018) pp 5, 12, available at https://www.gov.uk/government/publications/government-response-to-the-taylor-review-of-modern-working-practices.

3 AG Haldane (Bank of England) ‘Work, wages and monetary policy’ (speech, 20 June 2017, at 4, available at https://www.bankofengland.co.uk/speech/2017/work-wages-and-monetary-policy; BEIS, ibid, p 10.

4 Chartered Institute of Personnel and Development (CIPD) Zero-Hours and Short-Hours Contracts in the UK: Employer and Employee Perspectives (December 2015), available at https://www.cipd.co.uk/Images/zero-hours-and-short-hours-contracts-in-the-uk_2015-employer-employee-perspectives_tcm18-10713.pdf.

5 See eg Uber v Aslam [2018] EWCA Civ 2748; Pimlico Plumbers v Smith [2018] UKSC 29; Uber v Aslam, Appeal No UKEAT/0056/17/DA (10 November 2017); Independent Workers’ Union of Great Britain (IWGB) v RooFoods Ltd t/a Deliveroo, Case No TUR1/985 (14 November 2017); Gascoigne v Addison Lee Ltd, Case No 2200436/2016 (14 August 2017); Dewhurst v CitySprint UK Ltd, Case No ET/2202512/2016 (5 January 2017). In the US context, meanwhile, see Dynamex Operations West, Inc v Superior Court, Ct App 2/7 B249546 (30 April 2018).

6 See Taylor, above n 2.

7 See House of Commons, Work and Pensions and Business, Energy and Industrial Strategy Committees (HC Committees) A Framework for Modern Employment (Second Report of the Work and Pensions Committee and First Report of the Business, Energy and Industrial Strategy Committee of Session 2017-19) (November 2017), available at https://publications.parliament.uk/pa/cm201719/cmselect/cmworpen/352/352.pdf.

8 See BEIS Good Work Plan (December 2018), available at https://www.gov.uk/government/publications/good-work-plan/good-work-plan.

9 See eg Bales, K et al. ‘“Voice” and “choice” in modern working practices: problems with the Taylor Review’ (2018) 47 ILJ 46CrossRefGoogle Scholar.

10 See Taylor, above n 2, pp 35–36; HC Committees, above n 7, paras 11–15; BEIS, above n 2, p 30.

11 In this regard, the Taylor Review asserts that ‘flexibility must not be one-way with individuals absorbing all of the risk’, and emphasises the centrality to effective employment relations of what it terms ‘the underlying principle of power balance’. See Taylor, above n 2, p 34.

12 See Coase, RH ‘The nature of the firm’ (1937) 4 Economica 386CrossRefGoogle Scholar.

13 Admittedly, the present paper is by no means the first to apply Coasean theory in analysing features of the contemporary gig economy and other flexible work practices. For earlier examples, see Rogers, above n 1; O Lobel ‘Coase and the platform economy’ (2017) University of San Diego School of Law Research Paper No 17-318; Tomassetti, J ‘Does uber redefine the firm? The postindustrial corporation and advanced information technology’ (2016) 34 Hofstra Lab & Emp LJ 1Google Scholar. However, whereas previous such analyses have focused primarily on the implications of task-oriented work for productive coordination, transaction costs reduction and/or labour standards, this paper's analysis is centred instead on the ramifications of flexible work practices more generally in terms of the relative attribution of control, risk and profit between employers and workers. It thus seeks to provide a broader and more multi-dimensional institutional analysis of flexible work practices than those previous works, using conceptual tools adopted principally from corporate law (as opposed to labour law) scholarship.

14 Tomassetti, ibid, at 17–18.

15 On the firm/market dichotomy generally, see also Williamson, OE ‘The economics of internal organization: exit and voice in relation to markets and hierarchies’ (1976) 66 AER 369Google Scholar at 369; Chandler, AD The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass: Harvard University Press, 1977) p 11Google Scholar; and, in the specific context of informationally and/or technologically intensive markets, see Ciborra, CU ‘Markets, bureaucracies and groups in the information society’ (1983) 1 Information Econ & Policy 145CrossRefGoogle Scholar at 148; Malone, T et al. ‘Electronic markets and electronic hierarchies’ (1987) 30 Commun ACM 484CrossRefGoogle Scholar at 485.

