The long awaited decision from the Supreme Court on whether Uber drivers are workers or self-employed individuals has been handed down in a decision which is likely to affect many gig economy businesses across the UK. It upheld the driver’s claim that they are workers and entitled to some employment rights.
What is a Worker?
A worker status falls between an employee and a self-employed person. Workers do not have full employment rights such as protection against unfair dismissal or the right to a redundancy payment, but they are entitled to some rights and protections such as minimum wage and holiday pay. Self-employed people do not have any employment rights because they are not employed.
I am Self-employed!
Even if the contract says you are self-employed, if challenged, a court will look at the factual reality and particularly at the level of control one party has over another. In the Uber case, the court looked at how the services were delivered, rates of pay and the overall level of control Uber had over its drivers. Uber drivers had to sign into an app in order to register for work but Uber had the power to blacklist them if they declined fares. Drivers were not in control of the services they provided either; they were not told the destination until the passenger was collected and they couldn’t negotiate on fares.
Uber drivers were paid a percentage of the fares they carried so anytime without a fare was unpaid. The court held that the drivers are ‘workers’ from the moment they switch on their apps and are available for work in their area. They stop working when they switch their apps off.
What this means for Uber
The court ruling means that Uber drivers are now free to bring claims for unpaid minimum wages and Uber are likely to face multiple back pay claims from drivers. The claims can go back up to two years’ or £25,000 (whichever is the larger) in the employment tribunal, but if drivers claim in the county court they can claim up to six years’ back pay as well as claims for unpaid holiday. It is estimated that Uber could face a bill of around £100m.
The decision in Uber will have of course have huge implications for the rights of workers all over the country where it is estimated there are more than five million UK gig economy workers. However, this judgment does not automatically mean that everyone in the gig economy can be classed as a “worker”, but it opens the door for them to bring similar legal challenges, and provides a precedent.
If you need advice about the status of your employees, workers or self-employed, please contact our employment law team who are on hand to help.
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