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Supreme Court: Uber decision

Paralegal, Craig Harvey

On Friday 19th February 2021 the Supreme Court handed down the decision in the case of Uber BV v Aslam. A highly anticipated case for those interested in employment law, this case concerned the question of whether Uber drivers should be classed as “workers”, or “self-employed” independent contractors.

Background

This case was originally brought by individuals who worked as private hire vehicle drivers using the Uber app, specifically two ‘test claimants’, Mr Yaseen Aslam and Mr James Farrar. The Uber app is designed to allow customers to request rides from drivers who have registered with Uber. The Claimants sought to argue that they were workers of Uber and that they should be afforded the associated employment rights accordingly. However, Uber contended that its drivers work for themselves as independent contractors, performing services under contracts made with passengers using Uber as their booking agent to facilitate the ride services.

The law

UK employment law recognises three different levels of employment status. Firstly, there is the “self employed”, who are afforded little to no employment law rights. Secondly there is the category of “worker“, a type of status originally derived from EU law and which affords certain employment rights, including paid annual leave and entitlement to the national minimum wage. The final category is that of “employee”, for which the highest level of protection is afforded, including the right not to be unfairly dismissed. Although there are statutory definitions of “worker” and “employee”, these do not take us very far when considering the question of employment status. Instead, employment status is determined by a number of tests which have been developed over the years through case law.

Decision

This case was originally heard at the Employment Tribunal (“ET”) level, following which it was decided that the claimants were “workers”. Uber’s subsequent appeals to the Employment Appeal Tribunal and the Court of Appeal were unsuccessful. Finally, Uber appealed to the Supreme Court (“SC”).

The SC dismissed Uber’s appeal and concluded that Uber drivers should be classed as “workers”. Helpfully, the SC broke down its reasoning into five key points:

  1. the remuneration paid to drivers for the work they do is fixed by Uber and the drivers have no say in it;
  2. the contractual terms on which drivers perform their services are set by Uber;
  3. despite the freedom that drivers have to choose when and where they work, once they have logged onto the Uber app, a driver has limited choices about whether to accept requests for rides, which again is dictated by Uber;
  4. Uber exercises a significant degree of control over the way in which the drivers deliver their services; and
  5. Uber restricts communication between its drivers and their passengers. It also takes active steps to prevent drivers from establishing any relationship with a passenger following a ride.

Commenting on the ET’s original decision, the SC found that on the facts of the case, the Tribunal was entitled to find that the drivers were workers and it went as far as to say that in its opinion this was the only conclusion which the ET could reasonably have reached.

Comment

In the judgment, the SC stated that at the time of the ET hearing in 2016, there were around 30,000 Uber drivers operating in London and 40,000 in the UK as a whole. It would appear that Uber may have quite a substantial number of holiday pay/national minimum wage back pay claims on the horizon. Unfortunately for Uber, this is not the only impactful consequence of the judgment. The SC also found that Uber drivers would be classed as working whenever they were logged into the Uber app, within the territory in which they were licensed to operate and ready and willing to accept rides. Therefore, they would be entitled to the national minimum wage during these working hours.

Therefore, the impact of this decision is likely to be wide ranging on companies with business models similar to that of Uber and those businesses operating in the “gig economy” may need to re-evaluate their working arrangements going forward.

More generally this case raises interesting points about contractual interpretation when considering the question of employment status. In particular, the SC highlighted that there is no absolute rule that terms set out in a contractual document represent the parties’ true agreement just because an individual has signed it. The SC went on to include that any terms which attempt to label the parties’ legal relationship or to exclude or limit statutory protections are of no effect and must be disregarded, which is something that employers should have in mind generally when seeking to label a relationship between them and a potential contractor.

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