16 Coase, above n 12, at 391; Simon, HA ‘A formal theory of the employment relationship’ (1951) 19 Econometrica 293CrossRefGoogle Scholar at 293–294.

17 Coase, above n 12, at 392.

18 Simon, above n 16, at 294.

19 Coase, above n 12, at 390–391.

20 This is what Coase refers to as ‘the advantage of “being one's own master”’, above n 12, at 390.

21 On the notion of residual risk exposure as a justificatory basis for allocating ultimate firm ownership rights, see Putterman, L ‘Ownership and the nature of the firm’ (1993) 17 J Comp Econ 243CrossRefGoogle Scholar at 246–248; Easterbrook, FE and Fischel, DR The Economic Structure of Corporate Law (Cambridge, MA: Harvard University Press, 1996; first published 1991) pp 67–68Google Scholar.

22 Sundararajan, A The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism (Cambridge, Mass: MIT Press, 2016) p 11Google Scholar.

23 This is what Deakin and Wilkinson refer to as the ‘risk function’ of the orthodox employment contract, whereby ‘it channels the risks of economic insecurity in such a way as to protect the individual worker against the consequences of that very same dependence on, and subordination to, the employer's superior resources’. See Deakin, S and Wilkinson, F The Law of the Labour Market: Industrialization, Employment, and Legal Evolution (Oxford: Oxford University Press, 2005) p 109CrossRefGoogle Scholar. On this see also Prassl, above n 1, p 131.

24 In this regard, orthodox (ie guaranteed-hours) employment represents a form of risk insurance insofar as the employee indirectly ‘pays’ the employer (in the manner outline below) for directly assuming a greater share of the risk to which the continuing value of the employee's human capital would otherwise be exposed, and which the employer is better positioned to bear efficiently on account of their typically greater wealth. On the general function of insurance as a mechanism for efficient risk-sharing in this way see Arrow, KJ ‘The theory of risk-bearing: small and great risks’ (1996) 12 J Risk Uncertain 103CrossRefGoogle Scholar at 104; Knight, FH Risk, Uncertainty and Profit (Orlando: Signalman, 2009; first published 1921) p 21CrossRefGoogle Scholar. On the impact of modern flexible labour practices in effectively reallocating a significant share of risk back on to workers, and thereby undermining the efficient risk-pooling function that would otherwise be assumed by better-resourced corporate employers, see Hacker, JS The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream (Oxford: Oxford University Press, 2006) pp 66–68Google Scholar.

25 Simon, above n 16, at 294. Deakin and Wilkinson describe this as the ‘coordination function’ of the employment contract, whereby ‘it expresses the worker's subordination to the managerial power of the employer within the enterprise’. See above n 23; Adams, Z and Deakin, S ‘Institutional solutions to precariousness and inequality in labour markets’ (2014) 52 BJIR 779Google Scholar at 786.

26 Coase, above n 12, at 392.

27 Putterman, above n 21, at 248; Putterman, L ‘On some recent explanations of why capital hires labour’ (1984) 22 Econ Inq 171CrossRefGoogle Scholar.

28 On this generally see Williamson, OE Markets and Hierarchies: Analysis and Antitrust Implications (New York: The Free Press, 1975)Google Scholar.

29 On this see RSA Good Gigs: A Fairer Future for the UK's Gig Economy (2017), Section 1, available at https://www.thersa.org/globalassets/pdfs/reports/rsa_good-gigs-fairer-gig-economy-report.pdf.

30 Prassl, above n 1, p 19.

31 Although for a competing characterisation of gig economy employment models (at least in the app-based private transportation market) as a means of simply reinforcing existing firm-based authority structures by facilitating lower-cost productive coordination by employers, see Tomassetti, above n 13, at 21–30.

32 Indeed, one particularly popular (and seemingly unattributed) definition of the term ‘gig economy’ as used in online sources is ‘a labour market characterised by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs’. See eg B Wilson ‘What is the “gig” economy?’ (BBC News, 10 February 2017).

33 L Hook ‘Year in a word: gig economy’ (Financial Times, 29 December 2015).

34 RSA, above n 29, p 10. On the characteristic task-divisibility of gig-based work, see Lobel, above n 13, at 4, 12; Sundararajan, above n 22, pp 172–173.

