Worker Status & Supreme Court Decision for Uber Drivers
The Supreme Court has handed down its long-awaited judgment in the case of Uber v Aslam & others. The decision means that these drivers are entitled to worker status rights including paid annual leave and the UK minimum wage. We review the long-running case and what this means for employers putting contracts in place.
Background & Worker Status Claim
Mr Aslam and others brought a claim against Uber for the national minimum wage, holiday pay and other rights associated with being a worker. Uber contested the claims, stating that the Uber drivers were all individual self-employed contractors working for themselves. An employment tribunal concluded that they were workers, and did have the right to bring the claim.
Uber appealed unsuccessfully to the Employment Appeal Tribunal and then to the Court of Appeal. Uber finally appealed to the Supreme Court, and in a unanimous decision, some 7 months after the case was heard in the Supreme Court, the Court has handed down its judgment and concluded that Uber drivers were ‘workers’ for the purposes of Employment Law.
In short, the Supreme Court have concluded that;
- 1. Uber drivers are workers as defined by Employment Rights Act 1996 and entitled to the relevant rights.
- 2. Uber drivers are entitled to be paid NMW from the moment they log on to the App, until they later log off.
“Subordination and dependency” was the key phrase which stands out in the judgment. What the court regarded as the factual and real relationship between Uber and the driver overrode any contractual paperwork in place. Some of the key facts in the case were;
- 1. Uber operated a ‘driver offence process’ which could lead to warnings and deactivation on the App
- 2. Drivers were unable to contract out their work
- 3. Uber controlled the fare price
- 4. Uber often controlled often the route to take
- 5. Uber handled any complaints
- 6. When logged on drivers had to accept work or face repercussions
By considering the real relationship between the parties, the court decided drivers were subordinate to and dependent on Uber. The relationship was therefore inconsistent with being truly self employed and the drivers were deemed to be ‘workers’ and entitled to the accompanying employment rights.
The Supreme Court wholly rejected the idea that Uber was a provider of technology services and payment collector and a booking agent only, or the idea that the contractual paperwork prepared by Uber made clear the true arrangement between the parties. Instead, it followed the modern approach to considering any contractual relationship by looking beyond the paperwork, and at the actual reality of the situation.
Repercussions of the Judgment
Uber drivers are now entitled to holiday pay, both looking back over their time working for Uber, and moving forward. They are also entitled to receive the National Minimum Wage from the period of logging on to the App, to logging off. To be clear, the drivers are entitled to the NMW after deducting the cost of petrol, insurance etc as these would be expenses related to the work. Either Uber would have to meet these expenses, or they should be taken into account for the purposes of calculating the NMW.
These are two immediate costs which will need to be considered. HMRC will now no doubt investigate the situation in terms of NMW breaches. It also needs considering that there are some 40,000+ Uber drivers. Calculating the actual cost for each individual is a ridiculously long and complicated task. Calculating the total sum is near impossible at this stage. It seems unlikely that Uber can remain operating in the UK with its existing business model, which has now been deemed to be unlawful, and will either require substantial changes moving forward, with much greater increased fares and costs, or cease operating.
Worker Status & Lessons for Employers
Employers cannot simply rely on the wording of a contract. The Tribunals and courts will look beyond what is written down, and will examine the reality of the working relationship. It means that organisations will now find it harder to ‘dress up’ one type of relationship as something else. Simply put, they will not be able to rely on a signed document being treated sacrosanct when determining employment status. It also means that companies cannot use simple ‘off the peg’ contracts for individuals, but will need to spend time creating bespoke documents which mirror the reality of the situation.
There are differing views regarding Uber’s particular business model, but many hope the Supreme Court decision will reduce the exploitation of individuals working within the ‘Gig Economy’. It should certainly mean that many individuals now receive the correct compensation for their work and are afforded the employment rights intended for them.
If you require advice on your contracts, or wish for them to reviewed in light of this worker status judgment, get in touch with the Wirehouse HR & Employment Law team on 03333 215005.