The Employment Tribunal has ruled that two Uber drivers are “workers” within the meaning of the Employment Rights Act 1996.
The tribunal looked closely at the arrangement between Uber and its drivers, and, despite the flexible nature of the arrangement, was satisfied that the control held by Uber was such that these drivers were “workers” and not self-employed, under UK employment law.
This decision was arrived at despite clear efforts by those who drafted the agreements between Uber and its drivers to preclude the formation of any employment relationship. The contract itself described the drivers as “self-employed.”
However, the tribunal looked beyond the strict wording of the contracts between the drivers and the Uber and considered the true arrangement between the parties to establish that an employment relationship did exist.
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This decision has significant consequences for both driver and Uber alike as certain significant employment rights attach to “workers”. Workers are entitled, for example, to the national minimum wage (and national living wage), 5.6 weeks’ paid annual leave each year, a maximum 48-hour average working week, rest breaks and protections under the whistleblowing legislation.
“Workers” are not however entitled to certain rights which are preserved for “employees”, such as the ability to claim unfair dismissal, statutory redundancy payments, and the protection of TUPE.
This decision comes after the Commons select committee on business, energy and industrial strategy announced an inquiry into the “future world of work and rights of workers”. The inquiry will focus on the changing nature of work and the status and rights of agency workers, the self-employed and those working in the “gig economy”.
There is no doubt that this decision, if upheld, will have implications for this so-called “gig economy” and those involved should consider carefully whether their arrangements in practice are consistent with their arrangements in writing.
The decision will be welcomed by the some 400,000 Uber drivers throughout the UK, but they shouldn’t stop the meter running just yet. It is almost certain that this decision will be appealed, and it is perhaps only a matter of time before taxis to the Supreme Court are ordered.
In the meantime, this decision stresses the importance of getting “employee status” right and ensuring that the correct employment rights are attached to the individuals in question.
Employment status is a sensitive area of the law, and this decision highlights that the tribunal will often look beyond the wording of any contract between the parties to establish the true agreement and relationship involved.
• Deborah Miller is a partner specialising in employment law at MacRoberts