Alternative Text Posted by Kerry Gardiner

The rise of the “gig economy” has meant that many businesses have been waiting with bated breath for the judgment of the Employment Tribunal in the widely publicised Uber case (Aslam, Farrar and Others v Uber Case Nos 2202550/2015 & Others).

At the heart of the case was whether Uber’s drivers are “workers” within the meaning of Section 230(3)(b) of the Employment Rights Act 1996, Regulation 36(1) of the Working Time Regulations and Section 54(3) of the National Minimum Wage Act 1998.

Uber maintained that they were merely providing a platform via its App to put drivers in touch with customers. However on Friday, the much awaited decision was handed down. In short the Employment Tribunal was not impressed by Uber’s case and held that when a driver a) has the App switched on, b) was within the territory in which he was assigned to work and c) was able and willing to accept assignments the driver was working under a contract within the definitions of a “worker”.

uber-bike

At first glance this may seem surprising not least because Uber drivers are never under any obligation to switch on the App and even when logged on there is no obligation to accept any assignment offered to them, leaving drivers entirely free to set their own work schedule. That kind of autonomy may be considered as indicative of an independent contractor, however, on the facts of the case the tribunal found an overwhelming number of factors which pointed the tribunal to conclude to the contrary. Key factors in the tribunal’s reasoning included (for a full list of factors see paragraph 92 of the Judgment):

 

  1. The way in which Uber sought to compel agreement as to its description of itself. The tribunal were particularly troubled by Uber’s attempts in “resorting in its documentation to fictions, twisted language and even brand new terminology” which it considered merited “a degree of scepticism”;
  2. The language Uber used to describe itself in “unguarded moments”;
  3. The written terms and Uber’s case before the tribunal did not correspond with the practical reality. In fact the tribunal went as fair as saying that the “notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous”;
  4. That the supposed driver/passenger contract is “pure fiction” not least because it relies upon the assertion that “the driver enters into a binding agreement with a person whose identity he does not know (and never will know) and who does not know and will never know his identity, to undertake a journey to a destination not told to him until the journey begins, by a route prescribed by a stranger to the contract (UBV) from which he is not free to depart (at least not without risk), for a fee which (a) is set by the stranger, and (b) is not known by the passenger (who is only told the total to be paid), (c) is calculated by the stranger (as a percentage of the total sum) and (d) is paid to the stranger.”;
  5. It is not real to regard Uber as working “for” the drivers in light of a number of factors including that fact the Uber interviews and recruits drivers, sets routes, fixes fares, imposes various conditions on drivers, handles driver complaints, applies a rating system and reserves the power to amend the drivers’ terms unilaterally;
  6. The unequal bargaining positions of the parties.

 

The tribunal did however point out that none of their reasoning should be taken as doubting that Uber could have devised a business model not involving employing drivers just that it had failed to do so.

The ramifications of the judgment is that Uber drivers are entitled to be paid the national minimum and living wage, holiday pay, sick pay and to whistleblower protection, however Uber have already stated their intention to appeal. In the meantime it is not clear that Uber will honor the judgment having asserted that the judgment only applies to the two employees who brought the action and that other drivers’ terms remain unaffected.

Such an approach is perhaps not surprising; the financial consequences of the judgment for Uber are enormous (in respect of back pay as well as future costs) and Uber will no doubt need to review its model.

In the meantime this will inevitably mean a period of uncertainty for Uber’s drivers as well as others working in the “gig economy”.

That said, a win for the Uber drivers does not necessarily mean others will see similar success; such cases are always fact sensitive. Those that operate similar businesses will no doubt want to review their the way in which they operate and keep abreast with the developments of this case and other similar businesses in the near future, including City Sprint who are facing a similar legal challenge due to be heard next month.

Also of interest on this topic is the timely announcement of the Commons Select Committee on Business, Energy and Industrial Strategy that they have launched an inquiry into the world of work and rights of workers.  The terms of reference include (you can see the full terms of reference here):

 

  1. What should be the status and rights of agency workers casual workers, and the self-employed (including those working in the “gig economy”), for the purposes of tax, benefits and employment law?
  2. For those casual and agency workers working in the “gig economy” is the balance of benefits between worker and employer appropriate?

 

Views, I am sure, will be far and wide and we must not forget that as we have seen with the similarly controversial “zero-hours contracts” the disdain for this way of working is not shared by all.

If you have any questions or would like to discuss the employment status of your workers please get in touch.

Contact Kerry