In a landmark decision, an employment tribunal has held that a group of Uber drivers are not ‘self-employed’ contractors (as asserted by Uber), but are in fact ‘workers’. They are therefore entitled to various rights under employment legislation which are not enjoyed by self-employed contractors.
Though this case was brought by only two Uber drivers (on behalf of a group of 19), the decision is significant because of its implications for Uber’s 40,000 drivers and other companies that also claim that those working for them are contractors.
‘Uber’ is a mobile phone application that allows its users to book trips with drivers who are also signed up with the application.
Led by two Uber drivers (James Farrar and Yaseen Aslam), the claimants submitted that their working relationship with Uber fell within the definition of ‘worker’ under the Employment Rights Act 1996. Consequently they should be entitled to certain rights such as the national minimum wage and paid annual leave.
Uber’s case was essentially that the claimants were not entitled to these rights as they always carried out their work for Uber as self-employed contractors who do not benefit from the right to the national minimum wage or paid leave. They argued that they were a technology firm not a transport business, and that the drivers are under no obligation to carry out work for them. The liberty to choose if and when to work is a freedom which Uber submitted could not be compatible with any form of employment.
In a scathing judgement, the tribunal held in favour of the claimants. They agreed that the claimants were in fact workers as opposed to self-employed contractors, stating that ‘the notion that Uber…is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds fairly ridiculous.’ The tribunal was also critical of the idea that Uber merely assisted drivers grow their ‘business’ as in their words ‘no driver is in a position to do anything of the kind, unless growing his business simply means spending more hours at the wheel.’
As a consequence the claimants, as workers, will be entitled to the right to the national minimum wage and to paid annual leave. They will also be entitled to rest breaks and the protection of the ‘whistleblowing’ legislation.
It is worth highlighting that the claimants have been deemed to be ‘workers’ and not ‘employees.’ Therefore they do not enjoy additional rights that protect employees such as the ability to claim unfair dismissal and the right to statutory redundancy pay. The financial implications of the judgement to Uber are nonetheless still significant. Subject to the decision of any appeal, Uber may have to give drivers back-pay for unpaid benefits in the UK should claims be brought by other drivers, and it may have to pick up the future cost of those benefits. Though they might not necessarily be successful, ‘contractors’ with other companies could now also be encouraged to bring similar claims.
Uber has however already confirmed it is appealing the decision. In a statement to subscribers Uber stated that ’a recent poll of 1,000 drivers who use our app found that the overwhelming majority prefer being self-employed and joined Uber precisely because they want to be their own boss.’
If you have any queries about the employment status of any individuals who provide services to your company, please do not hesitate to contact us.