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Published 22 February 2021
The Supreme Court (SC) has upheld the decisions of the Employment Tribunal, the Employment Appeal Tribunal and the Court of Appeal that Uber drivers should be classified as 'workers', not independent self-employed contractors, and therefore are entitled to employment rights such as holiday pay, rest breaks and the minimum wage.
Uber had argued that they were, in effect, an intermediary or agency providing booking and payment services to self-employed drivers. Uber argued that the passengers contracted with the individual driver and not with Uber. Uber relied upon the quite complex written contractual arrangements that existed with the drivers.
In contrast the drivers argued that they were contracted by Uber to provide driving services for Uber. They argued that the passengers contracted with Uber not with them personally. The drivers relied upon the ‘reality’ of the position on the ground.
The SC rejected the argument that Uber was merely an agency or intermediary. In particular the SC pointed out that such an arrangement could not apply in an taxi context as it would be incompatible with the regulatory licensing rules that apply to taxi drivers in London.
The SC confirmed that it is correct to consider the reality on the ground rather than just what the written contract between the parties might say. This followed a previous decision of the SC (the Autoclenz case from 2011).
Uber had argued for a narrower interpretation and that Tribunals should not depart from the written contract between the parties unless there was some actual evidence of an inconsistent approach.
The SC rejected this argument. The SC noted that employment/worker contracts were different from normal commercial contracts.
The SC noted that the drivers had significant flexibility as to how they provided their services and, for example, could chose when and where they worked. However the SC listed a series of factors pointing to worker status.
There was no dispute that drivers were working when they were actually transporting a passenger.
However, in addition the SC held that drivers were also working during any period when they were within their territory (i.e. in this case London), had the Uber app switched on and were ready and willing to accept trips.
There remained a debate about the scenario where a driver works for multiple separate taxi companies and waits for a passenger with multiple apps open at the same time. The SC court recognised that this might be relevant in certain situations and might change the analysis. However the SC felt it did not apply here due to Uber’s market position.
The implications of this case are clearly wider than the Uber drivers. It follows the trend to closely scrutinise purported "self-employed" status. Although a number of business models and practices have been found to be incompatible with genuine self-employment by the courts and tribunals, all cases are heavily fact-sensitive – there have been exceptions and the SC does not preclude further exceptions arising. As such, other businesses who wish to use a freelance workforce should carefully consider the terms and arrangements they put in place, whilst remembering that what happens in practice will be as important, if not more important, as the terms and conditions written into any agreement with individuals.
Uber has a smartphone app by which passengers can book rides from drivers who also have the app. The drivers own their own cars and are free to choose when they make themselves available to accept bookings.
The case which give rise to these appeals were brought by Uber drivers against the company claiming holiday pay under the Working Time Regulations 1998 and under-payments of wages under the National Minimum Wage Regulations 1999.
In order to bring their claims it is necessary for the drivers to first establish that they are “workers” within the meaning of the Regulations. The Employment Tribunal held a preliminary hearing to decide that question; and also, if the drivers were workers, the period during which they were working, which is necessary for the calculation of any holiday pay and wages due. It held (1) that the drivers were workers; and (2) that they were to be regarded as working during any period when they were within their territory (i.e. London), had the Uber app switched on and were ready and willing to accept trips. The EAT, CoA and the Supreme Court have now upheld that decision.
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