Workers, or self-employed?
Uber Technologies lost a UK supreme court ruling over the rights of its drivers. In Uber BV and others (Appellants) v Aslam and others (Respondents)  the judges unanimously ruled that Uber drivers are workers who are entitled to rights such as minimum wage, paid annual leave, rest breaks. In the UK, workers being of a greater level of protection under employment law to contractors, they were also afforded protections such as, unauthorised deductions from pay, discrimination or being subjected to a detriment for being a whistle-blower, albeit not granting them the wider employment protections afforded to employees.
The Supreme Court set out five considerations which supported their rationale for the decision that the Uber drivers were workers:
- Uber controls over how much the drivers are paid for the work they do. Uber sets the fares for each booking. It was therefore Uber who decided how much drivers received for the work they do.
- Uber required its drivers to sign and accept a standard written agreement, which sets out the contractual terms that govern the services performed by the drivers, with the drivers having no say in those terms.
- Once the driver was logged into the app, Uber controlled whether the driver accepted rides, with enforcement action taken if they cancelled or rejected trips repeatedly. Uber may then take matters further and log drivers out of the app for ten minutes if performance (from Uber’s perspective) does not improve.
- Uber’s rating system implemented a significant degree of control over how the drivers performed the service. For example, Uber guides the driver to the pickup location and sets out a route for the journey. The drivers do not have to follow the specific route but are likely to receive negative customer feedback via the rating if they do not.
- Uber restricts any communication between the drivers and customer to ensure that no relationship develops. Uber handles all complaints and further interactions.
The Court stated that by “taking these factors together, it can be seen that the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber”. Consequently, the Court concluded that these conditions placed the drivers in a position of subordination and that the drivers had little or no opportunity to improve their economic position via their entrepreneurial skill.
Some key takeaways for employers:
- Categorising staff as self-employed contractors does not determine their employment status if, in practice, those “contractors” are being treated as employees or workers.
- The more control a business or employer has over its workers or how its service is provided may weaken any argument that the worker is self-employed/contractor.
- This case sets a precedent for how tribunals will decide future cases regarding employment status. Although the worker’s status depends on weighing up a number of factors, it is clear that a high degree of control exercised by the business or employer that employs individuals will favour an argument that those individuals are regarded as employees.
It is important that a business does not exercise control over the individual if they are hired as a contractor, if this were to occur, they would be regarded as an employee. Misclassification is not only a breach of employment legislation but can also have costly implications for the employer. If you are unsure about the employment status of individuals in your small business, you can contact the Emma for advice at 01-6051668 or email: email@example.com