Earlier this year, on the 19th of February 2021, the UK Supreme Court finally reached a verdict on their six-year-long court case challenging Uber’s drivers’ classification. The court announced their decision regarding United Kingdom Uber Drivers’ employment status, stating they must now be classed as workers, a change from their previous status as self-employed contractors.
This ruling came following an initial case from 35 Uber drivers who challenged their self-employment status back in 2016, arguing that the ride-share giant was too overbearing and controlling when allocating rides and fares.
This was based on several factors, including:
- Uber sets the fare, which meant that they dictated how much drivers could earn
- Uber sets the contract terms, and drivers had no say in them
- Request for rides is constrained by Uber who can penalise drivers if they reject too many rides
- Uber monitors a driver’s service through the star rating and has the capacity to terminate the relationship if, after repeated warnings, this does not improve
Under UK law, an individual doing paid work generally falls into one of three categories:
- An employee
- A Worker
- A self-employed individual
An employee usually has an express contract of employment and gets regular work they are obliged to do themselves. They are entitled to statutory employment rights and pay provisions such as notice, sick pay, holiday leave, and pay and parental leave and pay. They are also protected from unfair dismissal and discrimination. Whereas, a self-employed person is usually responsible for arranging how and when they work. They might engage directly or through a consultancy or personal service company. They invoice for the work they do. A self-employed individual may have some protections regarding health and safety and discrimination, but they do not have employment rights. The workers from Uber claimed that as the app decided when and where they worked, their current classification as ‘self-employed’ would be incorrect.
A worker is widely regarded as being midway between an employee and a self-employed individual under UK law. Unlike a self-employed individual, a worker must do the work personally and may not outsource it. However, on the other hand, a UK worker has minimal obligations to receive or undertake work compared to UK employees and is not eligible for the same protections as UK employees. Following the dispute raised by Uber drivers, ‘Worker’ was the court’s result as the most appropriate classification for the drivers. A decision that now means that thousands of Uber workers throughout the UK will now be entitled fully to employment rights such as rest breaks, holiday pay, auto-enrolment to a pension scheme, and minimum wage!
Uber’s regional general manager for northern and eastern Europe spoke on the matter, saying, “This is an important day for drivers in the UK! Uber is just one part of a larger private-hire industry, so we hope that all other operators will join us in improving the quality of work for these important workers who are an essential part of our everyday lives.”
Following the ongoing court case, many in the UK have now had to rethink what is considered ‘working time’ for gig workers, setting fresh disputes through the industry. Following the court ruling, the starting point in any worker-status discussion must now be the statutory definitions and a realistic assessment of the working relationship between employee and employer. Template contracts with stock clauses that give the appearance of a compliant, genuine self-employed arrangement will not be enough to ward off legal challenges moving forwards. Whilst the Court did not suggest that these contracts will no longer be relevant, the degree of control that any business has over their workers will most likely impact any future worker-status determinations, regardless of contract language. The Court’s decision does, however, align with the longstanding approach taken by HMRC, which favours examining the actual working relationship when making a worker-status determination.
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Throughout our diverse team, we have expert specialists who can support businesses with ensuring their employment contracts and payroll are legally compliant! We ensure we stay up-to-date with any new legislation that may affect these matters to safeguard any current and prospective clients again future discretions. If you have any queries regarding the issues raised above or any other relevant issues, get in contact with our expert consultants today! Get in touch by calling +44 (0)207 060 0835, emailing at firstname.lastname@example.org, or filling in a contact form below!