• Uber granted right to appeal in landmark tribunal

  • 20 Apr 2017
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Decision hinges on whether drivers are self-employed; separate construction sector case could prevent use of umbrella companies

Uber has been granted the right to appeal against a ruling made by a London employment tribunal last year that its minicab drivers should not be viewed as self-employed.

The Employment Appeal Tribunal (EAT) in London has set a two-day hearing to start on 27 September, to consider whether drivers are entitled to workers’ rights including holiday and sick pay.

The news comes as an appeal is launched in a separate case involving the use of umbrella companies in the construction industry. The two tribunals could have significant implications for the nature of self-employment in the UK.

The Uber case, brought by two drivers and supported by the GMB union, was heard in July 2016 and could affect tens of thousands of the firm’s drivers. The union challenged Uber’s claim that its drivers were “partners”, rather than employees, and were therefore not entitled to the rights normally afforded to workers.

Uber argued that the majority of its drivers (76 per cent) said being self-employed and able to choose their own hours was preferable to being employed.

“The vast majority of drivers who use Uber tell us they want to remain their own boss as that’s the main reason they signed up to us in the first place,” a spokesperson said. “Licensed drivers who use our app are totally free to choose if, when and where they drive with no shifts, minimum hours or uniforms.”

Matt Gingell, partner at law firm Gannons, pointed out that the tribunal held that the drivers were still deemed to be working at the times when they were on standby. “This would mean the driver would be working without having any obligation to accept a specific job, and is one of the areas that might be appealed,” he said.

The case is not the first to shine a spotlight on the gig economy, but Gingell said it was difficult for individual cases to set a broader precedent as individual companies often have technically different operating models.

“The Uber case was decided on its facts, based on the Uber business model,” said Gingell. “Other businesses operating within the gig economy will have different models and an employment tribunal could quite easily reach a different conclusion in another case. In my view, it still remains a grey and confusing area of law.”

However, Michael Ryley, employment partner at Weightmans, said there were important issues in this case for all gig economy employers, many of whom will be waiting for this judgment before making decisions on whether to change their business models.

“Uber asserts that the vast majority of its drivers want their independence – consequently, if the tribunal’s decision is upheld then the flexibility and independence that goes with many gig economy jobs may be lost,” said Ryley. “There are big economic consequences hanging on the judgment, which is likely to be delivered some time in the autumn. The government will need to consider them alongside Matthew Taylor’s forthcoming report on modern employment practices.”

The well-publicised decisions involving individuals in the gig economy have so far been first instance decisions made by an employment tribunal, said Liz Stevens, professional support lawyer at Birketts. “It is therefore difficult to draw any broad conclusions from these cases even though they have all – so far – been decided in favour of the individual having ‘worker’ status,” she said.

“Uber will face significant difficulties in persuading the EAT to uphold its appeal, but if the appeal does go in its favour it is likely to have much broader implications for other employment status cases in the pipeline and potentially make it harder for other claimants, such as Deliveroo couriers, to make a case for worker status.”

In a separate development, which potentially has even broader implications, Unite is launching an appeal in the case of Russ Blakely, who was required to accept payment through an umbrella company when working as a pipefitter last year.

Blakely brought an employment tribunal case for unlawful deduction of wages – for the fee and employers’ national insurance contribution required by the umbrella company – as well as for accrued holiday pay he said he had earned and not received. 

The Reading Employment Tribunal dismissed the original claim.

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  • Railway engineering firms use umbrella companies to pay it's 'workers' and the practices of these companies don't align themselves to how workers in the UK should be treated. For example, a 'contractor' (an individual worker) who requests a day off is likely to lose out on a whole week's work as a minimum. There is also a distaste for 'contractors' who refuse to work a weekend and then appear not to be offered work during Monday through Friday. However, should a contractor exceed the 'excessive hours limit' they are refused work to ensure they receive proper entitlements to rest, whether this suits them or not. There is no life/work balance since most work is a great distance from home with 'contractors' being required to stay where the work is. I'm surprised we don't see cases brought against these companies...