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Uber Tribunal Decision

An Employment Tribunal has ruled that two drivers who provide services to gig economy firm Uber are 'workers' within the meaning of the Employment Rights Act 1996.

This means they will be entitled to a number of employment rights (but not those accruing to 'employees' - which this case was not about).  Amongst other rights, they will be entitled to:-

•           5.6 weeks' paid annual leave each year

•           a maximum 48 hour average working week, and rest breaks

•           the national minimum wage (and the national living wage)

•           protection of the whistleblowing legislation.

As they are not employees, they will not be entitled to:-

•           the ability to claim unfair dismissal

•           the right to a statutory redundancy payment

•           the benefit of the implied term of trust and confidence

•           the protection of TUPE, if Uber sells its business

The ruling could affect around 30,000 Uber drivers in London and significantly raise the company’s costs there. Uber, which argues it is a technology platform that matches riders with drivers, has relied on a contractor workforce of motorists who take on their own expenses like insurance, fuel and car upkeep.

Of course, it is virtually certain that this tribunal decision will be appealed up and up, potentially to the Supreme Court. 

“This is a preliminary hearing, and not a final determination on the question of whether the claimants have or have not received the national minimum wage,” Uber said in a statement. “The vast majority of people who have chosen to drive with the Uber app have done so in order to be their own boss and choose when and where they drive.”

Contractor status is crucial for Uber and other so-called on-demand companies that rely on a pool of freelance workers to drive taxis, clean houses, fetch food etc. Those firms say they would likely have to raise prices and couldn’t depend on workers who may be willing to work just a few hours a week.

Although this decision is fact-specific, and based on Uber's business model, it increases the chance of other 'gig economy' companies facing claims that their 'contractors' have worker status. 

This bulletin is for general guidance purposes only and should not be used for any other purpose.

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