The employment tribunal concluded that Uber drivers are workers and are therefore entitled to receive the national minimum wage and paid annual leave.

Uber operates a platform connecting passengers to thousands of drivers through a smartphone application. The application allows passengers to request to be picked up from a certain location and they pay Uber for the journey, Uber in turn pays the drivers. Uber engages its drivers as self-employed contractors. However, the drivers who issued the claim in the employment tribunal argued that Uber were acting unlawfully by refusing to recognise their status as workers and thus failing to provide them with the rights and protections afforded to those with worker status.

Uber’s key argument when defending this claim was to contend that it is the passengers who contract with the drivers and that the company does not therefore control when and how the drivers work, meaning the drivers do not work for them and do not have worker rights. However, the drivers disagreed and instead contended that in practice they are workers undertaking personally to do work for Uber, without Uber being a client or customer of the drivers business.

Looking beyond the carefully crafted contract in place between the parties at the reality of the relationship in practice, the Employment Tribunal accepted the drivers’ interpretation of the position, finding them to be workers engaged by Uber to provide services to passengers. In reaching this decision the tribunal took account of the following facts:

  • Uber interviews and recruits drivers;
  • The driver does not know the passenger’s identity or their intended destination prior to the journey beginning;
  • the route to be undertaken by the driver is determined by Uber and the fee payable by the passenger is also determined by Uber;
  • Drivers’ vehicles are required to meet certain specifications set by Uber;
  • Uber requires drivers to accept and/or not to cancel a certain number of trips and enforces this requirement by deactivating drivers who breach it which was in essence a disciplinary sanction for drivers who did not comply;
  • Uber subjects drivers to its rating system to what is effectively a performance management/disciplinary procedure;
  • Uber accepts the risk of loss where a passenger soils a vehicle or in the case of fraud, which if the drivers were genuinely in business on their own account would fall on them;
  • Uber handles passenger complaints and rebates sometimes without involving the driver;
  • Uber reserves the right unilaterally to amend drivers’ terms; and
  • Uber’s marketing material repeatedly stresses to the passenger Uber's responsibility for the quality of the service provided by its drivers.

As a consequence of this decision Uber drivers are to receive the national minimum wage, will be afforded protection under the Working Time Regulations and will be afforded protection under relevant whistleblowing legislation.

Uber will undoubtedly appeal this decision. In the meantime, the potential implications of this decision for organisations with a similar business model are significant. Such organisations should remember that the employment tribunals will look beyond the contracts in place and at the reality of the relationship in practice when determining employment status, and the risks attached to categorising those who carry out work for you can be expensive. Deliveroo couriers are already seeking union recognition and workers’ rights as a consequence of this decision. Expect more case law to follow.