The Uber employment case: What it means for freelancers, workers and their employers
Taxi-app company Uber recently received its long-awaited Employment Tribunal judgment
on claims raised by 19 of its drivers. The Tribunal found that Uber drivers are entitled to minimum wage and holiday pay, along with a number of other rights which apply to workers who are not genuinely self-employed.
The decision does not mark any change in the law, but it has received widespread interest as it focuses on a technology company at the heart of the ‘gig economy’, in which customers hire freelance workers for occasional work. Freelancers, of course, are very important in publishing; as the Harbottle & Lewis Independent Publishing Report recently revealed
, the great majority of IPG members (93%) employ them in the course of their business, most commonly in editorial and design roles.
The Uber drivers claimed that they are not self-employed but are in fact ’workers,’ and are therefore entitled to additional employment rights, notably paid holiday, rest breaks and the national minimum wage. Uber’s defence that the drivers are genuinely self-employed was rejected. The Tribunal considered the contractual structure adopted—under which the driver did not contract with Uber to provide the driving service, but with the passenger—to be a sham which did not correspond with reality. This left the Tribunal free to look at the reality in terms of control over the driver and to disregard entirely the provisions of the contracts which sought to avoid employment or worker status.
The Tribunal’s decision hinged on two main findings. Firstly, the Tribunal scrutinised the nature of Uber’s business. Uber’s description of itself as a ‘technology company’, and portrayal of its London operation as a mosaic of thousands of small businesses linked by a technology platform, were described by the Judge as “faintly ridiculous”. The proper analysis is that Uber is running a transportation business—and holds a Private Vehicle Transportation Licence for London—which recruits and uses the drivers as workers.
Secondly, the Tribunal found that Uber exercises a level of control over its drivers that exceeds any regulatory requirements; for example, the imposition of numerous conditions on the drivers including obligations not to speak negatively about Uber’s business in public and Uber’s use of driver ratings to ‘weed out’ poor performers. This level of control is incompatible with genuine ‘self-employed’ status. Uber was criticised for employing “fictions, twisted language and even brand new terminology” to portray its drivers as self-employed.
Uber will appeal the decision to the Employment Appeal Tribunal, and following its decision there might be further hearings in the Court of Appeal and ultimately the Supreme Court. Any payments due to drivers will not be calculated until that process is over. The eventual outcome of this case will have considerable impact on Uber’s other 40,000 drivers, as well as similar business models.
This case serves as a useful reminder that employment law does recognise a category which sits between employee and the genuinely self-employed person who is running his or her own business. Some employment rights attach to this category, like minimum wage, annual leave and weekly working time limits, but others, like unfair dismissal rights, do not.
It is important to keep in mind that employment status cases are very fact specific. The law has not undergone any major change to allow this decision to have been reached: the tests which have been applied are fundamentally unchanged since they were clearly formulated more than 40 years ago. This unfortunately means that the need of businesses for certainty on this issue is unlikely to be satisfied, and that employers, including publishers engaging with freelancers, must continue to keep the reality of their working arrangements under review to ensure that they do not fall foul of unexpected liabilities.
Yvonne Gallagher is a partner in the employment group at Harbottle & Lewis. She advises organisations across a range of industries and sectors on employment structures and status issues and has successfully defended Employment Tribunal cases asserting employment status.