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The UBER decision and the consequences for employment law

Employment

Sit back and relax

Uber is again appealing the decision of a court regarding the employment status of its taxi drivers. The Court of Appeal held by a majority that drivers are in fact workers and are entitled to such rights as paid leave, minimum wage and sick pay. The decision upholds the original decisions of the Employment Tribunal and the Employment Appeal Tribunal.

Uber’s argument throughout the trial has been that it acts as an agent for its drivers through its app, essentially acting as an intermediary providing booking and payment services. The argument continues that a contract is formed at the beginning of the journey between Uber’s drivers and its passengers which concludes after each ride.  In support of its argument, Uber also pointed to the fact that its drivers have freedom to accept or decline rides (although drives will receive a penalty if they decline to frequently).

The Court of Appeal rejected this argument, looking behind the purported contract and concluding that drivers do not have a contractual relationship with passengers. The fact that Uber has a large degree of control over the fare and route taken by its drivers was an important consideration for the court in coming to its conclusion.

What is a worker anyway?

In the new “gig” economy, the distinction between the classification of employment status has become an increasingly complicated, and important one.  

In particular, the distinction between an employee and a worker is very much a grey area. Both an employee and worker can be employed under a contract but there can be subtle differences between the two.

A distinctive feature is that workers may have limited rights to accept or reject work, with a limited right to send someone else to carry out work, such as a sub – contractor. No such options are available to an employee.

Both employees and workers have key rights, such as entitlement to minimum wage and the right to holiday pay. However, employees have greater protection in the form of the rights not to be unfairly dismissed and to receive a statutory redundancy payment.

If you, or your business have a legal issue that needs sorting, we pride ourselves on giving no nonsense practical legal advice.