The Uber case has created a furore. In reality, the case does not establish new principles, but rather interprets existing law.
Two Uber drivers, deemed to be self employed by Uber's contracts, raised a claim to determine if they are workers within domestic employment legislation and thus entitled to certain corresponding benefits.
The heart of the case concerns the blurred lines of employment status. What perhaps adds the impression of complexity is that the decision has been made within the landscape of self-employed independent contractors otherwise now known as the ‘Gig Economy’, which offers the perceived ideal of a low-cost flexible workforce.
The Employment Tribunal found in favour of the drivers and held they are not self-employed independent contractors as their contracts said and as Uber submitted. They are, in fact, “workers” under UK employment law.
It is important to state from the outset that this will not be the last we hear of this. Soon after the Tribunal gave their decision, Uber issued a statement confirming they would be appealing the decision. It is possible that things may change and it goes without saying that technological or app based businesses that rely on flexible short-term labour should be keeping an ear to the ground for any developments.
How it happened
Uber fell foul of the Employment Tribunal during their attempts to persuade the Tribunal that it was merely a technology platform provider whose drivers are self employed contractors providing a service to customers. They maintained they are not a transport provider.
These submissions from Uber were found to be wholly unconvincing.
The lengths which Uber went to convince the Tribunal that the two drivers are self-employed independent contractors did not impress the Tribunal. They felt that the company’s submissions, mission statements and contracts were designed to misinterpret the true nature of the relationship. So much so, they felt it appropriate to quote from Shakespeare play Hamlet to describe the emphasis Uber placed on the operation of their contracts - "The lady doth protest too much, methinks".
It was found, simply, Uber is a transport business that engages drivers as workers to that end. Drivers work for Uber under the definition of a worker found at section 230 (3)(b) of the Employment Rights Act 1996.
In reaching this conclusion, the judgement noted, among other factors that, drivers can only accepts rides strictly on Uber’s terms. Further, they are incapable of any self-promotion or growth as a truly self employed individual would i.e. they promote Uber as the business only. Uber’s policy is to indemnify the drivers if a fare is not paid. They operate a disciplinary policy if drivers fail to accept rides under certain circumstances. They monitor performance. They handle complaints against drivers. They set routes for drivers.
The above is inconsistent with the relationship of a self-employed independent contractor.
What can we learn from this?
To summarise – you cannot paint stripes on a horse and call it a zebra.
Businesses operating similar models should note that the Tribunal has demonstrated that they have no trouble in scratching beneath the surface of any well drafted contract, business model and/or mission statement to unveil the practical reality of any employment relationship.
In this case, it was decided that all aspects of the business clearly demonstrated drivers are work for Uber. It was memorably remarked during the judgement that, “The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common platform is faintly ridiculous.”
In reality, we have a company and we have workers whereby they undertake to personally perform a service pursuant to contractual terms and conditions.
Similar businesses must take a realistic approach as to how they classify their own consultants or contractors. Once they take away all surrounding camouflage, what is the true nature of the contract? It is perhaps prudent to view Uber as a cautionary tale and a reminder that you must sensibly review and audit each contract to ensure that it adequately reflects the service and true relationship.
The Technical Part
“Workers” are legally entitled to many benefits, which self-employed contractors are not.
These include 5.6 weeks' paid annual leave per year (equivalent to 28 days' leave for a full time worker, including Bank Holidays); a maximum 48 hour average working week; statutory minimum daily and weekly rest breaks; the national minimum wage and national living wage; protection under the 'whistleblowing' legislation; protection against unlawful discrimination; the right not to be treated less favourably if they work part time; and protection against unlawful deductions from wages.
The granting of such rights will come at a considerable cost to any business that is currently treating individuals as self-employed.
However, workers are not entitled to the totality of employment rights, and do not have the same rights as employees, who are entitled to additional statutory employment rights such as protection from unfair dismissaland statutory redundancy payments.
If you have any further concerns then please do not hesitate to get in contact to seek further advice.
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If you would like to discuss an employer's duty to make reasonable adjustments, please contact one of our employment team to discuss.