Supreme Court rules that Uber drivers have workers’ rights

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In a ruling which could pave the way for millions employed in the ‘gig economy’, the Supreme Court has upheld an Employment Tribunal (ET) decision that Uber drivers should be classed as workers and are therefore entitled to a range of legal rights such as the minimum wage and paid holiday.

In Uber BV and ors v Aslam and ors, the Supreme Court unanimously dismissed Uber’s appeal in which the company argued that its drivers are self-employed ‘partners’ and therefore not entitled to basic workers’ rights. In doing so, the Court emphasised that ‘worker’ status is determined by the actual relationship rather than by the contractual terms.

Uber drivers own their own cars and are free to choose when they make themselves available to accept bookings. However, in making its judgment, the Court also considered the facts that Uber set rates of pay and contract terms of their drivers whilst restricting their freedom to choose their work patterns once they logged into its smartphone app. It considered that Uber controls its service delivery model and the extent of communication between its drivers and their passengers.

In the original ET actions brought by Uber drivers, their claims included the company’s failure to pay them the national minimum wage or provide paid annual leave. However, in order to bring their claims, the drivers had to be ‘workers’ in accordance with the terms of the Employment Rights Act 1996, the Working Time Regulations 1998 and the National Minimum Wage Act 1998.

Uber’s position at the Tribunal was that it simply provides a technology platform to facilitate private hire vehicle (PHV) service provision. Uber contended that it was not the service provider itself but instead acted merely as an agent rather whilst the contract was made directly between driver and passenger for each journey undertaken.

Taking into account the heavily controlled working conditions of the drivers, the ET subsequently found that, for the purposes of the relevant legislation, the drivers were workers and that their contracts did not reflect the reality of the working relationship. The ET also noted that Uber accepted the risk of loss and decided upon fare disputes and refunds. Following unsuccessful appeals by Uber to the Employment Appeal Tribunal and the Court of Appeal, a final appeal was heard by the Supreme Court.

The Supreme Court found that the purpose of the relevant legislation pertaining to the definition of workers is to give protection to vulnerable individuals who have little control over their pay and working conditions and are dependent on the person or organisation who exercises control over their work. The legislation prevents employers contracting out of statutory rights.

A tribunal should therefore examine the reality of the relationship between the parties, and not be bound by what the documentation states. On this analysis, the tribunal was entitled to find that Uber drivers are ‘workers’, not self-employed subcontractors.  The drivers are ‘workers’ from the moment they switch on their apps, and are available for work in their area, to the time when they switch their apps off at the end of the day.

This means that Uber drivers are entitled to claim minimum wage (including backpay for minimum wage), with their minimum wage claims being based upon their entire working day, not just when they had a rider in their cabs. They can also claim 5.6 weeks’ paid annual leave each year, and will have whistleblowing and similar rights.  This judgment does not, however, give them ‘employee’ rights, such as the right to a redundancy payment or to claim unfair dismissal.