The evolution of working practices over recent years has brought a flurry of litigation, as new technology-based working models have brought various complex legal issues to the fore; none more so than worker status.
This month the Supreme Court handed down one of the most significant employment law decisions of the tech era, finding that Uber drivers are “workers” for employment law purposes.
What was the issue?
Very broadly, there are three types of employment status:
Distinguishing employees from workers, and workers from self-employed contractors, can be very complicated; but the distinctions are significant.
Employees are fully protected by employment law, whereas the self-employed have little to no employment protection. “Workers” sit in the middle. Workers cannot bring claims for unfair dismissal, but they are, for example:-
- Entitled to national minimum wage and holiday pay; and
- Protected under the discrimination and whistle-blowing legislation.
What were Uber saying?
Uber contended that their Drivers are self-employed contractors. They pointed to a number of arguments, notably:
- The Drivers’ contracts specifically say that they are self-employed contractors.
- That Uber is simply a booking agent that allows drivers to access private customers through its app.
There are also a lot of factors in the relationship that would normally point towards self-employment. For example:
- Drivers use their own cars and can use their own phones.
- Drivers are responsible for their cars’ operating costs.
- Drivers can decide when and where they work.
- Drivers can work for competitors.
What the Supreme Court held
Despite the various arguments for self-employment, the Supreme Court’s decision fell on the amount of control that Uber have over the Drivers once they have logged on to the app and reported for duty:
- Whilst, in theory, Drivers can choose when they work, once they are logged on to the app they can be penalised (logged off) if they refuse or cancel trips.
- Where a Driver’s average customer rating falls below 4.4, they become subject to “quality interventions” and can be removed from the platform if they do not improve.
- Drivers can be subject to financial penalties if they do not follow the recommended route.
- The Driver has no control over what the customer pays for a trip, or, in turn, what they are paid by Uber.
- Drivers have no say in the terms of their contract with Uber.
- Whilst the drivers can use their own vehicles, the vehicles are subject to vetting by Uber.
- Unlike minicab drivers, who have to find their own customers, Uber Drivers have their customers delivered to them via the app.
What does this mean for you?
Crucially, this decision means that Uber Drivers are entitled to:
- National Minimum Wage for the time when they are logged on to the app, regardless of whether they are transporting passengers; and
- Holiday pay.
This decision is far reaching and will apply to all similar business models, such as Deliveroo and UberEats, who connect customers to service providers via digital platforms.
This is definitely welcome news for the tens of thousands of people affected, but you can expect your next Uber trip (and takeaway) to be that little bit more expensive!
If you have any questions about employment status or the affect of this decision on your business, please contact the BBS Law Employment Team.