Posted by Kate Benefer, Partner
Landmark Uber tribunal impacts UK employment law
Uber has hit the headlines once again with a number of drivers calling into question their rights as an employee. An employment tribunal next week will determine whether these drivers are actually employees rather than self-employed. The decision could have a huge impact on flexible business models.
The workers are arguing that they receive below minimum wage after the deduction of expenses and commission and that this is unlawful. They are also claiming rights to holiday pay.
When deciding whether a person is self employed, a worker or an employee, the tribunal will look further than the words in the contract between the parties and take into account what happens in reality – is the person treated like an employee.
If the Uber taxi drivers are found to be employees they would benefit from employment rights leading to a huge cost for Uber, who have thousands of drivers working for them.
What could this mean for the so called ‘gig economy’?
It would seem that the ‘gig economy’ has arrived creating an environment where temporary short-term positions are common. Several well-known companies have business models based on this approach giving both parties flexibility in the work done but avoiding employment law rights.
The outcome of the Uber case may have a dramatic effect on businesses with a similar staffing model. If Uber successfully defend the case, it is likely to pave the way for other companies to confidently proceed with that model which will continue to develop. If the taxi drivers are successful, Uber may have to make drastic changes to the way their business is run. We could also see a rise in the number of tribunal claims for those in a similar position to the taxi drivers.
Our view is that as business continues to push towards an increasingly flexible workforce model with reduced cost and regulation, the traditional employer/employee relationship will have to change. How far and how quickly will depend on at what point workers stand their ground or refuse to embrace different ways of working. The erosion of basic employment law rights is at the core of this debate. We await next week’s decision to see how this case will develop and how it will impact UK employment law.
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