A watershed moment for the ‘gig’ economy?

The case began with two drivers in 2016, who brought the case before the courts as they believed that they should be considered ‘workers’ rather than self-employed subcontractors. Uber disagreed, arguing it is a technology services provider acting as an agent for drivers in their business relationship with passengers.

This case arrived at the Supreme Court last year after both tiers of the Employment Tribunal and Court of Appeal all found that the Claimants were indeed “workers”, and that they were “working” whenever they (a) had the Uber app switched on; (b) were within the territory in which they were authorised to work; and (c) were able and willing to accept assignments. It held that there was no contract between the driver and passenger and that, in reality, the drivers worked for Uber.

The Supreme Court today dismissed Uber’s appeals and upheld the decisions of earlier courts (see The findings below for details).

It is expected that this decision will have a huge impact on the gig economy with many more individuals now able to claim worker status.

With this new found status, Uber drivers are now entitled to claim minimum wage which extends to their entire working day, rather than just when they are on a trip. Drivers can claim up to two years back pay or up to £25,000 in the Employment Tribunal and up to six years’ back pay in the County Court.

Also drivers will now be entitled to 5.6 weeks’ of paid leave each year, amongst other whistleblowing and similar rights.

Whether the principles set out in the judgment will be codified into legislation remains to be seen, but it is expected to be the defining judgment in status cases for years to come. It will certainly be relevant to the future shape of gig economy working practices, which have been prevalent in the past decade, and have been so vital recently during the Covid lockdown.

If you have concerns about how this judgement may affect your business please get in touch to discuss.

The findings:

The Supreme Court found that the drivers are workers for the purposes of s.230(3)(b) of the Employment Rights Act 1996, s.54(3)(b) of the National Minimum Wage Act 1998 and reg.2(1) of the Working Time Regulations 1998.

In applying the test for ‘workers’, there were 5 aspects of the Supreme Court’s findings which were relevant for this question over the drivers employment status:

• Uber sets the fare for trips and drivers are not permitted to dispute this. Therefore, Uber dictates how much drivers are paid for work they do;
• The contract terms are imposed by Uber and drivers have no say in this;
• Once a driver is logged on to the Uber application, they are monitored on whether they accept trips and imposing penalties where the driver rejects too many trips in a row;
• Uber exercises significant control over the way drivers deliver their services, one of several methods is a rating system through the passenger’s application. Any driver who fails to maintain average rating may face having their relationship with Uber terminated; and
• Uber restricts communication between the driver and passenger to only what is necessary. Therefore, drivers are unable to take active steps to establish a relationship with the passenger which extends beyond the individual ride.