Uber taxi drivers are workers

The Supreme Court has handed down its decision in Uber v Aslam, upholding the decisions from the Employment Tribunal, Employment Appeal Tribunal and Court of Appeal.  This case was summarised helpfully by Lord Legatt of the Supreme Court,

“The central question on this appeal is whether an employment tribunal was entitled to find that drivers whose work is arranged through Uber’s smartphone application (‘the Uber app’) work for Uber under workers’ contracts and so qualify for the national minimum wage, paid annual leave and other workers’ rights; or whether, as Uber contends, the drivers do not have these rights because they work for themselves as independent contractors, performing services under contracts made with passengers through Uber as their booking agent.” Lord Leggatt

Decision

The Supreme Court unanimously upheld that Uber drivers are ‘workers’ for the purpose of rights under the Employment Rights Act 1996, the Working Time Regulations 1998 and the National Minimum Wage Act 1998. In dismissing Uber’s appeal, the Court emphasised it is wrong to use the contract as the starting point. The correct approach is to consider the purpose of the legislation which is to give protection to vulnerable individuals who are in a subordinate and dependent position in relation to a person or organisation who exercises control over their work.

The Court focused on five factors when making its decision. It noted that Uber:

• dictated the rate of pay

• dictated the contract terms

• constrained drivers’ freedom to choose when to work once logged in to the app

• controlled the way in which the service was delivered; and

• restricted its drivers’ ability to communicate with passengers.

The Court also confirmed the Employment Tribunal’s finding that the drivers’ working time includes all of the time that they are in the territory in which they are authorised to work, logged into the app, and ready and willing to accept work.

Impact

Some of the main points for employers to focus on from this are:

• How much control does the employer want over those providing the personal service? The more it looks like a hierarchical relationship, the more control there is from the employer and subordination there is from the contractor, the more likely it is that the individual will be a worker, or possibly an employee.

• The contractual terms will not save the employer: once control, subordination and dependency have been found on the facts, the statutory protection (for example, national minimum wage, working time or whistleblowing protection) is likely to be triggered and should protect those vulnerable workers.

• This case helps to clarify the status of workers, particularly in circumstances similar to Uber drivers, but it is still an area that employers need to focus on. This is especially so with the pending IR35 rules due in April this year. Employers do not want to find themselves on a similar litigation journey as Uber and so need to think carefully about those they engage and the correct status of those individuals.

Although every case is decided on its own facts, this decision could have an impact not only on the issue of status but also working time and therefore also questions on national minimum wage.

If you require advice on this topic or any other employment law issue, please contact Linda Wilson.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.