Uber and Out?
Regular readers will be aware of the long-running case by some taxi drivers against Uber. Uber has now lost its appeal against a ruling that its drivers are ‘workers’, in the keenly awaited judgment that was handed down by the Employment Appeal Tribunal (EAT) on the 10th November.
As a consequence legal experts are advising organisations operating “gig economy”-type models to ensure their contracts are watertight.
Uber had classified its drivers as self-employed, meaning they were not entitled to the same employment rights as the business’s full-time permanent staff.
However in October last year, the employment tribunal ruled that two Uber drivers, James Farrar and Yaseen Aslam, should be treated as having worker status. Primarily this entitles them to holiday pay, sick pay and the national living wage, but may also give them pension entitlements under the automatic enrolment arrangements. Uber took the case to the EAT, arguing that it was just a technology company such that its apps bring together thousands of self-employed drivers across London, rather than being an employer.
The EAT was not impressed by the claim and dismissed the appeal, describing Uber’s assertion that the company was a “mosaic of 30,000 small businesses” linked by a common platform as “faintly ridiculous”.
Uber alone has a workforce of about 50,000 drivers in the UK so it is expected that more claims will be issued – particularly since tribunal claim fees have recently been abolished. It will also have a knock-on effect for others operating similar models. Notably both Deliveroo, the fast-food delivery company, and the taxi firm Addison Lee are currently appealing against similar decisions relating to worker status.
The ruling is also likely to have implications for businesses operating similar models in terms of their finances as there will be added costs to factor in to cover the National Minimum Wage requirements; sickness and holiday pay; and pension contributions to cover.
However, this may not yet be the end of the story. This case has such wide ramifications and cost implications to the Uber business model that it is widely expected that Uber will take the case to the Supreme Court, skipping the Court of Appeal. Watch this space!
[Update 24/11/17 - It has been reported that Uber has submitted a petition to appeal to The Supreme Court.]
[Update 4/12/17 - The petition to have the case heard at the Supreme Court was refused and Uber will now submit their appeal to the Court of Appeal instead.]
Posted on 14 Nov 2017