What next for Uber and employers in the gig economy?

Beverley Sutherland investigates the implications of the Employment Appeal Tribunal’s decision that the taxi firm’s drivers are workers

In the past 12 months, there have been a raft of cases grappling with the status of those who are said by their bosses to be ‘self employed’, and therefore not entitled to any employment rights. The courts and tribunals have had to decide if they were genuinely self-employed as plumbers, drivers and delivery cyclists, or whether they fall into the hybrid legal status of ‘worker’.

The law defines someone as a worker if they are contracted to provide the service personally but they are not in business on their own account. While workers do not have the same employment rights as employees, they have some important entitlements, such as the right to paid holidays, the minimum wage and the protection of the Working Time Regulations.

In February, the Court of Appeal confirmed that plumbers who had opted not to become employees of Pimlico Plumbers were nevertheless ‘workers’ entitled to these basic rights. The level of control exercised by Pimlico over these plumbers was such that they could not, on the facts, be said to be working for themselves and providing services to Pimlico as a client or customer, rather than providing those services on behalf of Pimlico.

The Uber case

In October 2016, an employment tribunal decided that Uber drivers were also ‘workers’ of Uber London and were therefore entitled to paid holiday leave, the national minimum wage and the protection of the Working Time Regulations.

Uber appealed, arguing that it operated in the same way as a traditional minicab operation but on a bigger scale and using modern technology in the form of the Uber phone app. It argued that the drivers were self-employed and Uber simply provided opportunities for the drivers to connect with passengers via its online app, and that the status of the drivers as self-employed was clearly reflected in the contractual documentation between them and another group company, Uber BV.

On 10 November, the Employment Appeal Tribunal (EAT) dismissed Uber’s appeal. Although the contracts described the drivers as self-employed, this did not reflect the reality and it was important to look at what really happened on the ground, rather than what the contract said. The reality was that the drivers were fully integrated into the Uber London model and had very little freedom or flexibility in the way they worked.

The EAT said that when carrying out its assessment, it was entitled to look at the whole factual matrix and in considering its findings it was important to look at the judgment as a whole – and in doing so it was clear there was nothing inconsistent or perverse in its reasoning.

The implications

The writing appears to be on the wall for gig economy employers that attempt to bypass basic workers’ rights while benefitting from the flexibility and – in many cases – desperation of those working in this sector. Although Matthew Taylor, in his report into modern working practices in July, suggested a renaming of workers as ‘dependent contractors’, with less emphasis on personal service and more emphasis on control to reflect modern working, at the moment this is simply a recommendation.

Despite the recent Central Arbitration Committee ruling that Deliveroo couriers are not workers, any business using people it currently calls ‘self employed’ needs to take advice on their own factual situations and whether it is likely that, against the background of the decisions coming through, a tribunal will consider them to be workers.

While the 40,000 Uber drivers will be celebrating, an appeal to the Court of Appeal is almost certain, with some suggestion that Uber and Pimlico will join forces and go straight to the Supreme Court.

Beverley Sunderland is managing director of Crossland Employment Solicitors



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