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22nd February 2021

Last Friday, the UK Supreme Court published the highly anticipated judgment in the case of Uber BV v Aslam and Others. 

The claims originally brought by Mr Aslam and others in 2016 were in relation to Uber’s failure to pay the national minimum wage and failure to provide paid leave which are both fundamental workers’ rights. The case has been rumbling on since 2016 and most recently, Uber appealed the Court of Appeal’s decision which determined that the Claimants were workers, taking the dispute all the way to the UK Supreme Court.

The UK Supreme Court decision 

The UK Supreme Court ruled, unanimously, that the drivers were workers and not self-employed sub-contractors. The judgment set out five main reasons for its decision:

  1. Uber sets and fixes the remuneration paid to drivers for the work they do, and the drivers have no say in it. In other words, the drivers cannot set their own prices which they could do if they were genuinely self-employed.
  2. Uber sets the terms and conditions of using its service which drivers are required to accept. Again, the drivers have no say in these contractual terms.
  3. Once drivers are logged on to the Uber app, their freedom to choose which requests to accept is constrained and they can face penalties for not accepting jobs. Uber can choose to temporarily restrict a driver’s access to the app if they fail to meet their requirements.
  4. Drivers are subject to a “rating” system from passengers. If they fall below a specified rating, drivers face warnings and potentially the termination of their contract with Uber.
  5. Uber actively restricts communication between passengers and drivers to prevent them from creating any agreements outside the scope of the individual ride with Uber.

Lord Leggatt emphasised the substantial control Uber has over its drivers, referring to the relationship between the two as one of “subordination and dependency”. This level of control restricted the drivers’ ability to increase their income using “professional or entrepreneurial skill” and the predominant way for them to boost their earnings was by undertaking more work for Uber.

The other key point of clarification from the judgment is that for the purposes of “working time,” the drivers were deemed to be working when they are logged on to the Uber app, ready and willing to accept work and not just for the duration of individual passenger journeys.

What are the implications? 

Employment status can be broken down into three main categories:

  1. Employees: employed to personally undertake work under a contract of employment, with a wide range of employment rights (including redundancy and unfair dismissal after 2 years’ service) and an entitlement to benefits (e.g., holiday pay, sick pay, and paid leave.
  2. Workers: engaged under a ‘contract for services’, have few obligations to undertake work and can work on an ad hoc basis (including zero-hour contracts). Workers have some rights including payment of the national minimum wage, holiday pay and paid leave.
  3. Self-employed: you are responsible for how / when you work, you can send others to do the work for you and you send invoices for providing services to your client. Self-employed individuals do not have rights to holiday pay or pay for sick leave. Self-employed individuals can be engaged as contractors.

As ‘workers’, the drivers involved in this case will now be entitled to holiday pay, the national minimum wage, sick pay and are entitled to be auto-enrolled into a pension scheme. These benefits will need to be addressed retrospectively which will be a significant undertaking for Uber to tackle. It is inevitable that, as a result of this decision, there will be a class action brought against Uber by other drivers in the near future.

It is clear, moving forward, Uber will need to consider whether to accept the extra cost associated with their drivers being workers and maintain a consistent approach to the delivery of its service or remodel their business, to exercise less control over drivers to enable them to work as genuinely self-employed individuals.

In the modern job market where people may work flexibly for companies on a job-by-job basis, also known as the “gig economy”, the ramifications of this decision will be massive and far reaching. Other technology-based platforms operating in a similar fashion to Uber or new start-ups wanting to “control” their workers, will need to carefully consider the nature of their contractual relationship or risk the same repercussions Uber is now facing.

In light of this decision, employers should act cautiously and carefully consider the reality of their contractual relationship with individuals before engaging them to ensure they are properly defined.

You can read the full judgment online here: https://www.supremecourt.uk/cases/docs/uksc-2019-0029-judgment.pdf

If you would like further information or any other employment law advice, please contact us on 0161 437 0013 or by email to emma.hough@lawbydesign.co.uk

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