The Employment Appeal Tribunal has upheld a decision that a test group of Uber drivers are not genuinely "self-employed" but have the status of "workers".

This entitles the drivers to some employment protections under the Working Time Regulations 1998, the National Minimum Wage Act 1998 and the whistleblowing provisions of the Employment Rights Act 1996. The full judgment is available here.

The decision has far-reaching implications not only for Uber drivers, but calls into question the viability of the business models of a number of companies in the so-called "gig economy".

Further details of the implications of the decision can be found in our update on the original Employment Tribunal (ET) decision here.

The appeal decision

The Employment Appeal Tribunal (EAT) grappled with two new arguments by Uber:

  • Uber attacked the ET’s decision by stressing the written agency agreement it had with the drivers. It contended that drivers are working in business on their own account directly for their passenger and Uber acts simply as an agent for those drivers in connecting the driver and the passenger.
  • Uber argued the regulatory requirements governing minicabs in London should have been interpreted differently by the ET.

The EAT rejected both of these arguments, along with Uber’s other arguments, and noted that:

  • Uber’s degree of control of its drivers meant that it was unrealistic to describe the relationship as one of principal (driver) and agent (Uber);
  • the ET had correctly examined the regulatory requirements as part of their analysis because they formed part of the factual matrix; and
  • the ET’s findings were not inconsistent or perverse and the EAT criticised Uber for deconstructing the judgment when a holistic approach to the reasoning should be adopted.

Uber’s best argument – the one point which seems really to have troubled the EAT – concerned the ability of drivers to seek work from other private hire vehicle operators in the same territory, at the same time. Uber contended that this right was fatal to a claim to "worker" status. The judge concluded, however, that although this right to work for competitors existed on paper, because drivers are required to accept 80 per cent of trip requests whilst they are on-duty, they are effectively at Uber’s disposal, and are therefore Uber’s workers.

Where to from here?

Given the importance of this litigation to Uber's business model, it is unlikely that this is the last we have heard on this case and there have already been reports that Uber intends to appeal. This remains a very active area of law:

  • We expect to see Uber attempt to "leapfrog" the Court of Appeal to the have the case heard in the Supreme Court. The Supreme Court is already considering an appeal involving Pimlico Plumbers and our bulletin on the Pimlico Plumbers case can be found here.
  • The EAT was due to hear an appeal by City Sprint in relation to its couriers, but this has been settled amid press reports on the introduction of new contractual terms which seek to bolster City Sprint’s position (which failed when challenged in the ET) that couriers are independent contractors.
  • In other litigation, the Independent Workers of Great Britain, a relatively new union that has been at the forefront of these challenges to employment status amongst "gig economy" workers, has failed to persuade the Central Arbitration Committee (CAC) that Deliveroo drivers are "workers" qualifying for various trade union rights. The difference between the Uber and Deliveroo decisions appears to have been primarily the genuine right of Deliveroo drivers to delegate or sub-contract without restriction. That right to substitute a replacement is usually fatal to a claim to employee or worker status and such was the CAC’s finding in this case. Uber is, of course, subject to a different regulatory regime, has a different business model and interacts with customers in a different way, so whether the Deliveroo decision will assist Uber going forward remains debatable. The CAC decision is available here.

It is also worth bearing in mind that the Government still may intervene and implement some of the recommendations of the Taylor review, although no formal plans to do so have yet been announced. Our bulletin on the Taylor review can be found here.