The Supreme Court has today ruled that Uber drivers are workers and not self-employed ending a lengthy legal case.
The case was originally brought in the Employment Tribunal in 2016 by two former Uber drivers, James Farrar and Yaseen Alslam, who won their claim against the ride hailing smartphone app, Uber. Uber appealed the decision with the Employment Appeal Tribunal upholding the ruling. Uber then took the case to the High Court with the ruling upheld again. The final appeal by Uber was with the Supreme Court which was found to be unsuccessful after today’s ruling.
The significance of the decision is that by being deemed “workers”, Uber drivers are not self-employed as Uber had argued, entitling drivers to basic rights which include minimum wage (including backpay for minimum wage) and minimum wage for the full working day and not when just when they have a rider in their cab. Drivers will also have whistleblowing rights and be entitled to claim holiday pay.
The Court considered several elements in its judgment when determining whether the drivers had “worker” status:
Uber set the fare for each job meaning Uber dictated how much the drivers could earn and drivers were not able to set their own fare as they would if genuinely self-employed
Uber set the contract terms for use of the service and drivers had no input
Requests for rides is constrained by Uber who can penalise drivers for not accepting rides
Uber monitors drivers’ performance through the star rating via an app and has the ability to apply penalties or terminate the contract if performance is poor
Looking at these and other factors, the Supreme Court determined that drivers were in a position of subordination and dependency to Uber and are workers.
A number of key employment rights (such as unfair dismissal, maternity leave and redundancy pay) are only provided to individuals who are regarded in law as ’employees’, i.e. who work under a contract of employment and will therefore not apply to Uber drivers.
This ruling is likely to have a significant impact on organisations in the gig economy with many claims likely to be brought from individuals wishing to enforce rights given to workers. Gig economy businesses will be deciding whether to accept the extra costs connected with engaging workers or reconsidering their business structure if they are to engage with individuals who are truly self-employed.
It is clear that organisations cannot pick the status of individuals and rely on contracts which state what they believe the status of individuals to be. The Court will look beyond what any written documents state and examine the reality of the relationship.
Today’s judgment points out that the general purpose invoked by the Claimants in this case is to protect vulnerable workers from being paid too little for the work they do, required to work excessive hours or subjected to other forms of unfair treatment such as being victimised for whistleblowing.
If you require legal advice on employment contacts, establishing your employment status, or making a claim in the Employment Tribunal please contact Farleys employment law team on 0845 287 0939 or submit your enquiry online.