An 'Uber' Decision

The recent Uber Case Decision

On 28 October 2016 the London Central Employment Tribunal held that drivers engaged by Uber are not in fact self-employed contractors, but rather, they are ‘workers’. Clearly this new employment status has vast implications on Uber and similar companies that form part of the so-called ‘gig economy’.

Gig economy is a term given to the workforce in which someone is hired, usually through a digital platform, to work on demand, for a short-term engagement. Uber offers such a service via a mobile app which allows passengers to book a ride from their phone.

Before this decision, Uber's classification of drivers as self-employed contractors meant that they were not entitled to certain employment rights. However, the worker status brings with it an array of entitlement and now permits workers the following rights:

- Paid holiday leave;

- A maximum 48 hour average working week with rest breaks; and

- The national minimum wage.

Uber has always maintained that its drivers were categorised as self-employed contractors, as that was the status their drivers wanted. Indeed Uber engages its drivers with the tagline “Work for yourself, drive when you want, make the money you need”. Uber believed that its approach gave its drivers the flexibility to work as much or as little as they wanted. However, this recent ruling has highlighted the fact that contractual provisions regarding employment status are not necessarily definitive and may still be open to interpretation by a tribunal.

The common question of whether an individual is an employee, worker or self-employed contractor is not at all black and white. For years lawyers have debated this very issue and to date it remains impossible to outline a clear set of defining criteria against which an individual's status can be definitively determined.

• An employee is defined as "an individual who has entered into or works under a contract of employment".

• A worker is defined as an individual who has entered into or works under a contract of employment or any other contract, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.

Unfortunately, the distinction between the two is very blurred and so lawyers rely on a helpful test to assist in identifying employment status:

1) Personal service: Did the individual undertake under the contract to personally perform work or services?

2) Mutuality of obligation: was there mutuality of obligation between the individual and the "employer"?

3) Control: Was there control of the servant (individual) by the master (employer)?

Whilst this recent Uber decision is not binding, it has set a ground-breaking precedent that will most certainly impact all those working in the ‘gig economy’ and directly affect similar business models going forward.

Consequently, Uber drivers are now entitled to paid holiday, a decent living wage and regular paid breaks.

Unsurprisingly, Uber has confirmed that it will be seeking to appeal the decision. 

CONTACT KEELY

If you would like more information or advice relating to this article or an Employment law matter, please do not hesitate to contact Keely Rushmore on 01727 798046 

© SA LAW 2020

Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them alone. You are recommended to obtain specific advice in respect of individual cases.

Read the latest Employment Views & Insights
They seek to understand their clients and advise accordingly to achieve the outcomes that they require for their business needs.
Chambers and Partners
SA Law Work Life red mug and glasses
Stained glass window Employment SA Law
Views & Insights
Coronavirus Job Retention Scheme Extended

CJRS extended from 31 October 2020 to 31 March 2021 as UK ushers in lockdown 2.0

Read More
Stained glass window Employment SA Law
Views & Insights
Winter Economy Plan - What is the Job Support Scheme and how will it work?

Chris Cook examines the key points from Rishi Sunak's coronavirus winter economy plan.

Read More
SA Law Red arrow neon light image
Views & Insights
Data Protection and workplace coronavirus testing

Managing the data protection challenges of workplace coronavirus testing

Read More
Phone Box with Man in a Bowler Hat
As there is so much expertise on offer from SA Law they can provide a legal expert on all areas so that it can be handled under one roof.
Legal 500
Stained glass window Employment SA Law
Views & Insights
Guidance for enabling a safe “return to work”

A guide to returning to work safely for those who are unable to work from home.

Read More
Stained glass window Employment SA Law
Views & Insights
BP Fuels Diversity and Inclusion Drive

Partner and Head of Employment & Data Protection Chris Cook comments in Personnel Today regarding BP's announcement of their new Diversity & Inclusion…

Read More
Stained glass window Employment SA Law
Views & Insights
Covid-19 and home-working mental health for the insurance industry

Keely comments on mental health issues faced by home-workers in the insurance industry plus duty of care and handling HR issues remotely during covid-19.

Read More
Stained glass window Employment SA Law
Views & Insights
Updates to off-payroll working in the private sector

Following the delay to the introduction of off-payroll working in the private sector, the government are introducing some amendments to the original proposals,…

Read More
They are knowledgeable, with a commercial mindset, but also down to earth and friendly so it is easy to be very honest with them.
Chambers and Partners