Opinion

Worker Status…Uber…The result is in

19th December 2017

In the ongoing case of Uber BV and Others v Aslam and Others the Employment Appeal Tribunal (EAT) has now confirmed that Uber drivers are workers and not self-employed. The decision is quite clear but the fallout perhaps less so: what does this decision mean for businesses operating within the so called ‘gig economy’ and is there still a chance that businesses can implement a business model in which they can still utilise a self-employment structure?

Uber owns, operates and provides a well-known smart phone application whereby customers can order a taxi. In providing this application based platform service, Uber classifies its taxi drivers as self-employed contractors who simply use its application. This effectively reduces their employment rights to nil.

Uber is itself part of a complex corporate structure that encompasses various legal entities. In this dispute, Uber London Ltd (Uber London) and Uber BV (UBV) were the relevant entities. The key commercial argument that Uber sought to assert was that Uber is a provider of a technological application designed for smartphones which facilitates a taxi service. It is not however a taxi provider, instead the drivers provide the taxi service independently on a self-employed basis. Uber assert that the contract entered into was between the driver and the passenger.

Some of the employment specific factors in this case included the following:

  • although drivers did not need to commit to work, signing into the application indicates that they would be on duty
  • drivers would supply their own vehicles and manage all running costs;
  • if drivers failed to accept bookings, the application would send warning messages which could lead to suspension from the application or blockage
  • Uber calculates the fare and a driver cannot agree a higher fee. UBV would then pay drivers a weekly payment minus a service fee of 20% to 25%
  • drivers do not need to wear uniforms
  • drivers are subjected to various controls and conditions including instructions on how to work and a performance management system (access to application is withdrawn if standards fall below a set average rating)
  • Uber reserve the power to unilaterally amend the drivers’ terms.

The ET initially found that the drivers were workers thereby entitling them to the benefit of various workers rights including:

  • 5.6 weeks' paid annual leave each year
  • a maximum 48 hour average working week
  • rest breaks
  • National minimum wage (and the national living wage)
  • protection of the whistleblowing legislation.

 

Following Uber’s appeal, the EAT confirmed that the ET had been correct to find that in reality, the drivers could not operate separate businesses due to the extent of control exercised over them by Uber. In addition, the EAT agreed with the ET’s finding that the degree of integration demonstrated that the drivers could not truly operate a self-employed business. It therefore conformed the status of Uber drivers as workers.

One point that Uber sought to argue was that Uber London was in fact agent for the drivers and that agency relationships were common within the private hire vehicle industry. The EAT however disagreed with this and confirmed that this relationship was not one of agency.

Employer Considerations

The EAT once again referred to the use of “fictions, twisted language and even brand new terminology”. The key point is that complex legal documentation cannot be used to hide what is in reality an employee or worker relationship.

One significant point arising out of Uber is the impact of the decision upon companies operating within the gig economy that utilise similar business models. On the face of it, it appears that businesses with similar structures are going to face scrutiny in respect of the status of their self-employed contractors. If the reality dictates worker status, clearly a tribunal will be minded to find worker status.

What about Deliveroo?

This is not to say that the position is completely set in stone. The Central Arbitration Committee (CAC) recently considered whether Deliveroo Riders were workers in respect of a trade union recognition dispute. Contrary to the recent trend of employment status cases, the CAC found that Deliveroo drivers were self-employed.

One of the key factors it seems, was the riders’ ability to appoint a substitute. The CAC found that the right to provide a substitute to undertake the work was fatal to the union’s claim that the cyclists were workers.

It appears that the model of self-employment can work if in reality there is a relationship of self-employment and one of the factors that lends itself to self-employed status is that of an unfettered right of substitution. Having said that, the general direction emanating from various tribunal decisions tends to indicate that within the gig economy, worker status is often hidden under a veil of complex legal documentation that has been utilised to hide the true status of the relationship. The current trend of tribunal decisions appears to be leaning towards the finding of worker status in the context of the gig economy.

 

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