The decision of the Supreme Court in the case of Uber BV and others v Aslam and others (February 19), can be seen as one of the most significant judicial decisions in the area of employment and business law for many years.
The significance of the decision is illustrated by the headlines of the Financial Times for February 20/21:
“ Uber rocked by landmark UK ruling that drivers are “workers”.
“ Uber ruling ‘momentous’ for labour market”.
The FT devotes almost a whole page to the judgment. Its comments include the statement that the judgment is one of the most important defeats Uber has suffered in its global fight over the employment status of its drivers, who have come to symbolise the flexibility and stresses of gig economy work.
The appeal concerned the employment status of private hire vehicle drivers who provide their services through the Uber app. The main question was whether an Uber driver is a “worker” for the purposes of employment legislation, which gives “workers” rights to be paid at least the national minimum wage, to receive annual paid leave, and other protections.
At the time of the initial employment tribunal claim in the case (2016), there were estimated to be 40,000 Uber drivers in the UK.
The employment tribunal found that the claimants were “workers”. Uber’s appeals to the Employment Appeal Tribunal and the Court of Appeal were dismissed. Uber appealed to the Supreme Court which dismissed the appeal and made the following points:
· There was no written contract between Uber and the drivers, so the nature of their legal relationship had to be inferred from the parties’ conduct.
· The aim of the relevant employment legislation was to give protection to vulnerable individuals who have little or no say over their pay and working conditions because they are in a subordinate and dependent position in relation to a person or organisation which exercises control over their work.
· Where a ride is booked through the Uber app, Uber sets the fare and drivers are not allowed to charge more than this. Therefore Uber decides how much drivers are paid.
· Uber decides contract terms and drivers have no say in them.
· Once a driver has logged on to the Uber app, the driver’s choice about whether to accept rides is constrained by Uber. This includes monitoring the driver’s rate of acceptance and cancellation of trip requests and imposing a penalty if too many are refused by automatically logging the driver off the Uber app.
· Uber exercises significant control over the way in which drivers deliver their services. For example, passengers are asked to rate the driver on a scale of 1 to 5. Drivers who fail to maintain a required average rating will be given a series of warnings and if their ratings do not improve, their relationship with Uber will eventually be terminated.
· Uber restricts communications between passengers and drivers to a minimum and takes steps to prevent drivers establishing relationships with passengers capable of extending beyond a single ride.
· The service carried out by drivers and offered to passengers through the Uber app was very tightly defined and controlled by Uber.
· Drivers were in a position of subordination and dependency in relation to Uber so that they had little or no opportunity to improve their economic position through professional skill.
· The only way in which they could increase their earnings was by working longer hours while meeting Uber’s measures of performance.
· Working time for the drivers was not limited to periods when they were actually driving but extended to any period when they were logged into the Uber app and were willing to accept trips.
Further implications of the Uber decision include the following:
· An employment tribunal will now assess the level of compensation to which the drivers are entitled.
· Other Uber drivers may now make claims against the company.
· Whether HMRC, with responsibility for policing compliance with the national minimum wage, will now pursue Uber for past infringements.
· The decision of the Supreme Court to disregard contract provisions would make it harder for Uber and other companies to avoid liability by making minor changes to terms and conditions.
A spokesperson for the firm which represented the drivers is reported to have commented that there were millions of people in this new sector and there were clear parallels on terms of how companies in the gig economy operate. For this reason the judgment was hugely significant.
A spokesperson for the Resolution Foundation commented that these issues should not be left to the courts. It was time for parliament to debate questions of employment status in the modern world of work.
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