4th Nov 2016

Uber drivers are workers, not self-employed contractors

Uber drivers are workers, not self-employed contractors – that’s what an employment tribunal has held in one of the most eagerly awaited employment decisions of 2016 (Aslam & Farrar v Uber BV and others).  As a result, Uber drivers are entitled to receive basic workers’ rights such as the national minimum wage, paid holiday and rest breaks. 

Employment Tribunal

Uber, which is estimated to have around 40,000 drivers across the UK, provides a smartphone app and platform that allows customers to contact drivers directly for private car hire.  The company engages its drivers with the tag line “Work for yourself. Drive when you want, make the money you need”. 

Uber is estimated to have around 40,000 drivers across the UK

In this high profile case, Uber argued that it was a technology platform not a transport business, and that its drivers were independent self-employed contractors, who could choose where and when they worked.  The company maintained that the drivers were working directly for the customer and their app merely facilitated that work - they were not providing work for Uber as such under a contract. 

However, this was not how the tribunal viewed the reality of the relationship. 

In a scathing judgement against Uber, the tribunal found that any driver who has the app switched on, is within the territory in which he or she is authorised to work, and is able and willing to accept assignments is, for as long as those conditions are satisfied, working for Uber under a worker contract. 

Tribunal Findings

The tribunal referred to a number of factors that supported its decision that the drivers are “workers” within the meaning of section 230(3)(b) of the Employment Rights Act 1996 and are not self-employed. These included the fact that:

  • Uber interviews and recruits drivers;
  • Uber controls key information as to the passenger’s identity and intended destination and does not share this with the drivers, until the passenger is collected;
  • Uber fixes the fare and the driver cannot agree a higher sum with the passenger;
  • Uber imposes conditions on drivers, instructing them on how to do their work and controlling them in the performance of their duties;
  • Uber subjects drivers through its rating system to what is effectively a performance management / disciplinary procedure; and
  • Uber handles passenger complaints and reserves the right to amend drivers’ terms unilaterally. 

The Implications

This test case on employment status could have massive implications and affect tens of thousands of workers in the ‘gig economy’, in which companies classify them as self-employed, and use apps and web platforms to match customers with workers. 

This case could have massive implications and affect tens of thousands of workers in the ‘gig economy’

Other businesses that operate in a similar way include Deliveroo, which no doubt will be have been awaiting this decision with bated breath. They engage couriers to deliver takeaway food to customers, ordered via their app and online platform. 

Deliveroo hit the headlines back in July after reports that it includes a clause in its agreements with couriers that they will not bring a claim challenging their employment status, including being a worker.  The likelihood is that such a clause will be a penalty clause and therefore unenforceable, so we may see similar claims being brought by its couriers in the future.  

Steps Employers Must Take

If you are one of those tech companies within the gig economy, then it’s advisable to review the working relationship with those individuals you engage.  As it may be those who you believe to be self-employed contractors, are actually workers or even employees.  The fact that it took an employment tribunal to decide whether these drivers were self-employed shows how complicated it is to prove employment status.  

it’s advisable to review the working relationship with those individuals you engage

Remember it’s the reality of that relationship that counts, and not simply what you describe it as, or think it is.  

It’s worth noting that this is only a first instance decision and not binding on other tribunals and courts.  However, an appeal by Uber against this decision is expected, and possibly beyond to the higher courts depending on the outcome.  Any payments due to the drivers will not be calculated until that process is over.  We will keep you posted, if and when this happens.

Mike Patterson is an industry ranked Employment Law specialist and Commercial Lawyer at Berwins Solicitors 

Be sociable. Share!

Get Social

Connect with us on LinkedIn

  • L500 60 Px
  • Chambers 60
  • Lexcel Accredited
  • Investors In People Silver 2
  • Conveyancing Quality
  • Ce Badge 60 Px
  • Carers Charter Logo 60 Px