Fri 26 Feb 2021

Uber "workers" firmly in the driving seat

The Supreme Court has upheld an employment tribunal finding that Uber drivers are workers and not independent contractors.

The long awaited judgment of the Supreme Court in the case of Uber BV & Others v Aslam & Others was handed down on 19 February.  The case primarily concerned the employment status of Uber drivers - specifically were they "workers" for the purposes of employment legislation? If they were then they would be entitled to be paid at least the national minimum wage, to receive paid annual leave and to benefit from certain other protections.  The case also considered, if the drivers were workers, what periods constituted their "working time".

When the case first came before the employment tribunal in 2016 there were approximately 30,000 Uber drivers operating in London, with a further 10,000 operating throughout the rest of the UK.  The claimants were taken as a test case to establish employment status.  Individuals could become Uber drivers by signing up online and then attending and presenting certain documents to the offices of their local Uber company.  They required to provide and cover the running costs for their own vehicles.  They also took part in a brief interview and watched a presentation about the Uber app and certain Uber procedures.  Once accepted as an Uber driver they were given free access to the Uber app.  They made themselves available for work by logging on to the app.  When they did so the fare was calculated by the app and debited from the credit or debit card that the passenger has registered with the app.  Uber made a weekly payment to the driver of sums paid by the passengers less a "service fee" that they retained.

The drivers were not provided with any insignia or uniform and in London were discouraged from displaying Uber branding.  They were though given instructions about how to conduct themselves and were expected to meet certain standards of performance with penalties ranging from being automatically logged out for periods of time for refusing or cancelling trips, through to being removed from the platform and accounts being deactivated if their passenger rating dropped too low.  Uber would handle customer complaints and if a refund was required this would usually result in a correspondingly lower payment to the driver. 

Uber's position was that it was solely a technology provider and the local Uber subsidiary companies acted as booking agents for the drivers - something akin to minicab firms. Uber argued that minicab firms had been recognised in judicial decisions as acting as booking agents for self-employed drivers who then provide transportation services directly to passengers.  It also relied upon the wording in its standard written contracts, emphasising the drivers' freedom to work as much or as little as they liked and maintained that they were independent contractors.

When the case first came before the employment tribunal it held that the drivers were workers, and that they were working whenever they (i) had the Appellant's app switched on; (ii) were within the territory in which they were authorised to work; and (iii) were able and willing to accept assignments.  This judgment was upheld by the EAT and by the Court of Appeal, albeit with one dissenting judgment which may have given Uber a glimmer of hope for the appeal to the Supreme Court.

The Supreme Court upheld the employment tribunal's judgment that the drivers were "workers".  It unanimously dismissed the appeal, finding that Uber contracts with passengers and then engages drivers to carry out the bookings for it.  It was wrong to treat the written agreements as the starting point in deciding whether an individual is a worker.  Rather, the correct approach is to consider the purpose of the relevant employment legislation which is to give protection to vulnerable individuals who have little or no say over their pay and working conditions.  The Court emphasised five aspects of the findings made by the employment tribunal:-

  1. Uber dictated how much the drivers were paid as they set the fare;
  2. The contract terms on which drivers provide their services are imposed by Uber, the drivers have no say in them;
  3. Once logged on to the app the drivers choice as to whether to accept fares is constrained by Uber's monitoring of the acceptance rate and imposition of penalties for refusals/cancellations;
  4. Uber exercised considerable control over the way in which the drivers delivered their services including via the passenger rating system which, if it fell too low, could result in the driver being removed from the platform; and
  5. Uber restricts communications between passenger and driver to the minimum necessary to perform the trip, taking active steps to prevent drivers establishing a relationship with the passenger beyond the individual fare.

To make a bad day in court for Uber even worse, the Supreme Court also held that the employment tribunal was correct to find that the time spent by the drivers working for Uber included any period when the driver was logged into the app within the territory in which the driver was licensed to operate and was ready and willing to accept trips.  It was not limited to the time spent actually driving passengers.  This finding will significantly increase Uber's liability for national minimum wage and holiday pay, the number of hours worked being of relevance to both calculations. 

The case will now return to the employment tribunal which will decide the level of award the drivers are entitled to.

This judgment has been awaited with some trepidation by gig economy companies, in particular those who have a similar business model to Uber.  For Uber the ramifications include potentially thousands of compensation claims and also higher running costs including not only minimum hourly rates and holiday pay but also the need to auto-enrol workers into a pension scheme.  Not surprisingly, the company is currently maintaining the position that the judgment "focussed on a small number of drivers who used the Uber app in 2016" and that it does not therefore impact on the majority of their drivers.  That view is now likely to be tested via further tribunal claims. 

While the judgment will undoubtedly have significant ramifications for businesses operating in the gig economy, it should not be hailed as the final word on employment status as these cases do all turn on their own facts.  For example, substitution was not an issue in the Uber case and where there is a genuine ability to substitute that has been used that factor can have a significant impact on the outcome of such claims. 

It would though be wise for gig economy businesses to review their working arrangements to ensure the individuals they are engaging are correctly classified.  In addition to the claims made against Uber, worker status also brings with it the possibility of claims for discrimination under the Equality Act 2010, so any review should include practices relating to equality and diversity. In carrying out such a review businesses should be in no doubt that the focus of any court and tribunal will be on the day to day reality of the working arrangements and not the written contractual arrangements between the parties.

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