35 Moore, M ‘Reconstituting labour market freedom: corporate governance and collective worker counterbalance’ (2014) 43 ILJ 398CrossRefGoogle Scholar at 408–409; Deakin, S and Williamson, F ‘Labour law and economic theory: a reappraisal’ in Collins, H et al. (eds) Legal Regulation of the Employment Relation (Alphen aan den Rijn: Kluwer, 2000) ch 2, pp 42–43Google Scholar; Selznick, P Law, Society and Industrial Justice (New York: Russell Sage Foundation, 1969) p 124Google Scholar.

36 It has been recorded that the number of workers selling their labour in this way in the UK, whether as sole or partial employment, is estimated at 1.3 million (or 4% of all those in employment). See Taylor, above n 2, p 25.

37 Prassl, above n 1, p 72.

38 Haldane, above n 3, at 9; Prassl, above n 1, pp 74–75, citing Finkin, M ‘Beclouded work, beclouded workers in historical perspective’ (2016) 37 Comp Lab L & Pol'y J 603Google Scholar.

39 On the notion of residual risk exposure generally (and with particular regard to its application to certain types of worker), see Kelly, G and Parkinson, J ‘The conceptual foundations of the company: a pluralist approach’ in Gamble, A et al. The Political Economy of the Company (Oxford: Hart Publishing, 2000) ch 6Google Scholar; Blair, MM Ownership and Control: Rethinking Corporate Governance for the Twenty-First Century (Washington, DC: Brookings Institution, 1995)Google Scholar.

40 Prassl, above n 1, p 60.

41 Tomassetti, above n 13, at 70; Sundararajan, above n 22, p 159.

42 However, on the effect of task-oriented and other non-standard employment methods in attenuating (if not removing outright) this notional risk buffer for workers, see Hacker, above n 24, p 66.

43 On this notion generally, see Hacker, above n 24, pp 161–162.

44 Indeed, in the recent Uber employment tribunal case (at first instance), the Tribunal rejected Uber's submission that individual taxi drivers using its app were in themselves each operating as independent small businesses, on the premise that the only way for an Uber driver to ‘grow’ their notional ‘business’ under the operating conditions imposed on them is simply to spend more hours driving. See Aslam v Uber, Case No 2202550/2015 (29 October 2016), para 90.

45 As Prassl explains, ‘[t]he gig-economy business model is designed to divorce the fundamental entrepreneurial trade-off inherent in fully functioning markets: cost and risk are shifted onto workers, whilst the intermediaries get to enjoy the profits’. See Prassl, above n 1, p 86.

46 On this, see section 3 below.

47 See eg the private transport operator Uber's widely-reported policies of prescribing specific types of vehicle that drivers are entitled to use for hires; providing specified routes for drivers to follow for particular hires and also a recommended pricing system that drivers are expected to follow; forcibly logging off its app any driver who declines three successive trips; and deactivating the accounts of drivers whose average passenger ratings fall below a specified threshold. See Uber v Aslam, above n 5.

48 On the significance of firm-specificity (or otherwise) in determining the likelihood of human capital (and other productive assets) being coordinated on a hierarchical/firm as opposed to decentralised/market basis, see Malone et al, above n 15, at 486.

49 In theory there are certain common qualities of task-oriented work that would initially appear conducive to human capital diversification. For instance, task-oriented work is by its nature ordinarily generic or non-firm-specific, in the sense that the productive value of such work is more or less the same irrespective of the particular productive outlet that it is being deployed within. As explained above, task-oriented work is by nature also divisible into specific tasks or assignments (eg taxi journeys, delivery assignments or clerical tasks), which can readily be performed in substantial autonomy from other aspects of the enterprise in which the relevant worker's labour is being deployed. See Prassl, above n 1, p 77; Lobel, above n 13.

50 See HM Government The Experiences of Individuals in the Gig Economy (February 2018) pp 34–36, available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/679987/171107_The_experiences_of_those_in_the_gig_economy.pdf.

51 RSA, above n 29, pp 21, 28 (based on RSA/Ipsos MORI survey evidence).

52 BEIS The Characteristics of those in the Gig Economy: Final Report (February 2018), p 6, available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/687553/The_characteristics_of_those_in_the_gig_economy.pdf.

