Posted by Kate Benefer, Partner
Uber loses employee rights case – but what does this mean for UK employment law?
This afternoon an employment tribunal gave its judgment on the high profile case against Uber, which has been awaited with bated breath by many companies who use freelance hires in the ‘gig economy’.
The tribunal has ruled that Uber drivers are ‘workers’ and not ‘self-employed’, this means that Uber drivers will be entitled to:
• 5.6 weeks paid annual leave
• the national minimum wage
• rest breaks
• protection against discrimination and detriment for whistleblowing and other statutory protection.
As workers, the drivers are not entitled to bring a claim for unfair dismissal, redundancy pay and do not have protection under TUPE.
Why has this decision been reached?
In a damning judgment against Uber, the employment judge castigated Uber’s legal submissions, saying that the documents and evidence of Uber did not accord with the reality of the relationship between Uber and the drivers, that Uber is not a ‘platform’ to which interconnected drivers connect ply their individual trades, but is a business in which its drivers are required to do the work ‘personally’ i.e. not substitute someone else to drive on their behalf, and that they were under the operative control of Uber once agreeing to a hire.
What does the Uber case mean for employment law?
This high profile case means that disputes are now more likely if your workforce uses self-employed individuals who, when they work for your company, are required to provide their own labour and work under a degree of control. This issue is in the spotlight, with HMRC crack-downs and government interest. So be warned that just because your company may classify workers as self-employed, an employment tribunal or HMRC may not agree.
A brief summary on ‘status’
• An ’employee’ is an individual who has entered into or works under a contract of employment where there is an obligation on the employee to work, the employer to provide work, and a degree of control over the way the work is done.
• A ‘worker’ is an individual who has entered into or works under a contract of employment, or any other contract, whereby the individual undertakes to do or perform personally any work or services for another party to the contract – but not where it is a client/customer relationship.
• A ‘self-employed’ person works under a contract for services – can substitute someone to do their job and are under little control over how, where or when they undertake the work.
We think this case will be appealed, although to be successful there will have to have been a major error of law, which does not appear to have been the case. We’ll be watching with interest to see whether this case opens the flood gates for similar workers, and if business models will be forced to change due to the legal implications.
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