Are Ubers drivers considered to be workers?
Christopher Meaden, Solicitor in Lindsays’ Employment team, discusses the decision from the Court of Appeal, which has considered on appeal whether Uber drivers are workers (rather than self-employed) and entitled to basic employment rights. The judgment was published on 19 December 2018.
With the growing number of varied working arrangements being used by employers, clarifying whether someone is a worker or not can often be difficult.
The term ‘worker’ encompasses employees and individuals without a contract of employment, who provide services to an employer personally and are economically dependent on the employer’s business. Determining whether an individual is a worker is crucial to establishing entitlement to the following rights:
- protection from unlawful deduction from wages;
- national Minimum Wage (NMW); and
- paid annual leave.
Tribunals will look at all of the facts before reaching a decision on employment status, however the most common factors that point towards an individual being classified as a worker are:
- personal service – is the individual required to carry out the work or do they have a right to send a substitute (the latter is indicative of being self-employed);
- mutuality of obligation – the expectation that an individual will accept work and the employer will provide work;
- the extent and degree of control the individual is subjected to when taking instructions and deciding how the work will be performed.
In 2016, numerous Uber drivers brought claims for unlawful deduction of wages (failure to pay NMW) and for failure to provide paid annual leave. Two of the drivers, Mr Farrar and Mr Aslam, were selected as test claimants.
The Employment Tribunal concluded that although the contract classified the drivers as self-employed it did not reflect the true working relationship between the drivers and Uber. The tribunal held that the drivers were workers provided they were:
- in the territory in which they were authorised to drive;
- signed in to the Uber app; and
- ready and willing to accept bookings.
Uber appealed to the Employment Appeal Tribunal (EAT) which upheld the tribunal’s original decision and dismissed the appeal. The EAT rejected Uber’s argument that they are a technology platform simply acting as an agent for drivers, putting them in contact with passengers and not a provider of taxi services. Uber appealed to the Court of Appeal.
The Court of Appeal dismissed the appeal by majority and agreed that the drivers are workers when they had the app turned on and were ready and willing to accept fares.
One of the judges, Lord Justice Underhill, disagreed with the decision and commented that in his view, Uber has simply put in place a commercial relationship with drivers rather than a sham one. It is expected that Uber will appeal to the Supreme Court (the final court of appeal in the UK).
Christopher Meaden, a Solicitor in Lindsays’ Employment team commented;
“This case confirms that tribunals may look beyond the terms of an agreement to clarify the true employment relationship between the parties. Where the terms are non-negotiable and parties are in an unequal bargaining position, acceptance of ‘self-employed’ terms is not conclusive of the nature of the relationship and doesn’t preclude a finding of worker status.
“Being realistic about employment status is therefore vital to minimise the risk of claims and hefty back pay awards.
“As part of the government’s plans to improve the rights of employees and workers (reported in the ‘Good Work Plan’ on 17 December 2018), it intends to legislate to improve the clarity of employment status tests, so workers and employers have a better understanding of their employment status and rights.”