Following a lengthy legal battle over 5 years, during which Uber fought hard to maintain its position that its drivers were self-employed, the fight is now over and Uber has lost.
The Supreme Court has today announced that Uber drivers are not freelancers, but workers and as such, should be entitled to certain employment rights including national minimum wage, paid holiday, maximum working week and potentially pension contributions (subject to meeting the eligibility criteria). They are also protected from detriment for blowing the whistle.
Uber argued that the drivers were self-employed and working in business on their own account, but the Supreme Court dismissed this suggestion outright. Although the drivers used their own cars, the Supreme Court held that due to the subordination and dependency of the drivers on Uber, they were in fact workers and not self-employed.
In reaching its decision, the Supreme Court said the following 5 factors were key:
- Rides were booked through the Uber app, Uber set the fare and dictated the payment terms;
- The contractual terms were imposed on the drivers (who had no say in the terms);
- Once the drivers logged onto the app, they were subject to various constraints by Uber and if they declined too many trips, they would be penalised by Uber;
- Uber exercised significant control over how the drivers operated and if the drivers did not maintain their average ratings to Uber’s satisfaction, they would receive warnings and ultimately their services could be terminated; and
- Uber restricted communications between the drivers and customers to that which was absolutely required in order to prevent the drivers building relationships with their customers.
Significantly the Supreme Court also held that the drivers were working from the point they logged onto the app, which means that Uber is liable to pay them the national minimum/living wage for this period. This decision is likely to have far reaching implications for everyone working in the gig economy. We anticipate an increase in the number of challenges from those individuals who have been offered work on a self-employed basis; who in light of the Supreme Court’s decision, may now argue that they are workers and should receive holiday pay and the national minimum/living wage.
Below are links to the Judgment and press summary:
If you would like advice about the potential implications of this decision for your business, please do not hesitate to contact us.
This is only intended to be a summary and not specific legal advice. If you would like further information or advice on employment status or generally, please do contact a member of our employment law team.