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15th November 2017

Tribunal Tale – Uber appeal

As many of you will know, the ride-sharing company Uber was taken to the Employment Tribunal (ET) in 2016 by two drivers who claimed to be workers rather than self-employed contractors. Our update on that case and employment status more generally can be found here.

As a summary of the original Uber case, the ET found that the drivers in question were in fact workers and not self-employed contractors, despite their contracts stating otherwise. The ET determined that the overall relationship between Uber and the drivers pointed towards worker status. Indeed, the ET went as far as saying that Uber’s description of the relationship between Uber and the drivers as being one of two businesses interacting was ‘faintly ridiculous’.

The ET’s decision meant that the drivers in question were entitled to basic worker rights, such as holiday pay and the national minimum wage.

Uber was given leave to appeal that decision, and the Employment Appeal Tribunal (EAT) has just given its verdict. Unsurprisingly to most, the EAT has upheld the decision of the ET.

The factors considered by the EAT when making its decision were largely the same as those taken into account by the ET in the original case. The EAT was particularly focused on the amount of control that Uber is able to exercise over its drivers. Drivers are required to accept trips and could face consequences for not doing so. Uber also tells the drivers how to carry out their role, decides the cost of the fare and effectively performance manages the drivers through a ratings system.

Cases on employment status have been prevalent in the ET since the original Uber case, with little deviation in terms of outcome. A number of big names operating in the ‘gig economy’ have attempted to argue that those working for them are self-employed contractors, with the ET finding otherwise. Examples include a case against CitySprint, where a cycle courier was found to be a worker, with similar cases being decided against Excel Services and Addison Lee.

Another case, Pimlico Plumbers, has so far been decided similarly to those outlined above, but will soon be heard on appeal by the Supreme Court (SC). It remains to be seen how the SC will view the issue, but at the moment the EAT’s decision in the Uber appeal is binding on the lower tribunals and as such should be carefully considered by organisations who engage self-employed contractors.

Those who do use such contractors should consider the totality of the arrangement to determine whether those individuals may in fact be workers and entitled to enhanced rights. For example:

  • Does the individual have an absolute (unfettered) right to send a substitute?
  • Who decides when, how and where the work is done?
  • Can the individual turn down work?
  • Do they supply their own tools?
  • How are they paid – Invoice or PAYE?
  • Can they work for others?
  • Do they have to wear a uniform with your company name or logo on it?

The tricky part of determining employment status is that there are no hard and fast rules; the above are indicators of status but are by no means legally binding. Each set of circumstances could produce its own outcome.

One point that is certain is that employers are unable to hide behind the contract in question. In each of the cases above the respondent had clear documentation stating that the relationship was one of self-employment, but a different finding was made following a holistic review of the relationship and working arrangements between the parties.

Another factor to consider is that there may be further developments in this area. The Taylor Review into modern working practices recommended wide-ranging additional protections for those working in the gig economy, particularly with worker status. Our update on the Taylor Review can be found here.

If any or all of those recommendations are implemented, the duties of employers to their employees and workers will increase, making it all the more important for them to get a better idea of whether those currently engaged as self-employed contractors actually merit a different status. We will provide further updates in this area when more information becomes available.

In the meantime, if you have any questions on any of the issues raised in the above article, such as the employment status of individuals carrying out work for you, please contact Seanpaul McCahill.

15th November 2017