53 Ibid, pp 19, 21, 25. See also Taylor, above n 2, p 25.

54 This would appear to reaffirm Prassl's claim that ‘[i]ndividual workers are rarely in a good position to hedge against economic risk’. Prassl explains that whereas ‘investors can easily minimize their exposure to risk by diversifying their bets and splitting their money across different assets … it is rather hard to do the same with jobs’. See above n 1, p 131.

55 On this, see above n 51 and accompanying text.

56 This is what one commentator has referred to as the ‘supply-demand collocation’ of many traditional types of work. See Sundararajan, above n 22, p 169.

57 See Haldane, above n 3, at 4.

58 On the notion of granularity of modern work practices generally, see Haldane, above n 3, at 4–5; Sundararajan, above n 22, p 27.

59 It has been recorded that, between 2010 and 2016, the percentage of the UK workforce employed on so-called ‘zero hour’ contracts increased from 0.6% to 3%, with the result that almost one million workers now have this status. See Haldane, above n 3, at 6.

60 However, in certain reported instances of on-demand work an actual formal contractual requirement of ongoing work-availability has been found to exist, such as in the form of a clause to the effect that failure to accept an allocated assignment without good cause will constitute gross misconduct on the relevant worker's part. It has been noted that such provisions create a scenario where the worker is ‘permanently “on call”’ and thus effectively prevented from taking on additional outside work, despite receiving no contractual guarantee of minimum hours from their employer in return. See House of Commons, Business, Innovation and Skills Committee Employment Practices at Sports Direct, Third Report of Session 2016–17 (2016) paras 13–15, at https://publications.parliament.uk/pa/cm201617/cmselect/cmbis/219/219.pdf.

61 See CIPD, above n 4, p 22.

62 The Taylor Review has notably recorded hearing of numerous instances in practice ‘of [worker] flexibility not being reciprocated [by employers], with a requirement to be available for work at very short notice, without any guarantee that work will actually be available’. See above n 2, p 43.

63 Curiously, in a recent TUC survey of UK workers employed on zero-hours contracts, only 21% of respondents cited flexibility to work more than one job as their principal reason for being on such a contract. By far the most common factor cited by respondents in this regard was the simple lack of availability of other forms of work, thereby in effect compelling them to assent to such terms in order to secure any employment at all. See Trades Union Congress Great Jobs with Guaranteed Hours: What do workers really think about ‘flexible’ zero-hours contracts? (December 2017) p 7, available at https://www.tuc.org.uk/sites/default/files/great-jobs-with-guaranteed-hours_0.pdf.

64 This is notwithstanding the fact that the skills base of most on-demand workers will likely not comprise a significant level of ‘hard’ firm-specific human capital, in the sense of knowledge or competencies geared specifically to the unique products or processes of a particular employer firm. Even in the absence of such ‘hard’ attributes, an on-demand worker will still have – for most intents and purposes – a firm-specific relationship with a given employer if their practical capacity to provide work via other productive outlets is substantially constrained. On the notion of worker ‘lock-in’ generally, see Hansmann, H The Ownership of Enterprise (Cambridge, Mass: Harvard University Press, 1996) pp 25–27Google Scholar; Mayer, C Firm Commitment (Oxford: Oxford University Press, 2013) pp 150–152Google Scholar.

65 BEIS, above n 2, p 38.

66 On the inherent counter-factuality of hypothetical bargaining models generally within legal scholarship, and their propensity to establish a normative case for social or regulatory outcomes different to those prevailing under (inferior) real world bargaining conditions, see Charny, D ‘Hypothetical bargains: the normative structure of contract interpretation’ (1991) 89 Michigan L Rev 1403CrossRefGoogle Scholar at 1415–1416; Dworkin, R ‘Why efficiency?’ (1980) 8 Hofstra L Rev 563Google Scholar; Brudney, V ‘Corporate governance, agency costs, and the rhetoric of contract’ (1985) 85 Columbia L Rev 1403CrossRefGoogle Scholar at 1415–1416; Moore, MT ‘Private ordering and public policy: the paradoxical foundations of corporate contractarianism (2014) 34 OJLS 693CrossRefGoogle Scholar at 712.

