In London today, an Employment Tribunal has ruled that Uber drivers are not self-employed and deserve certain worker rights. It is reported that Uber will appeal this decision.

This UK case will have consequences for any business involved in linking customers to self-employed service providers. Businesses in this sector (known as the “gig” economy) include Deliveroo, TaskRabbit and AirBnB.

This update reviews the merits of this case and its significance for employers in this sector and their customers.

Background

Uber operates a car hire platform that connects customers to drivers through a smartphone app. Customers can request a driver from any location in approximately 300 cities worldwide. Customers pay Uber and Uber pays a percentage to the driver.

On 20 July 2016, the UK GMB union, (a union which represents private hire drivers) brought two test cases to the Central London Employment Tribunal.

These cases were brought on behalf of two drivers, James Farrar and Yaseen Aslam (the “Drivers”). The Drivers claim is that Uber drivers should be treated as workers and as such are entitled to certain employment law rights in the UK.

The Drivers submitted that Uber must ensure that drivers are paid the national minimum wage. In addition, that they receive their statutory entitlement to annual leave and that they take rest breaks.

Uber

Uber argued that the drivers do not work for Uber but instead work for themselves as self-employed business men and women.

The company further maintained that as a technology company and not a taxi company, its role is not to instruct drivers but to link supply with demand. It noted that Uber’s drivers can choose where and when they drive. Furthermore, its drivers are not exclusively required to work for Uber and may work with other private hire operators.

The Drivers

The Drivers submitted that Uber exerts significant control over its drivers. The Drivers noted that in practice if a driver fails to pick up a certain number of customers a driver may be logged off the service for a period of time.

It was also noted that Uber controls the pay of its drivers and that it is able to impose disciplinary sanctions such as suspension on its drivers.

The concept of “worker”

Under UK employment law, all employees are considered to be workers but an employee has additional rights which do not apply to workers who are not employees.

A worker in the UK is entitled to a number of protections similar to an employee including the national minimum wage, protection against unlawful deductions from wages, statutory annual leave, rest breaks, data protection rights and protection against unlawful discrimination and whistleblowing. However, protections afforded to employees which a worker is not entitled to include a statutory minimum notice period if his/her employment ends, protection from unfair dismissal, or statutory redundancy pay.

Implications for Ireland

This ruling could affect thousands of drivers across the UK and may also have far reaching consequences for other individuals who are engaging in this business model in Ireland.

It remains to be seen how the Workplace Relations Commission would interpret the status of individuals involved in similar services in Ireland. The concept of “worker” is not generally applied in Ireland as an individual is either an employee or self-employed. Therefore, for an individual to take a successful employment law claim he would have to establish that he is an employee. In general, the relevant legal principles that would be considered by an adjudication officer include;

  • the degree of control that is exerted by the business,
  • the degree of integration of the individual into the business,
  • the provision of equipment,
  • the mutuality of the relationship, ie the business is obliged to offer work and the individual is obliged to accept it and,
  • whether or not the work has to be performed personally, ie is the individual in business in his/her own account.

For any business concerned by today’s decision, at a minimum they should ensure that they have appropriate contractual documentation in place and that individuals are required to address their own tax affairs.