Employment status in the UK is currently under the spotlight as two Uber drivers have successfully argued that they are in fact workers and are accordingly entitled to a number of employment rights in the test case of Aslam and others v Uber BV and others.
Uber is the creator of the app for connecting taxi drivers with passengers in a number of city locations throughout the world.
The London Central Employment Tribunal has held that drivers engaged by Uber are workers, rather than self-employed contractors.
The London Central Employment Tribunal was less than impressed with Uber's assertion that it is a technology platform opposed to a transport provider (mirroring a finding of the North California District Court in a similar case in the United States).
A number of key factors contributed to the tribunal's finding that the drivers are workers, rather than self-employed contractors, including that Uber interviews and recruits drivers, controls the routes for each trip, fixes the fare for each trip, holds important passenger information, takes payment from passengers', handles complaints against drivers, and accepts the risk of loss. Given the level of control exercised by Uber over its drivers, this decision does not come as a surprise.
The emergence of the ‘gig economy’ - in which temporary positions are common and greater reliance is placed on short-term freelance contractors - is creating considerable debate across the UK. Critics point to exploitative practices and insecurity for workers, whilst champions of the gig economy point to its flexibility and fruitful opportunities. Theresa May, PM, has instructed a review of modern employment practices with the expectation that it will include zero hour contracts and the so called gig economy. The outcome of the review is expected in Spring 2017, with the potential for developments to follow.
This decision will be greatly disappointing for Uber who have modelled their business on the concept that the drivers are self-employed 'driving partners'.
Organisations who rely on business models similar to that operated by Uber, should be alert to this decision and the potential for litigation of their own. Whilst the case is fact specific, it provides a strong indication that similar claims will follow.
Those who do fall into the category of 'worker' are entitled to a number of rights including national minimum wage, paid annual leave and whistleblowing protection. Whilst this may be good news for the Uber drivers and others within the gig economy, this may potentially push up costs for businesses currently reliant on so called self-employed contractors.
Uber have confirmed that they are appealing the decision so this case will likely occupy judicial minds for a considerable period of time, potentially all the way to the Supreme Court.
In the meantime, Uber drivers in the UK, and others within the gig economy, may seek to bring their own claim on the assumption that they are a worker, with the claims potentially put on hold pending any appeal. This could prove to be a litigation headache for Uber who has approximately 40,000 drivers in the UK, and similar gig economy organisations.
Organisations often look at imaginative contractual arrangements and working practices to circumvent employment rights and we expect that the balancing act on employment status will be a continued focus into and throughout 2017. That is particularly so when the statutory definitions of ‘employee’ and ‘worker’ may be considered not to have kept pace with the flexible working models that many organisations now use.
TLT will continue to update on developments as they arise.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at November 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions.