The highly anticipated case involving Uber and the employment status of their drivers has been concluded at the Court of Appeal. With what must seem like an early Christmas present to Uber drivers, the Court of Appeal decreed they are workers and, therefore, entitled to workers’ rights – such as sick pay, rest breaks and paid holiday.
The background to the Court of Appeal’s ruling
An employment tribunal back in 2016 originally found Uber’s drivers to be workers. And the company had hoped that the Court of Appeal would overturn this decision and the resulting entitlement to back-paid benefits incorporating minimum wage and holiday pay.
You can see why Uber is going to such lengths to reach a decision which goes the company’s way. It has been reported that entitlements could be as much as £20,000 per driver. So with 45,000 drivers in London alone, the final resolution of this case will have a major impact on the company’s bottom line. Yesterday’s (Wednesday 19th December) decision upholds the previous ruling and has found the drivers to be workers and not independent contractors.
However, the story does not end here. Uber has been granted the right to appeal to the Supreme Court.
Uber’s argument has been that the arrangement they have with their drivers is “typical of the private hire industry”. This assertion suggests that their practices are not uncommon for the gig economy. So the result of the Court of Appeal hearing sets a precedent which will have major implications for future cases concerning the gig economy. It follows similar verdicts from the Pimlico Plumbers and Addison Lee cases.
The wider impact will spread far beyond Uber
Indeed, this Uber ruling will be of great concern to any employers working with consultants or self-employed contractors, given the precedent it sets.
The wider context for this ruling is a change in culture for our UK employment landscape. The government has recently been consulting over the whole area of employment classification, following Matthew Taylor’s report last year. Just this week, the department for Business, Energy & Industrial Strategy released its Good Work Plan, detailing how it intends to upgrade workers’ rights.
Currently, unscrupulous employers may have a motivation to make low-paid or otherwise vulnerable workers accept self-employment. This is because it helps them to drive down costs and responsibilities, especially by saving on the employers’ National Insurance Contributions. So we say the sooner this is changed, the better!
As part of the Good Work Plan, the government is also planning to improve the guidance and online tools available to help understand employment status. Its new test for determining whether someone is a worker or self-employed will place greater emphasis on control and less emphasis on obligations of personal service. Currently this test can be defeated by the inclusion of a contractual, unfettered right to send a substitute – a right which is rarely used in practice.