Uber drivers are not self-employed
Uber drivers are not self-employed, it was decided at the London Central Employment Tribunal where higher levels of publicity than usual were received. This was due to the high profile nature of the companies involved. The taxi firm, Uber, has been defending its policy of categorising its drivers as self-employed staff. They will undoubtedly be disappointed with the content of the reserved judgment released last week.
The three separate Uber businesses that were embroiled in the case were:
- Uber BV (the Dutch Holding Company).
- Uber London Limited (the company that holds the Private Hire Vehicle (PHV) Operators Licence for London).
- And also, Uber Britannia Limited (the company that holds the PHV licences across the rest of the country outside London).
Test cases for wider pool of claimants
By agreement between the parties, two of the drivers in London, Mr Aslam and Mr Farrar, had their claims used as test cases for the wider pool of claimants. The essence of their claims was to ask the Tribunal to determine:
- Whether they were employees and therefore were entitled to the protection of the Employment Rights Act 1996 and the National Minimum Wage Act 1998. If so, they should be paid at least the National Minimum Wage.
- Whether they were employees who were entitled to the protection of the Working Time Regulations 1998. If so, they should receive paid leave.
- In Mr Aslam’s and one other colleague’s case, whether they received detrimental treatment under the “whistleblowing” provisions of the Employment Rights Act. (This element is still to be decided).
The decision of the Tribunal confirmed that the Uber drivers met the requirements to be classified as 'workers' as defined in the Employment Rights Act and were not self-employed business people. This will have wide ranging implications for all three of the companies that were involved in the case. The wider so-called 'gig economy' will also be taking careful note of the ramifications for their businesses. A 'gig economy' is an environment where short term labour is predominantly used.
Potential impact upon Uber
For Uber, the potential impact upon their costs is self-evident. When one looks at the incredible growth and scale of the company’s operations in the UK. There are currently around 30,000 Uber drivers in the London Area alone and over 40, 000 across the country as a whole. In London, there are over two million people who have registered as users of their various levels of service.
Unsurprisingly, the Uber companies have confirmed their intention to appeal against the Tribunal findings. They will no doubt seek to argue once again that their drivers are in fact self-employed individuals. Therefore, not entitled to the enhanced range of rights afforded by the legislation including 28 days' holiday, a maximum 48- hour average working week, rest breaks, National Minimum Wage, National Living Wage and whistleblowing protection. It is also likely that they will revisit their argument that UK law does not apply to any contract that exists involving Uber BV. And that Dutch law applies in its place.
The Tribunal were however very clear in their rationale in reaching their conclusions. They described the argument that the 30,000 Uber drivers in London were in reality a mosaic of small businesses linked by a common “platform” as “faintly ridiculous”.
Control that Uber had over the day to day activities
The judgment went on to highlight the degree of control that Uber had over the day to day activities of its drivers. The judgment cited these factors as clear evidence that the drivers are more than self-employed businessmen and women. It particularly referenced the fact that there was a contradiction between Uber’s assertion that they were the drivers’ agent. Especially when considered with the fact that Uber had the “sole and absolute discretion” to accept or deny a booking. It also referenced that Uber:
- interviews and recruits all of its drivers.
- controls the key information about each passenger and excludes the driver from access to it.
- requires drivers to accept and/or not to cancel trips and logs off drivers who do not comply with this.
- sets the route for the trips and the driver departs from it at his or her peril.
- fixes the fare and the driver cannot agree a higher sum with the passenger.
- imposes numerous conditions on the drivers, instructs drivers how to do their work and controls them in the way they perform their duties.
- subjects drivers, through their rating system, to what amounts to a performance management/disciplinary system.
- accepts the risk of loss which, if the drivers were genuinely in business on their own account, would fall on them.
- reserves the right to unilaterally amend the driver’s terms and conditions.
- controls issues around fare rebates without involving the driver.
- handles complaints by passengers, including those about the driver.
‘Control test’
All of the above highlight the application of the “control test” by the Tribunal in considering whether or not a worker is genuinely self-employed. In summary, the more control there is over the way the worker does the job, the greater the likelihood that an employment contract exists. The simple label of self-employment is therefore insufficient to confirm the legal status of any individual. It is the reality of the relationship that will determine the matter.
The future outcome of Uber’s appeal will once again be keenly anticipated. If your organisation has any self-employed workers, why not contact Qdos HR for an expert assessment of their employment status? It would be “uber foolish” not to.
Contact us for all your HR outsourcing requirements.
