The much-reported employment tribunal claim against Uber is important because of the enormous number of so-called self-employed Uber drivers, plus many such others in the ‘gig’ economy, who likely to be affected by the Judgment. Many have cast Uber in the same mould as Sports Direct, BHS and others, whose practices have led to the Government recently consulting on corporate governance within UK businesses.
Although Uber has confirmed they are seeking an appeal, for the moment at least it means that incorrectly labelling those who work as ‘self-employed’, may result in unexpected claims for unpaid holiday pay, pay below national living wage and unpaid pension benefits. Workers also have whistleblower protection.
The tribunal was sceptical of the complex documentation on which Uber relied in arguing a nonsensical legal relationship between the various Uber companies, the drivers and the passengers, commenting that it resorted to ‘fictions, twisted language and even brand new terminology.’ Other considerations taken into account by the tribunal in its Judgment included that Uber exercises a great deal of control over the drivers from setting the route, fixing the fares, controlling key passenger information, to instructing them on how they do the work. It also noted that the drivers could hardly be seen as each being in business on his/her own account because of the unequal bargaining position between each of them and Uber.
The result is that Uber drivers are deemed workers when they have the Uber app switched on, are within the territory in which they are authorised to work and are able and willing to accept assignments.
Deciding whether an individual is a worker or self-employed is not an easy task for employers. Essentially it is all about whether the person is working for the employer as an integral part of its operations or, is independent enough to market their services to the world in general. This is not always an easy distinction to make. If the person is an integral part of the operation the law offers protection as the relationship is not equal. If independent, the person is deemed genuinely self-employed and pretty much (except for some discrimination rights) on their own.
Therefore if you engage individual contractors on a self-employed basis, wish to discuss the issues raised in this blog or any need any other employment law advice, contact your usual adviser in the employment team.