Are Uber drivers workers? The wider impact of the ruling on the ‘gig’ economy

A decision reached by the London Central Employment Tribunal in which it was ruled that two Uber drivers were in fact workers has caused a storm in the media since the decision was published on 28th October.

 Uber has confirmed that it will be appealing the decision but, in the meantime, Sarah Begley of The Wilkes Partnership, considers the key points of the decision and some of the potential wider implications for other similar ‘gig’ economy drivers.

The judgement in this particular case is supported by long and detailed reasons. In essence, the two Uber drivers in question were found to be workers within the meaning of the Employment Rights Act, Working Time Regulations and National Minimum Wage Act and accordingly, were entitled to the minimum wage, protection from unlawful deductions, statutory holidays, whistle blowing protection as well as other worker ‘rights’ provided under the legislation. Although this case has been long-awaited by many as something of a ‘test’ case, it is fact specific to Uber’s business model, but could of course have ramifications for the wider ‘gig economy’.

The Tribunal, disagreeing with Uber’s assertion it is are merely a technology platform, looked carefully at the relationship between the company and the driver taking issue with the following factors:

• Uber interviews and recruits drivers.
• Uber controls key information i.e. customer details which are not available to the driver.
• Drivers must accept, and are not allowed to cancel, trips. Consequences of a breach are warnings and being logged off.
• Uber suggests that they are merely the agent but have sole and absolute discretion on whether to accept or decline bookings.
• Uber sets the route and the driver must justify any deviations.
• Uber imposes various conditions on drivers such as their choice of vehicle and the performance of their duties is controlled.
• Rates and (if applicable) rebates are determined by Uber. Drivers are generally not involved.
• The driver rating system amounts to a performance management/disciplinary procedure.
• Uber handles customer complaints.

Uber argued that their terms and conditions are clear but the Tribunal gave them short shrift. Case law on employment status is helpful in this area. Tribunals will always look at the reality of the situation and will not be misled by terms and conditions issued by a party in the dominant bargaining position. The Tribunal concluded that the reality is that Uber is not simply a technology platform. It is a supplier of transportation services and markets a product range. The marketing is not done for the benefit of an individual driver, but for the benefit of Uber’s name.

With regard to working time, the Tribunal found that a driver is ‘working’ when he has switched on the App in the territory in which he is licensed to use it, and is ready to accept trips. It is not simply when he is driving.

The upshot of this decision is that employers in the FMCG sector who utilise similar contracts masquerading as bogus self-employment should review them carefully to avoid a business model with costly ramifications. The key message is if you are looking to engage contractors on a self-employed basis, give them as much freedom as possible and ensure the written terms accurately reflect the arrangement in practice. The higher the degree of control, the less likely the individuals concerned will be deemed to be genuinely self-employed.

This decision could limit the aspirations of certain companies looking to adopt the Uber model – for instance, Deliveroo – which already operates in a similar model to Uber. But, this ruling arguably levels the playing field for traditional retailers, as well as for business models like that of Just Eat, which acts as a middleman and does not hire couriers. Of course, one downside is that any additional cost incurred by the company is likely to be passed on to the customer.

For advice on any employment related matter and to discuss our Free Employment Health Check please contact Sarah Begley on 0121 733 4312 or [email protected]