This article was first published in HR Review and the original article can be found online here.

On Friday 11 November, the Employment Appeal Tribunal (EAT) upheld a judgment that Uber drivers are legally classified as 'workers', and are not self-employed.

Last year, two Uber drivers, Mr Farrar and Mr Aslam, brought a claim against Uber for unlawful deduction of wages, and failure to provide paid leave. They argued that they were workers, and should therefore be afforded protection under the Employment Rights Act (ERA) 1996. They were successful in their claim, and Uber appealed this decision, which was revealed last week to have been unsuccessful in the EAT's judgment.

Uber is a transportation service that forms part of the fast-growing 'gig-economy', defined by the Oxford English Dictionary as 'a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs'. The benefits of working in the gig economy, such as increased opportunities and flexibility, are for some outweighed by the risk of temporary work, low pay during quiet periods, and no entitlement to paid leave.

The Uber drivers claimed worker's rights to ensure they would be afforded the benefit of more rights under employment law than if they were classed as self-employed. These rights include protection from unlawful deduction of wages, entitlement to receive the National Minimum Wage and entitlement to paid annual leave.

In the original hearing in the Employment Tribunal (ET), the ET examined the legal relationship between the companies, the drivers and the passengers in order to establish whether the drivers were workers. It considered the law under the ERA 1996, the National Minimum Wage Act (NMWA) 1998, and the Working Time Regulations (WTR) 1998.

The Tribunal held that Uber drivers are never under any obligation to switch on the App, or, even if logged on, to accept any driving assignment that may be offered to them. However, if the driver (a) has the app switched on, (b) is within the territory in which he is authorised to work, and (c) is able and willing to accept assignments, he is working for Uber under a 'worker' contract and therefore should be afforded the protections and rights of a worker.

In the appeal, Uber argued that the Tribunal had erred on four grounds:

  1. the ET had erred in disregarding the written contractual agreement between the drivers and Uber BV;
  2. the ET had erred in relying on regulatory requirements as evidence of worker status;
  3. the ET had made a number of internally inconsistent and perverse findings of fact in concluding that the Claimants were required to work for Uber; and
  4. that it had further failed to take into account relevant matters relied on by Uber as inconsistent with worker status.

The EAT dismissed the appeal. When considering the ET's original judgment, the EAT found it to be fact-and context- specific, and under the facts and the relevant law, the drivers were workers.

The employment status of workers in the 'gig economy' is particularly topical, as companies grapple with the legal relationship between themselves and their contractors. This month, Deliveroo riders brought a claim to the ET, also seeking workers' rights, for many of the same reasons as the Uber drivers. It is likely that other 'contractors' in the gig economy will soon be following suit.

The government is also looking into clarifying the distinctions between the self-employed, workers and employees. The Taylor Review of Modern Working Practices was published in July 2017; it looked into potential reforms and made numerous recommendations, including that the definition of 'worker' become clearer and more consistent.

Going forward, it is likely that many more ‘contractors’ in the gig economy will try to claim workers’ rights. Self-employment may be desirable for those who require flexibility in their work, but for many, the benefits and protections of being a worker will be more attractive. After the EAT ruling on Friday, Tom Elvidge, Uber's UK acting general manager, claimed that the majority of Uber drivers want to be classed as self-employed, as they want the 'freedom to choose if, when and where they drive'. Uber has therefore already expressed their intention to appeal the EAT's judgment, and it remains to be seen whether this will be successful. This issue is likely to reach the Supreme Court, and until there is a final decision, there will continue to be uncertainty surrounding employment in the gig economy.