Uber drivers found to be workers
The question of whether an individual is a worker or self-employed is often a difficult one to answer. It depends on a number of factors and will involve examination of the particular working relationship. However, the difference is important because the rights that individuals have depend on their status. Workers have rights that self-employed individuals do not, in particular, to be paid the National Minimum Wage, the right to paid holidays, whistle-blower protection and protection from unlawful deductions from wages.
The Supreme Court has reached a decision in relation to the long running claims against Uber, upholding the Employment Tribunal’s (ET) decision that Uber drivers are workers. Uber had appealed against the ET’s decision and the case had made its way through the Employment Appeal Tribunal (EAT) and the Court of Appeal (CA) before reaching the Supreme Court (SC).
A number of drivers had issued claims in the ET for failure to pay the National Minimum Wage, failure to provide paid annual leave and suffering a detriment on the grounds of whistleblowing. To succeed in those claims, the drivers had to be “workers” for the purposes of employment legislation.
Uber’s business model operates via an app, downloaded by passengers through which they request a ride. The app identifies the nearest available driver who is logged into the app and the driver has ten seconds to decide whether to accept the request. Once the driver accepts, the trip is assigned to the driver and the booking confirmed to the passenger.
Uber argued that the drivers are self-employed. There is a written contract between the company and the drivers. However, the SC found that the starting point when deciding whether an individual is a worker is not the terms of a written contract. A company is often in a position to dictate the terms of a written agreement, and the individual has little or no ability to influence those terms. The starting point is to decide whether the individual falls within the definition of “worker” in the legislation, “irrespective of what had been contractually agreed”.
To decide whether an individual is a worker, all of the facts of the individual case should be considered. A key factor is the degree of control exercised by the company over the work performed by the individual. The greater the extent of the control, the stronger the argument that the individual is a worker.
In this case, the drivers were free to choose when, how much and where to work. The written contract only applied on each occasion when they chose to log on to the Uber app. However, the SC considered the following five factors in this case important:
- Remuneration paid to drivers for the work they do is fixed by Uber and the drivers have no say in it. Uber sets the fares, and the driver is not permitted to charge the passenger more than the fare calculated by the app. Uber also has the right to decide whether to fully or partially refund fares to passengers in the event of a complaint by the passenger about the service provided by the driver.
- Drivers are required to accept Uber’s standard written agreement and the terms on which they transport passengers. Drivers had no possibility of negotiating any different terms.
- Once a driver is logged on to the Uber app, Uber has discretion whether to accept or decline any request for a ride. The driver is not informed of the passenger’s destination until the passenger is picked up, and so the driver has no opportunity to decline a booking on the basis that they do not wish to travel to that location. A driver who declines three requests in a row is automatically logged off the app and shut out for ten minutes.
- Although drivers provide their own car, Uber vets the type of car that may be used and the technology used for the service is wholly owned and controlled by Uber. When a ride is accepted, the app directs the driver to the pick-up location and to the passenger’s destination. The driver bears the financial risk of any deviation from the route if the customer complains. Passenger ratings of drivers are used by Uber to manage performance and as the basis for terminating the relationship if the driver fails to maintain a specified average rating.
- Uber takes active steps to prevent drivers from establishing any relationship with the passenger extending beyond an individual ride. Neither has the other’s contact details and drivers are prohibited from exchanging contact details with a passenger or contacting them after the trip ends other than to return lost property. Fares, payment of drivers and handling of complaints are all managed by Uber.
The SC found that these factors taken together indicate that the service performed by drivers is “very tightly defined and controlled by Uber”. The ET was therefore entitled to find that the drivers are workers. Indeed, that was “the only conclusion which the tribunal could reasonably have reached”.
Uber had argued that if the drivers were workers, they were only working during periods when they were actually driving passengers to their destinations, or alternatively only from the point when the driver accepted a trip request. The SC disagreed. It upheld the decision of the ET that the driver is a worker when they were logged on to the app, within the territory in which they are authorised to work; and able and willing to accept assignments.
The issue of worker status has attracted a high level of media attention over the last few years, with cases against companies including Uber and Pimlico Plumbers hitting the headlines. With the emergence of the gig economy, where individuals are engaged on a flexible, ad-hoc basis, the issue has become increasingly important.
The potential impact of this case on Uber should not be underestimated. At the time of the Employment Tribunal hearing in 2016, there were around 30,000 Uber drivers operating in the London area and 40,000 in the UK as a whole. The SC’s decision could potentially mean significant claims for arrears of pay in respect of national minimum wage and holiday pay.
It is important to remember that this judgment does not mean that the drivers are “employees”. This does not, therefore, give drivers the additional rights that employees have, such as to claim unfair dismissal.
25 February 2021
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