Uber – The Worker v Self Employed Headache Continues
The decision last year by an employment tribunal to classify gig economy firm Uber’s drivers as workers caused quite a headache. Multiple cases on “status” have followed, causing reactions across the employment market. This week, Uber went to appeal with the EAT considering their case in a two day hearing.
In the current employment climate, there are an increasing number of businesses who are operating within the gig economy and who work on the basis that they are engaging self-employed individuals. The employment status of these individuals can be difficult to ascertain, with the Courts scrutinising whether individuals are truly self-employed.
In the Uber case last year, an employment tribunal held that Uber drivers are classified as “workers” under the Employment Rights Act 1996 and not self-employed as Uber had argued. Uber’s stance was that they had created a system where their customers use a smartphone app to order a taxi and pay their fare and that accordingly, taxi drivers in this arrangement were self-employed which was demonstrated in all contractual arrangements. The tribunal disagreed, confirming that the actual reality of the arrangement and the amount of control exerted over the drivers by Uber meant that the drivers were engaged as workers.
The ruling meant that Uber drivers are entitled to certain employment rights that aren’t available to self-employed workers such as paid holidays, the national minimum wage, a maximum of 48 hour working weeks with rest breaks and protection under whistleblowing legislation.
Uber confirmed that they would be appealing the case which was heard this week.
Developments this week
On Monday, another “status” case was heard in the employment tribunal involving Addison Lee, another London based taxi firm. In line with recent trends, the tribunal ruled that Addison Lee’s drivers should also be classified as “workers” and not self-employed individuals as Addison Lee had argued. Although being first instance, this decision is not binding on other tribunals, it couldn’t have gone unnoticed for Uber ahead of their own appeal hearing.
In the Addison Lee case, the Judge confirmed that the suggestion that Addison Lee drivers were independent contractors “defied evidential gravity” when individuals must comply with a dress code, pay fixed fees for hiring an Addison Lee car and were unable to refuse jobs once logged on to their booking system. This case serves to remind us all that, as with other cases around status, the tribunal will examine whether the reality of arrangements marry up with the contractual arrangements between parties.
The outcome of the Uber appeal is not yet known, but whether they are successful or not, it should make interesting reading particularly for those who adopt business models centred on flexibility through the use of a host of independent contractors.
Watch further developments carefully
Given the amount of businesses who do operate on the basis of self-employed engagements and as the recent case law suggests that these individuals could potentially be workers, it is worth having a look at your own business arrangements. In particular, where independent contractors are being used, it is worth checking whether the contractual documents and the reality of the arrangement are consistent with each other. One thing is for certain, the Uber appeal is only another in a continuous stream of case law, and potential future legislative changes, on worker status.
This bulletin is for general guidance purposes only and should not be used for any other purpose.
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