67 On this, see generally Coase, RH ‘The problem of social cost’ (1960) J L & Econ 1CrossRefGoogle Scholar, esp at 8–15. For a comprehensive and varied collection of scholarly analyses of the so-called ‘Coase Theorem’ in this regard see Posner, RA and Parisi, F (eds) The Coase Theorem Volume I: Origins, Restatements and Extensions (Cheltenham: Edward Elgar, 2013)Google Scholar and The Coase Theorem Volume II: Criticisms and Applications (Cheltenham: Edward Elgar, 2013). See also Campbell, D and Picciotto, S ‘Exploring the interaction between law and economics: the limits of formalism’ (1998) 18 Leg Stud 249CrossRefGoogle Scholar at 251–253.

68 For an influential understanding of efficiency (in a legal context) in terms of ‘reducing the ongoing costs of organizing business through the corporate form’, see Kraakman, R et al. The Anatomy of Corporate Law: A Comparative and Functional Approach (Oxford: Oxford University Press, 3rd edn, 2017) p 2CrossRefGoogle Scholar. See also Hansmann, above n 64, pp 21–22.

69 This term is attributable to EF Fama ‘Agency problems and the theory of the firm’ (1980) 88 JPE 288 at 295.

70 See Jensen, MC and Meckling, W ‘Theory of the firm: managerial behavior, agency costs and ownership structure’ (1976) 3 JFE 305CrossRefGoogle Scholar at 308–310.

71 On the (purported) function of the firm as a quasi-contractual mechanism for mitigating incidences of shirking and other agency costs arising from collective productive ventures, see Alchian, AA and Demsetz, H ‘Production, information costs and economic organization’ (1972) 62 AER 777Google Scholar.

72 As Coase explains, ‘choosing between social arrangements within the context of which individual decisions are made, we have to bear in mind that a change in the existing system which will lead to an improvement in some decisions may well lead to a worsening of others’, and therefore that ‘[i]n devising and choosing between social arrangements we should have regard for the total effect’. See Coase, above n 67, at 44.

73 On this, see Coase, RH ‘The new institutional economics’ (1984) 140 JITE 229Google Scholar at 231.

74 See, inter alia, Coase, ibid; Williamson, OE The Mechanisms of Governance (Oxford: Oxford University Press, 1996) pp 55–57Google Scholar; Simon, HA ‘Theories of decision-making in economics and behavioral science’ (1959) 49 AER 253Google Scholar; Simon, HA ‘A behavioral model of rational choice’ (1955) 69 Q J Econ 99CrossRefGoogle Scholar; Alchian, AA ‘Uncertainty, evolution and economic theory’ (1950) 58 JPE 211CrossRefGoogle Scholar.

75 In particular, it has recently been highlighted how the majority of notional employment ‘agreements’ in the UK today, including 86% of zero-hours work contracts, are not actually negotiated at all but rather take the form of employer-imposed standard form contracts, which prospective workers are presented with on a take-it-or-leave-it basis. See Bales et al, above n 9, at 50–51, citing data published in CIPD, above n 4.

76 On the notion of relational contracting generally, see Macneil, IR ‘Contracts: adjustment of long-term economic relations under classical, neo-classical, and relational contract law’ (1978) 72 Nw UL Rev 854Google Scholar.

77 For an economic argument to this general effect see Williamson, OE and Bercovitz, J ‘The modern corporation as an efficiency instrument: the comparative contracting perspective’ in Kaysen, C (ed) The American Corporation Today: Examining the Questions of Power and Efficiency at the Century's End (Oxford: Oxford University Press, 1996) ch 10Google Scholar.

78 In technical terms, the relevant arrangement will thus be Kaldor-Hicks inefficient. See Hicks, J ‘The foundations of welfare economics’ (1939) 49 EJ 696Google Scholar.

79 By contrast, in this instance the relevant arrangement, while Kaldor-Hicks efficient, will still be Pareto inefficient. On the latter notion, see ibid, at 700–701.

80 On this generally, see Blair, MM and Stout, LA ‘Trust, trustworthiness and the behavioral foundations of corporate law’ (2001) 149 U Pa L Rev 1735CrossRefGoogle Scholar.

