Uber drivers are workers not self-employed, says Supreme Court
19 Feb 2021
The Supreme Court has ruled that Uber drivers are workers and are entitled to minimum wage and holiday pay
19 Feb 2021
The judgment has wider implications for the gig economy, as people who work on these platforms are considered as self employed and employers do not have to pay holiday or minimum wage, or employer’s national insurance contributions.
Uber will probably have two different types of drivers and therefore this will create a situation where the company has two contracts and will have to offer drivers the option to have contract.
Retrospectively the taxi hailing app will have to pay holiday pay. The challenge is how Uber controls who comes on to platform, so if a driver signs on at night for example, Uber will need to have some guidelines around when they can sign in so there is work available.
Uber is a particular type of business model in the gig economy. The critical issue is control and supervision, and whether in law you are self employed or a worker.
Uber argued that Uber BV acted solely as a technology provider with its subsidiary (Uber London in this case) acting as a booking agent for drivers who are approved by Uber London to use the Uber app. The company stated that drivers are independent contractors who work under contracts made with customers and do not work for Uber.
Uber characterises this process as collecting payment on behalf of the driver and charging a “service fee” to the driver for the use of its technology and other services.
Where a ride is booked through the Uber app, it is Uber that sets the fare and drivers are not permitted to charge more than the fare calculated by the Uber app. It is therefore Uber which dictates how much drivers are paid for the work they do.
The Supreme Court judgment said that ‘transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber. Drivers are in a position of subordination and dependency in relation to Uber such that they have little or no ability to improve their economic position through professional or entrepreneurial skill’.
In his judgment, Lord Leggatt wrote: ‘The employment tribunal was, in my view, entitled to conclude that, by logging onto the Uber app in London, a claimant driver came within the definition of a “worker” by entering into a contract with Uber London whereby he undertook to perform driving services for Uber London.’
Reacting to the case, the claimants welcomed the ruling, which has taken six years to run through the courts since the initial Employment Tribunal hearing.
‘During the six years of these proceedings, we have watched the government commission and then shelve a review of the gig economy yet do nothing to help us. I hope in future the government will choose to carry out its duty to enforce the law and protect the most vulnerable from exploitation.’
James Farrar, co-lead claimant and App Drivers & Couriers Union general secretary said: ‘This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers. Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom. The reality has been illegally low pay, dangerously long hours and intense digital surveillance.
‘I am delighted that workers at last have some remedy because of this ruling, but the government must urgently strengthen the law so that gig workers may also have access to sick pay and protection from unfair dismissal.’
Commenting on the Uber ruling, Alan Price, CEO of BrightHR, said: ‘The Supreme Court has held that two taxi drivers who challenged Uber over their employment status are ‘workers’, and not ‘self-employed contractors’. This ruling could have significant consequences for both Uber and other employers in the gig economy who work on a similar ‘on demand’ basis.
‘Workers have more employment rights than self-employed contractors, including rights to earn the national minimum wage and receive paid annual leave. Importantly, they still do not have unfair dismissal protection, nor many other rights that are exclusive to “employees”.
‘The Supreme Court agreed with previous appeal decisions in this case, which has now been running for several years. Uber had continued to maintain that their drivers were self-employed. The Court decided that the working arrangements that exist between Uber and the drivers do not contain the autonomy – during the period when the driver is logged on to the app – that must be present for someone to be classed as self-employed.
‘Uber are now unable to appeal any further; the Supreme Court represents the final legal say on this case.’
The case will now return to the Employment Tribunal which will decide how much compensation drivers are entitled to.