After an extremely long running and highly publicised legal battle, the judgement of the Supreme Court has been handed down this morning in the case of Uber BV v Aslam, and the unanimous decision is that Uber’s drivers are in fact ‘workers’ providing personal services.
What was the view of the Supreme Court?
The Supreme Court rejected Uber’s appeal and sided with the Respondents (the drivers) and agreed with the previous rulings of the Employment Tribunal, Employment Appeal Tribunal, and the Court of Appeal in determining that Uber’s drivers are not self-employed contractors, contrary to the arguments of the ride-hailing app.
Since the outset of the case, Uber has argued that they are not a transport business; they are simply a booking agent that hires self-employed contractors providing transport. They have continuously stated that their drivers have the freedom to choose when and where they work, and the terms of business between the parties reflect that of a self-employed agreement. The Supreme Court has now disagreed with this, ruling that the relationship between Uber and their drivers is more than that of an engager and a contractor.
When determining whether Uber’s drivers were self-employed contractors or workers, the Supreme Court reviewed the practical nature of the relationship between the parties and did not just focus on the black and white wording of their contracts. When reaching their conclusion, they took a variety of factors into account, but focused heavily on the following points:
- Who determines the fare that the driver can charge the customer? It is Uber that determines how much the driver can charge, and the driver has absolutely no input or say about this. A driver is unable to increase their fees from the charges set by Uber, and therefore the only way that they can earn more money is by working additional hours.
- Who negotiates the contract terms between the parties? Uber dictates solely the contract terms that are set between them and a driver, and the driver had no capacity or ability to negotiate these. Typically, a self-employed contractor has the power to negotiate their terms with their engager.
- Are the drivers subject to performance management? Uber has strict monitoring systems over their drivers, reviewing their star rating and the number of ride bookings that they reject. Uber penalises drivers if they do not meet expectations, provides them with warnings and will even terminate their contracts with them if they fall below the required standard.
The court believed that it was clear from the relationship between the parties that the drivers were subordinate to Uber and that the drivers do not have an equal footing when it comes to the negotiation of contracts, reflecting the relationship of that between an employer and a worker. Therefore, Uber’s drivers will now be entitled to the additional rights and benefits enjoyed by workers.
Furthermore, the court also rejected Uber’s claims that their drivers should only be classed as working for the purposes of working time when they have a passenger in their vehicle. Usually, a driver would log on to the transport app and wait for a rider to request a booking, and that driver would only be paid for the time in which they had the passenger in the car. The court has now ruled that this is unlawful, and that Uber’s drivers are to be classified as working from the moment they log into the app ready and waiting to accept bookings, to the moment they log off.
The Supreme Court is the highest court in the United Kingdom and Uber have exhausted their right to any further appeals.
What additional rights will Uber workers now be afforded?
Workers have additional rights to self-employed contractors. Amongst other things, they are entitled to claim national minimum wage, statutory sick pay, and statutory paid annual leave of 5.6 weeks per year. They are also afforded protection against whistleblowing and discrimination. This ruling will drastically affect the nature of the relationship that Uber has with their drivers, and they will now have to make provision for their drivers to receive all these benefits, which will come at a huge cost to the Company.
It is important to note though that workers do not have the enhanced rights of employees and cannot make claims for unfair dismissal, nor are they entitled to redundancy pay.
What financial impact will this decision have on Uber and other similar businesses?
Uber will now have to conduct a detailed review all of the contracts and policies that they have in place and amend these to include provision for national minimum wage and statutory annual leave at a very minimum.
Uber drivers will also now be entitled to make claims for backpay for national minimum wage, which will not just be restricted to the hours that they worked where they had a passenger in their vehicle; they will be able to claim for the entirety of the time that they were logged in to the Uber app. The workers will be able to claim for up to two years’ backpay (or £25,000, whichever is larger) in the Employment Tribunal, and up to six years’ backpay in the county court.
In addition to claiming backpay, the workers can also make claims for their statutory 5.6 weeks paid annual leave per year.
This landmark decision, although not surprising, will have a huge impact for so many businesses and workers within the gig economy. The financial consequences for some businesses following this decision could be crippling. Businesses with similar models to Uber should be reviewing the relationship that they have with their contractors and workers considering this decision. We strongly recommend that businesses seek legal advice should they have any concerns or queries about how this judgement could affect them.
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