The Supreme Court has handed down a landmark judgment which confirmed that Uber drivers are workers and not independent contractors.
Uber argued that the drivers were independent contractors, but the Employment Tribunal disagreed and held that the drivers were “workers” under employment legislation. This meant that Uber were obliged to pay their drivers at least national minimum wage and allow them to take paid annual leave, as well as offering other protections, such as from unauthorised deductions from pay, discrimination or being subjected to a detriment for being a whistle-blower.
The Employment Appeal tribunal, the Court of Appeal and now, the Supremen Court, all agreed.
Of particular importance, the Supreme Court looked at the rules regarding how a oarty can determine whether a person is a self-employed contractor or a worker.
The Supreme Court held that when determining worker status, the starting point should not be the written agreement, because the true picture of a working relationship may not be fully represented by a written agreement, even where it has been read, understood and signed by both parties. Therefore, the real situation and conduct of the parties must be considered.
The Supreme Court judgment sets out five key factors for determining worker status, all of which focused upon the degree of control Uber exercised over the drivers:
Uber had full control over how much the drivers are paid for the work they do - they set fares and decided when refunds should be made in response to complaints.
The drivers were not able to negotiate the terms of their appointment.
Uber drivers could not select which jobs to accept and so Uber exercised full control over their jobs. controls the drivers’ choice about whether to accept or decline passenger journey requests once they have logged on to the app.
Uber provided route guidance for travelling to the fare and for the journey that they should take - a driver could receive negative feedback if they deviated from the recommended route.
Uber controlled all the communication between the drivers and the passengers and handled all complaints.
Whilst the Uber case clearly has implications for those working in the gig economy, it does set a clear precedent that Tribunals should look behind the written contract and look at the reality of the situation.
Businesses should review their relationships with contractors to ensure their contracts accurately reflect the reality of the relationship. Contact us today to discuss your position.