The Uber Case: The Background, The Ruling, The Implications and The Reaction

In a landmark decision, the Employment Tribunal has ruled in favour of two Uber drivers who took a case against the billion dollar company

The Uber Case: The Background, The Ruling,  The Implications and The Reaction

Last Friday October 30, the Employment Tribunal made the landmark decision that the drivers of taxi giant Uber are to be classed as workers and not self-employed.

The test case, brought forward by James Farrar and Yaseen Aslam, forms one of the first proper legal reviews of job status in this part of the gig economy, and has the potential to form a new paradigm.

Background

Two drivers brought a claim against the renowned company, insisting that the terms and conditions of the arrangement they had with Uber meant that they should be classified as workers rather than self-employed and, as such, were entitled to national minimum wage, holiday pay, rest breaks and the protection of the whistleblowing legislation.

Kevin Gibson, specialist HR consultant at Croner, states: “This is a seminal case for Uber and other organisations who engage individuals on similar terms, therefore we expect a torrent of claims from other industries – the roads of the UK are awash with courier and food delivery firms operating similarly practices to the Uber model.“

What the ruling means

Under this ruling, Uber will have to adhere to paying and providing the workers’ statutory rights, including, but not restricted to: 5.6 weeks’ paid annual leave annually; a maximum 48 hour average working week; payment satisfying the National Minimum Wage, and more.

However, the Employment Tribunal did not find these claimants were ‘employees’ for Uber, therefore they will not meet that requirement to make certain claims such as unfair dismissal, or protection under the TUPE Regulations.

Amanda Beattie, litigation manager at Croner adds: “There is a plethora of case law regarding employment status; however the fundamental factor is that the Employment Tribunal will look at the agreement between the parties and the circumstances to assess whether status of the individual is consistent with being an employee, worker or self-employed contractor.

“Effectively they will look at the irreducible minimum of obligations; employment tends to need mutual obligations, whereas the worker definition tends to concentrate on the element of personal service by the individual.”

Uber had tried to argue that all of their 40,000 drivers were self-employed, but the tribunal has ultimately ruled in the claimant’s favour. Uber has said that it will appeal the decision.

Reaction

This case was dubbed by many as the UK employment law case of the year, and todays verdict has far reaching implications, while the GMB union described the ruling concerning the ride-hailing app as a “monumental victory” for the drivers.

Emma O’Leary, an ELAS consultant who specialises in employment law, said:

“The wait is over and it’s not too far from what we expected. The tribunal found that the drivers should in fact be classified as workers, rather than self-employed as Uber had claimed. They will now be able to claim backdated pay and holiday pay – given that Ubers says it has 40,000 drivers in the UK who now, as a result of this ruling, will be classified as workers their bill will be astronomical.

“This ruling will rip through the gig economy companies and open the floodgates for similar claims.

“For us as employment lawyers the ruling actually provides clarity on the muddy waters of employment status, which has long been the greyest area of employment law. Is someone self-employed or are they really an employee, or a worker? It’s important to note in this case, they are workers and not employees so they will not have protection from unfair dismissal, redundancy pay etc.

“Companies often fall into the trap of considering someone to be self-employed just because the ‘contractor’ is responsible for their own tax and NI – as we’ve seen today this on its own is not enough to prove there is no employment relationship. Of course, Uber are highly likely to appeal so it may not be over just yet.”

Do you hire freelancers? Here’s how to avoid an Uber-style situation. 


Clare Moore is content marketing and communications manager at Croner

Emma O’Leary is an employment law consultant with ELAS

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