NEWS
An Employment Tribunal has ruled that two ‘self-employed’ drivers for the company Uber are 'workers'.
IMPLICATIONS
This was a case that received international attention as it sought to clarify the employment status of individuals working within the “gig economy”.
The fact the drivers won this particular case does not necessarily mean that other individuals working within similar business models will achieve the same status. It is only an employment tribunal decision so not binding on other tribunals. Future cases will hinge on the specific terms and conditions agreed between the individual and the company as well as how the relationship operates in practice.
DETAILS
For there to be worker status, a contract is needed, under which an individual undertakes to do work personally for an employer who must not be a customer of any business operated by the individual. The tribunal found that the drivers had established these elements and were entitled to worker rights.
The drivers brought claims for the basic worker rights of entitlement to the national minimum wage, paid annual leave and the protection of whistleblowing legislation.
Uber, in building its defence, denied that its drivers were workers. It claimed that it was not a taxi company and did not employ any drivers. Rather, Uber was merely an app which connected drivers with customers; they did not work for Uber but for themselves in a self-employed capacity. This idea of independent self-employed drivers was rejected by the tribunal. It used the following factors, among others, in forming its decision:
- Uber asserts the power to accept or decline bookings;
- Uber sets a route for each trip and the driver may face fare deductions if they depart from it;
- Uber fixes the fare and the driver cannot agree a higher sum with the passenger;
- Uber has a rating system for its drivers, which is effectively a performance management/disciplinary procedure;
- Uber handles refunds for passengers, sometimes without involving the driver;
- Uber accepts the risk of loss e.g. where a passenger soils a vehicle or for fraud. If the drivers were genuinely self-employed, they would deal with such costs;
- Uber handles passenger complaints; and • Uber reserves the right unilaterally to amend drivers’ terms.
The tribunal accordingly dismissed the notion that ‘Uber in London is mosaic of 30,000 small businesses linked by a common platform’ as ‘faintly ridiculous’. It held that there was a stricter employer/worker relationship in operation.
This is the first time Uber has faced such a claim and the reasoning behind the decision could apply to all Uber drivers. The potential financial implications for Uber, which operates in over 60 countries worldwide, could be significant as other drivers move to claim the same rights.
Uber has since said that it will appeal the decision, so any related claims will likely be put on hold whilst we await a final ruling.
COMMENT
Hannah Lee comments: “It should be noted that this decision is specific to Uber and its business model. It does not pave the way for worker rights across the gig economy, but it does increase the chance of companies with similar business models facing claims for worker rights. Employers that rely on a freelance workforce should watch this space as Uber have said they will appeal the decision.”
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