The Supreme Court has ruled that Uber drivers should be classed as “workers”, allowing them fair access to rights such as the minimum wage, statutory holiday pay and rest breaks.
Ashleigh Evans, trainee solicitor, explains the implications of the ruling in this landmark case.
In a long-running legal battle, yesterday Uber once again appealed the decision made in 2016 by the Employment Appeal Tribunal (EAT), claiming that Uber drivers are independent, self-employed contractors.
The Supreme Court rejected the global taxi company’s appeal, ruling that Uber drivers are workers of the company and are therefore entitled to be paid at least the national minimum wage and should receive several employment rights, such as statutory sick and holiday pay from their employer.
Uber is a technology company that connects drivers and passengers in their area in 65 countries worldwide through an application on both parties’ smartphones. App users request to be picked up from an allocated spot and then provide an online banking payment through their phone to Uber for the journey once they have arrived at their chosen destination. Uber then pays the drivers for their service.
Former Uber drivers James Farrar and Yaseen Aslam brought the case to the EAT in 2016, claiming that Uber is acting unlawfully in its failure to recognise their status as workers and refusal to apply employment rights and protection offered to workers.
The case was then referred to the Court of Appeal in 2019, whereby the Court upheld the decision of the EAT. Despite the Court of Appeal’s ruling, Uber was granted leave to appeal, which is why this case has finally been determined by the UK Supreme Court in its third round of legal proceedings.
What is the definition of a worker and self-employed person?
The distinction between the two are not always clear, however self-employed people are quite literally employed by themselves, and therefore they have the flexibility to decide how and when they will provide their services to their customers.
Although this status comes with its advantages, a major disadvantage means that those who are self-employed do not have any protection under employment legislation.
Since the company’s incorporation, Uber has maintained that its drivers are an independent, self-employed contractor rather than an employee. Their main argument, in this case, was that their drivers are free to accept and reject work at any time of the day of their choosing. The drivers, therefore, are in control of their earnings and working hours.
Alternatively, a worker is defined as an individual who has entered into or works under (a) a contract of employment or (b) any other contract, whether express or implied, created verbally or in writing. It is, therefore a concept that can encompass a wide range of working relationships. Notably, one of the most significant advantages is that a worker has several employment rights.
Key points from the case
The arguments put forward by Uber’s lawyers carefully dissected the distinction between the concept of being a worker or self-employed. The Supreme Court rejected these arguments, though, for the following reasons:
1. Uber sets the fare for the drivers, which means that Uber dictate exactly how much the drivers could earn.
2. Uber monitors the driver’s service through a star rating mechanism and, therefore, can terminate the relationship with the driver if, after repeated warnings, this does not improve.
3. There is no contract formed between the drivers and their passengers, only between Uber and the passengers.
Ultimately, the Court found that the drivers are workers as they work within their licenced area, are signed into the Uber app, and are ready to accept bookings on behalf of Uber.
Workers are entitled to receive employment rights, such as the national minimum wage and the right to rest breaks, statutory sick pay, holiday rights and the right not to be discriminated against. This is important, as those rights do not apply to self-employed people who are deemed to be responsible for managing their own time and finances.
This ruling is a landmark case that could have huge implications for Uber, as they are likely to be required to pay huge sums in compensation to over 60,000 UK Uber drivers that should be classed as workers.
Leigh Day, the law firm representing the drivers on behalf of GMB, has stated that each of these drivers could each be entitled to an average of £12,000 in compensation.
Companies with similar business structures will now have to quickly deal with each of the points addressed by the Supreme Court, and ensure that their business model is appropriate for its relationship with workers or self-employed persons.
If you require advice in respect of your business model or your working status, please do not hesitate to get in touch with our corporate department at email@example.com.
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