The Employment Tribunal has determined that Uber Drivers are Workers within the definition of the Employment Rights Act 1996 (ERA) and as such are entitled to limited rights including the National Minimum Wage and 5.6 weeks paid holiday.
The judge considered the arrangement between Uber and its drivers. Uber’s case was that it is simply a technology platform which puts drivers in touch with passengers and there was no employment relationship between itself and the drivers. The judge asserted that through “jargon” Uber had attempted to distort the reality, which was as follows:
- Uber interviews and recruits drivers;
- Uber controls key information regarding the identity and destination of the passenger that is unknown to the driver;
- Uber requires drivers to accept trips and not cancel them otherwise they will be penalized;
- Uber imposes conditions on drivers such as the specification of the car;
- Uber fixes the fares;
- Uber controls the driver in performance of their duties;
- The rating system is akin to performance management/disciplinary procedure;
- Uber accepts risk of loss; and
- Uber handles complaints.
As such the drivers did not have independence and autonomy but Uber had sufficient control which brought the drivers within the remit of workers.
Uber have, unsurprisingly, said that they will appeal the decision.
This decision is a useful reminder that tribunals will consider the reality of the relationship between the parties as well as any documents setting out the terms. If the contractual terms do not correspond to the reality of the situation then a tribunal may ignore any contractual terms.
Although this decision is not binding it indicates a change in attitude towards the status of individuals who are employed in the ‘gig economy’ (freelancing). This correlates with the position of the government who has set up an independent review into modern employment practices which will consider:
- Whether workers lose out via new business practices;
- Whether the growth in non-standard employment undermines the minimum wage, sick pay and other rights; and
- Whether definitions of employment status need to be updated.
In light of this decision and the review we can expect many more claims to be brought in the tribunal and a potential change to the legislation. If it is found that individuals have been wrongly classified as self-employed, companies may find themselves liable for tax, national insurance contributions, pension contributions, holiday pay and interest in respect of those individuals.
For further information on any of the above and the impact on you please contact the Devonshires Employment Team.