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20th November 2017

Uber lose their appeal

20th November 2017

Uber lose their appeal

Charlotte Farrell

Posted: 20th November 2017

T: 023 8048 2134

E: Email Me

You can’t call someone self-employed unless they genuinely are!

The long awaited outcome of the appeal of the Uber case was released last week and whilst it may have been a shock to the powers that be at Uber that they lost, it hasn’t really come as a shock to those in the legal world who have been following the case with interest.

The headline news is that taxi drivers working for Uber were confirmed, once again, to be workers of Uber not the self employed individuals running mini businesses as those acting for the company were keen to describe them as.

The details of the Uber case

To summarise the case itself, two drivers brought a test case, supported by their union the Independent Workers Union of Great Britain, to argue that they were ‘workers’ of the company Uber rather than true self employed contractors. They were seeking access to the rights, benefits and protection that come with that status. They were also looking to demonstrate that companies are not following the law when it comes to this way of working.

Uber drivers typically work flexibly. They use an app system, which they can turn on and off at will, and are paid per job that they complete. They are not traditional employees and as a result the label given to their way of working has been rather unclear. The law rather unhelpfully recognises two alternatives to traditional employment which aren’t always easy to identify in practice.

Firstly there are the genuine “self employed” where someone runs their own small business and is in business for themselves. This is normally quite easy to spot; a window cleaner who advertises his services by dropping leaflets through doors, an IT consultant who you can hire to review your IT equipment and supply replacements, a cleaner who you can pay by the hour to clean your home. They control when they work, where they work, how they work. They take the financial risk if something goes wrong, provide their own equipment and can send someone else in their place to do the job. They run their own business.

Secondly there is a “worker”. A person who carries out their work as part of someone else’s business with slightly more flexibility in their working arrangements but who does not have the choices and control that come with being truly self employed. Workers are harder to spot and the category was essentially created to cover the grey area between true employment and self employed status and to bridge the gap to avoid leaving a vast army of the working public without a defined role or employment rights.

Workers don’t have the full array of employment rights given to employees but they do receive some key benefits; for example the national minimum wage, paid holiday, protection against unlawful deductions from wages, discrimination and whistleblowing and the rights to limits on their working day and week. It isn’t a status to be sniffed at.

Uber have been trying to argue through this tribunal case that each Uber driver runs their own mini business offering taxi services to members of the public. They are self employed, in control of their own time, money and resources and that Uber merely assist them in doing this by connecting them, through the Uber app, with potential clients.

The drivers have been arguing that they are in fact working within Uber’s business and that whilst they have flexibility over when they do work, when they are actually working they are heavily controlled by Uber.

The drivers won. In summary it is an essential feature of Uber’s business that they have a pool of drivers available to meet the demand of users signing on to the app looking for a lift. Drivers sign a contract with Uber determining the level of service they will offer and how they will receive payment. Drivers can show they are ready to work by logging on to the app and when they have done so, by accepting the fares and using the app to pick up customers they are engaging as a worker with Uber.

What next?

The key question now for employers is what this means for the “gig economy” and those working in a similar field to Uber, Deliveroo, Citysprint and the other service industries which are multiplying quickly as technology advances. What it has made very clear is that people are much more aware of their rights and are prepared to challenge them in the tribunal system. This is only likely to increase with the removal of tribunal fees and the publicity from these large cases.

Unfortunately Uber have announced they will appeal the decision of the Employment Appeal Tribunal so it may be a few more months before we have a definitive outcome. The main risk with the current test for “worker” status is that it is also inconsistent. It depends on how a job is operated on the ground; what happens in practice day to day. In all honesty just because Uber drivers have been found to be “workers” does not necessarily mean that another company operating in a similar but different way would get the same result.

The recent Taylor review recommended to the government that it renamed the category of “worker” as “dependent contractor” to reflect the hybrid nature of the role. This could potentially solve a lot of problems of using the simple word “worker” to mean something much more complex than it first appears. However, this is only a recommendation at the moment and whilst the government has a lot on its plate it may be some time before we see this change implemented.

Regardless of the outcome of any further appeal though, the case is a very strong indicator that employers need to be very clear from the outset how they are engaging with their staff. It is vital to make it as clear as possible whether people are genuinely employees, workers or self employed. To compare how the person works in practice against the legal tests and criteria and take the time to make sure that contracts and written documents reflect what is actually happening on the ground from the start and put in place any changes that are needed if they don’t match. Fixed term contracts or zero hours contracts might actually be more appropriate in some situations as well.

As the “gig economy” increases and more and more flexible ways of working develop in the market place, this is unlikely to be the last case on these types of workers. Watch this space to see how the future of working in more agile ways evolves.

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Charlotte Farrell

Posted: 20th November 2017

T: 023 8048 2134

E: Email Me