18/11/2016by Emma Thomas

Uber loses tribunal decision over drivers' working rights

The Uber case has generated much publicity and media interest over the last few months and the recent finding at the preliminary hearing is significant not only for employment lawyers but for the general future of working patterns and employment rights.

 

So what was the Uber case about and why the big fuss?

 

Uber, the taxi app, has become increasingly popular over recent years.  Uber is part of what is known as the ‘gig economy’ which is a growing trend.  This is essentially where organisations contract with independent workers for short term engagements.  Uber has a system which allows customers to use a smartphone app to order a taxi and pay the fare.  Uber has so far treated its taxi drivers as being self-employed which means they do not have the protection of some employment rights enjoyed by employees and workers.   

 

In this case, a claim was brought by 19 Uber drivers against Uber.  The two lead claimants are Mr Aslam and Mr Farrar but all 19 claimants are currently pursuing claims against Uber for holiday pay, failure to pay the National Minimum Wage and unlawful deduction from wages.  The claimants argued that they are workers and not self-employed and therefore should be entitled to holiday pay and to be paid the national minimum wage.

 

By way of background, whilst workers do not have the same rights as employees, workers do benefit from some employment law protection such as the right to holiday pay and the right to rest breaks.

 

To be a ‘worker’ for the purposes of employment law, the following must generally exist:

 

  1. There must be a contract of employment; or
  2. Any other contract must exist (whether express or implied) whereby the individual is required to carry out the work personally for a party who is not a client or customer of any profession or business undertaking carried on by the individual (in other words, in the example of Uber, Uber must not be the customer of the taxi drivers).

 

Uber argued that the taxi drivers were self-employed and therefore not entitled to workers’ rights. 

 

The tribunal disagreed and held that the individuals were in fact ‘workers’.  Amongst other considerations which led to this decision, the tribunal found the following:

 

  • Uber would recruit and interview drivers, although Uber described this as ‘onboarding’;
  • Uber had a performance management process for drivers which was based on a rating system where customers were able to rate drivers.  If the driver’s ratings were low they would be required to carry out training and in the event that the ratings continued to be low their contracts would be terminated;
  • Uber has a disciplinary process albeit that it is called the ‘Driver Offence Process’;
  • Uber sets the fare and holds the customer information.  Uber does not share all of this information with the driver but provides the first name of the customer and sets the route for the destination which the driver is not to deviate from;
  • Uber handles complaints by passengers.

 

The tribunal held that despite what the contract said and the terminology that Uber used to define the way in which it engaged with the drivers, the reality of the situation was that they were in fact workers.

 

The importance of this for employers is that it is important to not only look at what the contract says but also to look at the reality of the situation and how organisations treat individuals who carry out work for or on their behalf. 

 

This judgment was a preliminary decision on employment status and the full hearing will be listed to consider the actual compensation due to the individuals.  However, Uber have stated that it is intending to appeal this decision.  It should also be noted that as this decision was by the Employment Tribunal and is therefore a first instance decision it is not binding on other cases.  The finding was also fact sensitive and therefore each case should be assessed on its own facts. 

 

This case has been a much awaited case in employment terms as the ‘gig economy’ and atypical working patterns are on the increase.  The Government has committed to responding to this debate and the Business, Energy and Industrial Strategy Select Committee has launched an inquiry into the future world of work including a review of agency workers, the self-employed and zero hours contracts.

 

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