You may recall that in October 2016 the Employment Tribunal made a landmark ruling that Uber drivers were deemed to be “workers”.
This meant that they were entitled to certain basic rights, such as the right to be paid the national minimum wage, entitlement to paid holidays and rest breaks and protection from discrimination.
This contrasted sharply with Uber’s practice of defining its drivers as “self-employed” rather than as “workers”. This, according to Uber, meant that the drivers were not entitled to the basic rights mentioned above. Uber believed that the drivers’ autonomy and ability to “pick and choose” when to work was indicative of their self-employed status.
The Employment Tribunal, however, disagreed. In its view a driver could be properly designated as “self-employed” only if in reality he was operating his own businesses and Uber was a customer or client of that business. Despite the contractual documents – carefully prepared by Uber’s lawyers – which suggested that this was the case, the reality of the situation was very different. The drivers were subject to a large degree of control by Uber which managed their performance, instructed them how to do their work and imposed numerous conditions. It could not sensibly be said, decided the Tribunal, that this reflected a business-to customer relationship. In its view the drivers were clearly workers.
What’s the latest?
In November 2017 Uber made an unsuccessful appealed to the Employment Appeal Tribunal, arguing that Uber were simply acting as an agent (or “middleman”) for the drivers who were in business on their own account and whose customers were the passengers they were carrying. The Appeal Tribunal disagreed; holding that that the drivers were working for Uber; not for the passengers.
Uber has now appealed again, this time to the Court of Appeal. It continues to argue that it is merely an “agent” whose sole role is to connect drivers to passengers. It takes the view that the Appeal Tribunal fundamentally misunderstood its business operation.
The Court of Appeal is hearing the case this week (30 and 31 October 2018)
So why does it matter?
The Uber appeal is of great significance to all businesses which engage contractors in the belief that they are self-employed. These businesses typically (but not exclusively) operate within the ‘gig economy’ – often in the fields of transport and delivery, hospitality and labour services and frequently offer temporary and flexible working arrangements.
The approach of the courts to the Uber case so far, echoed by the ruling in the Pimlico Plumbers decision earlier this year (which said that a significant degree of control exercised by a business will negate an argument that an individual is not a worker) demonstrates that simply describing someone as self-employed does not make them so. Practical reality will prevail over the terms of written contracts.
Any business which engages self-employed contractors will need to pay close regard to the Uber appeal as it proceeds this week. Depending on the result of the appeal, they will also need to consider whether they are depriving individuals of basic workers’ rights and opening up themselves up to risk of expensive legal action.
This is definitely one to watch as the appeal rumbles on this week!