81 Ibid, at 1750–1753.

82 Admittedly in the case of task-oriented workers the above analogy with at-risk financial investors might not appear entirely apt, insofar as the characteristic genericity and divisibility of much task-oriented work ordinarily enables gig workers to maintain a less committed (or locked-in) relationship with individual employers than in the case of orthodox employees. However, the functional analogy with the at-risk financial investor is predicated not on the assumption that the flexible worker's human capital is irrevocably committed to the employer firm (it typically is not), but rather on the premise that – albeit for different reasons – both parties are inherently incapable of acquiring effective insurance against residual business risk exposure via orthodox contractual means (in the former party's case due to the contractual unsecurability of their financial investment, and in the latter party's case due to the absence of any ex ante contractual guarantee of their allocated working hours).

83 See eg Hart, O ‘Incomplete contracts and the theory of the firm’ (1988) 4 JL Econ & Org 119Google Scholar; Klein, B et al. ‘Vertical integration, appropriable rents, and the competitive contracting process’ (1978) 21 JL & Econ 297Google Scholar; Williamson, OE Markets and Hierarchies: Analysis and Antitrust Implications (New York: Free Press, 1975)Google Scholar.

84 See Kelly and Parkinson, above n 39, p 120; Williamson, above n 74, pp 183–185.

85 Likewise, the worker who acquires firm-specific human capital that cannot readily be redeployed to another use on the labour market puts themselves in a similar position to the lender in the above example. See Kelly and Parkinson, above n 39, pp 123–127.

86 On this generally, see Hart, O and Moore, J ‘Incomplete contracts and renegotiation’ (1988) 56 Econometrica 755CrossRefGoogle Scholar.

87 See Williamson, above n 74, pp 184–185; Grossman, S and Hart, O ‘The costs and benefits of ownership: a theory of vertical and lateral integration’ (1986) 94 JPE 691CrossRefGoogle Scholar; Fama, EF and Jensen, MC ‘Separation of ownership and control’ (1983) 26 JL & Econ 301Google Scholar at 302–303.

88 On the notion of at-risk human capital generally, see Kelly and Parkinson, above n 39, pp 123–127; Blair, above n 39, pp 249–252; Rajan, RG and Zingales, L ‘Power in a theory of the firm’ (1998) 113 Q J Econ 387CrossRefGoogle Scholar.

89 For this reason, there is cause for scepticism as to the likely effectiveness of Taylor's recommendation for an additional pay premium on the National Living Wage and National Minimum Wage applicable to any hours that an individual is requested to work over and above their contractually guaranteed working hours. See Taylor, above n 2, p 44; HC Committees, above n 7, paras 18–21. Without any supplementary contractual guarantee of reasonable work hours, an hourly wage premium alone is incapable of mitigating a flexible worker's vulnerability to ex post exploitation in the sense outlined above, at least in the absence of additional post-contractual settling-up mechanisms on their part.

90 In this regard, an encouraging recent development has been the emergence of the so-called ‘platform cooperativism’ movement, denoting a growing trend towards the use of worker ownership structures in the gig economy. Although the platform co-op sector is at present still in a relatively fledgling phase of development (and also largely, albeit not wholly, US-specific), the future development of such undertakings on a material scale in the UK is by no means an unrealistic possibility. See RSA, above n 29, pp 53–54; Sundararajan, above n 22, pp 169–199; Scholz, T and Schneider, N (eds) Ours to Hack and to Own: The Rise of Platform Cooperativism, a New Vision for the Future of Work and a Fairer Internet (New York: OR Books, 2017)CrossRefGoogle Scholar.

91 On this generally, see Hansmann, above n 64, pp 105–108; and, in the specific context of the gig (or ‘sharing’) economy, see Sundararajan, above n 22, pp 199–200.

92 While a statutory ICE framework exists in the UK, there is no default employer obligation to provide ICE. Rather, initiation of ICE in any instance is (at the time of writing) conditional on the formal written request of at least 10% of employees of the relevant undertaking, which in any event must employee at least 50 persons. See Employment Relations Act 1994, s 42; Information and Consultation of Employees Regulations (ICER) 2004, SI 2004/3426, regs 3(1)(a), 7(2), Sch 1. Notably, both the Taylor Review and subsequent House of Commons Committees’ Report into modern employment practices have called for reduction of the statutory triggering threshold from 10% to 2% of a relevant undertaking's workforce. The latter report further advocates that this figure should include those workers not classed as full ‘employees’ in the formal statutory sense. See Taylor, above n 2, p 20; HC Committees, above n 7, paras 44–45. Lamentably, the UK government has since expressly refrained from committing itself to reducing the statutory triggering threshold for initiating workplace ICE or to extending the ICE framework to non-standard workers, pending further consultation on whether there exists a sufficient ‘appetite’ for such reforms. See BEIS, above n 2, p 44.

