Last week the Supreme Court reached its decision on the Uber v Aslam and others case and confirmed that the Uber drivers were ‘workers’ rather than self-employed. This case was first in the employment tribunal in 2016, followed by an appeal in 2018. This was then followed by the Supreme Court decision which is the final court of appeal in the UK.
What is the Uber case?
The case began when two Uber drivers James Farrar and Yaseen Aslam took Uber to court on behalf of a group of 19 others who argued that they were employed by Uber, rather than working for themselves.
The courts ruled that the drivers are ‘workers’ from the moment they switch on their apps, and are available for work in their area, to the time they switch their apps off at the end of the day (or for a break).
They also considered that:
- Uber sets the fares for each ride the drivers carry out and the drivers are not permitted to set their own prices as they would if they were self-employed.
- Uber sets the terms and conditions of using its service.
- Drivers face penalties for cancelling or not accepting rides – sometimes preventing them from working.
- Uber has significant control over the way that drivers work, as they face a rating system. If a drivers’ Uber rating falls below a certain level, they face penalties or termination of their contract.
- Uber takes active steps to prevent drivers and passengers from having an agreement outside of the Uber app.
This means that Uber drivers are able to claim minimum wage with that rate being based on their whole working day and not just when they had a customer in their car. Backpay for the drivers can be claimed for up to two years or £25,000 whichever is larger in the employment tribunal and up to six years in the County Court. They can also claim 5.6 weeks paid annual leave every year. A costly time for Uber!
What does this mean in practice?
Companies should ensure that any written agreements they have reflect what actually happens in practice as a tribunal will examine the reality of the arrangement in practice rather than rely on what the written documentation says.
If it is likely that an individual is a ‘worker’ they will be entitled to getting the National Minimum Wage, protection from unlawful deduction of wages, the statutory minimum level of paid holiday (5.6 wks), the statutory minimum length of rest breaks, to not work more than 48 hours on average or to opt out of this if they wish, protection against discrimination, protecting for whistleblowing and not to be treated less favourably if they work part time. However, they wouldn’t be able to claim unfair dismissal, be entitled to statutory redundancy pay or minimum notice periods if they are being dismissed.
The elements that a tribunal will look at to ascertain self-employment, worker or employee status are:
- personal service – to be an employee, the individual must be required to provide their services personally, rather than being able to send a substitute to carry out the work in their place;
- mutuality of obligation – to be an employee, the employer must be obliged to provide the individual with work and the individual must be obliged to do that work in return for an agreed salary or wage, and on terms and conditions laid down by the employer; and
- control – to be an employee, the employer must exercise a sufficient degree of control over the manner in which the individual carries out the work, consistent with an employer/employee relationship.
If all three of these elements are met, the individual will be an employee, less than 3 they are likely to be a worker and if none of these elements are met the individual is self-employed. It might be timely to review your arrangements and practices in light of this decision!
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