In the long-awaited case of Uber BV and others v Aslam and others involving the gig economy, the UK Supreme Court has finally ruled on whether private hire drivers operating through the Uber platform are ‘workers’ for the purposes of employment legislation or are classed as ‘self-employed’.
Several Uber drivers brought claims for unlawful deductions from wages - the alleged failure to pay the national minimum wage - and for a failure to provide paid annual leave. About 1,000 other Uber drivers have made similar claims but these were put on hold (or ‘stayed’) pending the Supreme Court verdict. Two of the drivers, Mr Farrar and Mr Aslam, were selected as test claimants for the case.
The Supreme Court has ruled against Uber and the judgment awards ‘worker’ status to those such as Mr Farrar and Mr Aslam. Being classed as ‘workers’ defined under section 230(3) of the Employment Rights Act 1996 affords them, and potentially hundreds of thousands of other ‘gig’ workers like them in the booming parcel and food delivery sectors, rights such as protection from unlawful deductions from wages under Section 13 of the Employment Rights Act 1996; entitlement to receive the national minimum wage under Section 1 of the National Minimum Wage Act 1998; and entitlement to paid annual leave under Regulation 13 of the EU Working Time Regulations 1998 which still applies post-Brexit. Being classed as self-employed would have denied Mr Farrar and Mr Aslam, and many others like them, these rights.
The Supreme Court held that an Employment Tribunal must look at the reality of the relationship between parties, such as Uber and the drivers in this case, and not be bound by the contents and wording of the complex legal documentation, like that drawn up by Uber. Employment status is a multi-factorial test and the relevant factors in this case included the fact that Uber set the fares and contractual terms, not the drivers; Uber could impose sanctions on drivers for declining work and subjected them to a ratings system which could result in warnings and ultimately termination of their contract; and it imposed limitations on the driver’s communication and ability to contract directly with the passengers in future. The drivers were therefore incapable of furthering their business as a genuinely self-employed person would be.
The original Employment Tribunal was therefore entitled to find that Uber drivers are ‘workers’ from the moment they switch on their Uber apps and are available for work in their area until they switch off their Uber apps at the end of their working day (as opposed to merely when they have a passenger in their vehicle). The Supreme Court found unanimously that the drivers are not merely sub-contractors who are self-employed.
Uber could now face paying tens of millions of pounds in compensation and the ruling has major implications for similar companies in the ‘gig’ economy. Worker status guarantees basic protections for those individuals, including protection from unlawful deductions from wages, entitlement to the national minimum wage and paid leave. The case will now be sent back by the Supreme Court to the Employment Tribunal to decide how much compensation the Uber drivers are entitled to and tens of thousands of Uber drivers could be entitled to an average of £12,000 each in compensation.
Employers could now potentially be facing a huge increase in staffing costs, as well as possible legal action from their ‘workers’ in pursuit of the rights they have now won after Uber’s unsuccessful appeal.