93 On this issue Taylor curiously opted to refrain from further enquiry, stating only that ‘[w]e do not have a strong view on whether workers should be directly represented on company boards, as they are in some other countries, or whether other solutions would work better in a British context’. In a similarly cautious vein, the House of Commons BEIS Committee has opined that, while ‘we encourage more companies to appoint workers on boards … [w]e are not minded to recommend the compulsory requirement for companies over a certain size to include a worker on board’. See Taylor, above n 2, p 52; BEIS Committee ‘Corporate governance’, Third Report of Session 2016–17, paras 146–147, available at https://publications.parliament.uk/pa/cm201617/cmselect/cmbeis/702/702.pdf.

94 For a critical appraisal of worker participation mechanisms in corporate governance generally, see Hansmann, above n 64, pp 105–112.

95 Notably, the most recent edition of the UK Corporate Governance Code expressly recommends that Premium Listed establish a method for gathering the views of their workforce whether in the form of: (i) a director appointed from the workforce, (ii) a formal workforce advisory panel, or (iii) a designated non-executive director in this regard. The Code further recommends that directors’ annual reports should explain how the board has engaged with the company's workforce and other stakeholders, and how such interests have influenced the board's decision-making. See FRC, UK Corporate Governance Code (July 2018) Provision 5, available at https://www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-corporate-governance-code.

96 For a similar argument to this effect in respect of systematic adverse selection by shareholders of effective corporate governance protections, and the ensuing normative case for mandatory state regulation in this regard, see Easterbrook, FE and Fischel, DR ‘The corporate contract’ (1989) 89 Colum L Rev 1416CrossRefGoogle Scholar at 1433–1436; Gordon, JN ‘The mandatory structure of corporate law’ (1989) 89 Colum L Rev 1549CrossRefGoogle Scholar at 1554. On this see also Sunstein, CR ‘Legal interference with private preferences’ (1986) 53 U Chi L Rev 1129CrossRefGoogle Scholar; Moore, M Corporate Governance in the Shadow of the State (Oxford: Hart, 2013) pp 238–242Google Scholar.

97 R Syal ‘Employees to be handed stake in firms under Labour plan’ (The Guardian, 24 September 2018).

98 A Cowburn ‘Workers to make up one third of company board members under Labour, Corbyn vows’ (The Independent, 23 September 2018). See also M Lawrence Corporate Governance Reform: Turning Business towards Long-Term Success (IPPR Discussion Paper, July 2017) p 3.

99 See Labour Party Manifesto: Creating an Economy that Works for All (Widening Ownership of our Economy) (May 2017), available at https://labour.org.uk/manifesto/creating-economy-works/#first.

100 See above n 5.

101 S Butler ‘Uber loses appeal over driver employment rights’ (The Guardian, 20 December 2018).

102 O Bowcott ‘Gig economy: heating engineer wins claim against Pimlico Plumbers’ (The Guardian, 13 June 2018).

103 See above n 2.

104 See above n 7.

105 See above n 8.

106 R Syal and H Stewart ‘Workers get new rights in overhaul but zero-hours contracts remain’ (The Guardian, 17 December 2018).

107 See above n 98.

108 On the traditional status of employment and corporate/company law as mutually autonomous academic domains with limited reciprocal crossover of ideas and insights see Carse, A and Njoya, W ‘Labour law as the law of the business enterprise’ in Bogg, A et al. (eds) The Autonomy of Labour Law (Oxford: Hart Publishing, 2015)Google Scholar ch 13 at p 313; Lord Wedderburn of Charlton The Future of Company Law: Fat Cats, Corporate Governance and Workers (Liverpool: IER, 2004) p 41Google Scholar.

109 Moore, M ‘Bridging the gap between labour law and company law’ (2015) 44 ILJ 425CrossRefGoogle Scholar.

110 As Coase has observed, ‘[t]he cost of exercising a right (or using a factor of production) is always the loss which is suffered elsewhere in consequence of the exercise of that right’, such that ‘we have to bear in mind that a change in the existing system which will lead to an improvement in some decisions may well lead to a worsening of others’. Above n 67, at 44.