Uber drivers are ‘workers’ – but why does this matter?

By Jill Evans, Law Content Analyst, CIPD

The Employment Appeal Tribunal (EAT) recently decided that drivers working for the taxi app, Uber, are not self-employed as the company maintained, with no employment rights, but workers, entitled to paid holiday and the national minimum wage. The judgment endorses an employment tribunal’s finding last year and is the latest in a long line of such cases involving minicab companies, like Addison Lee, and courier firms such as CitySprint and Deliveroo.

As with other ‘gig economy’ cases, Uber argued that its drivers were independent contractors. They could work for other companies, including its direct competitors, and they paid their own expenses, including taxes and the cost of their licences. The company said its role was that of an agency, matching drivers to those who needed a cab.

Both the employment tribunal and EAT judges disagreed. The drivers could not set their own fares, and were subject to a number of controls. The drivers claimed they had to accept 80 per cent of trips offered, or lose their account status, although this point is disputed by the company. The EAT judge decided that when the drivers accepted trips, they were workers, but was less certain about their status between assignments. This could make paying the drivers the minimum wage difficult to operate in practice.

Uber is expected to appeal again. It may be the company has no choice, because otherwise its business in the UK would not be viable. It has been suggested that the case could ‘leapfrog’ the Court of Appeal and go straight to the Supreme Court, to be heard alongside Pimlico Plumbers’ employment status case in February 2018. Organisations and those who work for them would welcome more guidance on the issues involved.

There appears to be no shortage of either new applications for web technology, or those willing to work in, or consume, the services the apps give rise to. Uber has around 2 million UK passengers registered with it, according to the EAT judgement, and around 40,000 drivers in the UK, of whom 30,000 are in the London area. When margins are tight and competition fierce, the cost of living is rising and uncertainty over earnings is growing alongside it, disputes between organisations and workforces will continue to arise in the gig economy.

At the moment, employment law is lagging behind these new ways of working. The government-sponsored Taylor Report suggested there was a need for a newly defined ‘dependent contractor’ category of worker, and that the minimum wage rules on piece work might be adapted for those working through web platforms. But so far no plans for new legislation have emerged.

In the meantime, each case will be judged on its particular facts, and employers will need to become more confident about the employment status that applies to each member of their workforce if they wish to avoid having that decided by an employment tribunal. Our recently updated Employment Status Q&As can help organisations check which rights apply to which category of worker, and keep them up to date as the case law develops in this area.

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