End of the road for Uber – Claimant drivers are “workers”
In 2016 the Tribunal found that Uber drivers were workers and not self-employed or independent contractors.
Since then Uber has brought a string of unsuccessful appeals following the 2016 finding that a number of their drivers are workers and not self-employed independent contractors. Last year, Uber reached their final avenue of appeal, the Supreme Court, and the judgment was recently published. Six Supreme Court Justices unanimously found that the claimant drivers are workers and are therefore entitled to certain employment rights including the national minimum wage and paid holiday.
What is a worker?
Different employment rights arise depending on an individual’s employment status: employee, worker or self-employed independent contractor. The term “worker” incorporates employees (i.e. someone who works under a contract of employment) and individuals working under a contract of services to do work personally for the other party to the contract who is not a client or customer of the worker (known as “limb b” workers as the definition comes from section 230(3)(b) of the Employment Rights Act 1996). Employees have the greatest level of rights under employment law but there are also important rights which attach to limb b worker status.
Recent case law dealing with employment status has established that the test for employee status requires consideration of a number of factors including whether the individual must provide the services personally and the degree of control exercised over the individual by the employer. The test is the same for worker status, but the bar is lower. The Uber case dealt specifically with the issue of control.
The effect of the Uber judgment
A few key points from the judgment are below.
- As can be seen from the definition above, a contract is essential for worker status. The Supreme Court commented that employers are often in a stronger bargaining position when it comes to negotiating the contract, but the purpose of employment legislation is to protect individuals who have little say on the terms of their engagement. As such, the Court confirmed that Tribunals should not begin by looking at the contract but rather by looking at the nature of the working relationship. That is where the truth of the individual’s employment status will lie.
- The Court went further and declared that there is no absolute rule that the terms set out in a contract represent the entire agreement between the parties, even if the individual has read and signed it. Employers cannot simply point to a written contract signed by the individual and claim they are self-employed if the contract does not reflect the reality of the working relationship.
- The Court heard that the claimant drivers were subject to a high level of control by Uber and they were in a position of subordination and dependence and found this persuasive of their worker status. If you want to engage self-employed contracts you cannot expect to exercise the same control over them as you would your employees or workers.
- The Court confirmed that clauses in a contract which indirectly or directly attempt to stop someone enforcing their statutory employment rights will be void. In other words, if you engage someone as an independent contractor and set out in the written agreement that they are not entitled to minimum wage, holiday pay, etc, and they are found to be a worker, the provisions excluding worker rights will be void.
The Uber case related to individuals working in the gig economy, which in simple terms refers to individuals using a platform (in this case an app) to accept short term assignments. However, the decision is likely to be persuasive in relation to other cases on employment status. The judgment should not be a deterrent to employers from engaging self-employed contractors but if you wish to exercise a high level of control over the way they carry out the services, it is likely that they will be workers and they will be entitled to workers’ rights. Worker status and the rights attaching to it cannot be avoided through clever contract drafting as a Tribunal will look past the contract should a claim arise.