The long-standing legal dispute between Uber and its drivers has finally concluded in the Supreme Court this month. Uber must now classify its drivers as workers rather than self-employed. This issue was decided way back in the Employment Tribunal but was appealed by Uber all the way to the highest court in the UK. It was also decided that the drivers’ working hours begin when the app is switched on rather than when they have a passenger.
The Supreme Court came to their decision based on five factors; the Uber app calculates a fare price which the drivers cannot change, Uber imposes the contracts and terms of service, Uber monitors the drivers’ acceptance rate and will penalise them if too many trips are declined, Uber exercised significant control over the way in which drivers provided services using a star system, and Uber restricted communication between drivers and passengers. This was taken to be a sufficient degree of control to confer worker status.
Why does this matter? In the UK there are three main categories of employment which directly affect the level of rights and protection available to the member of staff: employees, workers, and self-employed. Employees have full employment rights and self-employed do not. Workers are by and large in the middle. As a result of this ruling the Uber drivers are now entitled to be paid minimum wage, holiday pay and to the auto-enrolment pension.
This decision does not change the law in any significant way. However, the importance of correctly categorising staff members cannot be overstated. This has major implications for tax and employment law purposes. Each case is fact specific and will turn on its own merits, but it is important to note that the Supreme Court has emphasised in this case that the written contract alone will not be determinative and indeed is not the correct starting point. The courts will look behind the contract and look at the reality of the situation. This will be particularly relevant when the IR35 rules on off-payroll workers extends to the private sector in April this year.
If you have any questions on any of the issues mentioned in the above article, please contact Natalia Milne.