What’s all the fuss about Uber?

What’s all the fuss about Uber?

#selfemployed #employed #workersrights #gigeconomy #employee #employer #contractor

Uber has long been the subject of speculation over its terms of employment and the alleged financial exploitation of its drivers. Uber drivers have not previously been considered by Uber to be entitled to holiday pay or a minimum wage due to Uber classifying them as self-employed users of its service. Uber has always argued that it is simply a “booking agent” that charges a service fee to independent drivers to assist them in finding passengers.

Last week the UK Supreme Court firmly disagreed with Uber on this, ruling that Uber drivers are “workers” and are not self-employed. This, they said, is because Uber exercises too much control over its drivers to be able to claim it is only a booking service. Supreme Court Justice, Lord Leggatt noted that Uber sets the price for every ride, dictates exactly what commission drivers receive as payment and that these terms are imposed on its drivers, who have no choice but to accept them. Uber also has the power to impose penalties on drivers if they refuse a ride, monitors driver performance and prevents drivers from communicating with potential passengers outside of the Uber system. Lord Leggatt said that this level of control by Uber and the inability of drivers to opt out, manage their own workload or pricing, or improve their commercial position by showing any entrepreneurship meant that the drivers could not be class as self-employed.

“Workers” or “employees”?

The Supreme Court held that while it did not consider Uber drivers to be self-employed, as Uber exercises too much control over the way they work, it also did not classify them as employees.  This is because Uber drivers can work as often or as infrequently as they want to, with no fixed hours or obligation to be available at certain times or at all. However, the Court did consider Uber drivers to be “workers”. This means that they should be subject to the UK’s minimum wage laws and are entitled to holiday pay. However, unlike UK employees, “workers” are not entitled to notice pay or parental leave.

What happens next?

The two drivers who brought the case against Uber back in 2016 are now considered to have been workers from the time they logged on to the Uber driver app until they logged off, and not just while they were carrying a fare paying passenger. However, Uber has already made it clear that it does not believe the ruling applies to all current and future staff – only those who used the Uber driver app in 2016. This may be wishful thinking on the part of Uber, and we will soon find out, with thousands of similar employment tribunal cases brought by Uber drivers waiting in the wings to test the precedent set by this test case. The rulings in these many individual tribunal cases will tell us what the trickle down effect will be, and whether the Employment Tribunal will interpret the ruling in the same way as Uber, or more strictly to cover its entire workforce.

Implications for the Gig Economy

The Supreme Court ruling could have a huge financial impact on Uber’s bottom line and mean that the company will now have to backpay holiday and wage entitlements to its drivers, and pay them such entitlements in the future. These increased costs may cause Uber to increase its prices. Just how much Uber will have to pay will depend on the outcome of the individual cases currently before the employment tribunal. People who work for other similar companies may also now consider whether to bring a claim for breach of the UK’s strict employment laws if they have missed out on receiving holiday pay or minimum wage under the terms of their contract. Around 5 million people are estimated to work in the UK gig economy and this ruling could lead to further litigation from others who believe they should be entitled to stronger employment rights.

What to do if you think you may be affected by this?

I am a worker:

Call us immediately for a consultation as you only have 3 months from the date your work issue arises to make a claim to the employment tribunal. We will be happy to talk through whether we think you may have a claim and, if so, can assist you in doing so. Contact our Dispute Resolution & Employment Team today on 01905 900919

I am an employer:

This case illustrates the reality that just because you call a worker a “self-employed contractor” does not necessarily mean that that is what they are. Careful drafting of your contracts and consideration of the reality of your situation is advised – how much control do you really exert over those “contractors”? For a full contract review, or for advice on how to protect yourself as an employer, call our Corporate Employment Team on 01905 900919.