Much like in Australia, employees in the UK are afforded rights beyond those available to independent contractors and self-employed workers. These rights include minimum wage thresholds, leave entitlements and unfair dismissal and redundancy protections. It is, therefore, of great significance that the London Central Employment Tribunal recently handed down a landmark decision in finding that Uber drivers – and there are more than 40,000 of them across the UK − are employees and not contractors in the Uber business. 

The two test claimants (one a current Uber driver and the other a former driver) claimed to be “workers” for the purposes of the Employment Rights Act 1996 and Working Time Regulations 1998 and were thereby entitled to be paid the minimum wage and provided with paid leave. They argued that Uber’s practice of presenting them with “recommendations” and “tips” in order to improve “rider experience” in fact amounted to instruction, management and control over the way in which they provided their driving services.

 Uber argued that the drivers were self-employed operators who were solely responsible for providing driving services to passengers and that Uber’s role was to provide an online platform to connect drivers to passengers. In its contract documentation with drivers, Uber described itself as a “technology services provider that does not provide transportation services, function as a transportation carrier or agent for the transportation of passengers”. 

The Employment Tribunal was sceptical of the “twisted language” and “fictions” in Uber’s contract documentation, noting the “remarkable lengths” Uber went to in describing itself and its legal relationship with drivers. The tribunal looked behind the contract documentation in upholding the claimants’ “simple case” that Uber ran a transportation business and employed drivers to that end.

In making its decision, the tribunal considered the control with which Uber recruited and monitored drivers, finding that Uber exerted sufficient control over its drivers and had integrated them into the business model as demonstrated by Uber’s payment and review system. 

As yet, no similar case involving Uber has been heard in Australia. Nevertheless, the UK decision has the potential to upset the business model of the sharing economy, which is premised on the assumption that the workers engaged to provide the services are independent contractors rather than employees.