Uber Alles – Are you aware of the important differences between worker and employee rights?
You are unlikely to have missed the news that an Employment Tribunal has recently found that Uber taxi drivers are workers and are therefore entitled to receive the National Minimum Wage and holiday pay.
Although this is only a Tribunal decision and is therefore not binding on other cases, the ruling is important as it will have an immediate impact on the thousands of Uber drivers who have previously been regarded as self-employed and may influence the thinking behind other similar cases because it was won by the GMB Union and argued by eminent barristers.
The Employment Tribunal had rejected the argument that Uber just enabled the individuals to work for themselves as taxi drivers through the technology it offered. It found that in reality, it was not a technology company, but was in the business of supplying transportation services.
The Uber drivers rather than being in business in their own right had contributed towards the success of Uber as a transportation service business.
In respect of worker status, it should be stressed that this ruling does not mean that the Uber drivers are ‘employees’ with employee rights. They are not going to be able to claim unfair dismissal or redundancy pay. A worker (as opposed to an employee) has no right to receive work and is under no obligation to carry out the work. However their worker status does mean that they will have certain protections. There is a minimum requirement of 5.6 weeks paid leave per year and the National Living Wage is £7.20 per hour. The drivers will also have the right to be protected if they make whistleblowing disclosures.
Looking at this more widely, the ruling could indicate that the employment status of many other ‘self-employed’ contractors will now be looked at more closely.
As mentioned previously, the decision comes very soon after HMRC announced that it is creating a specialist team to examine working practices at businesses that use freelance employees in effectively full-time roles without offering any of the associated benefits, to gain a tax advantage by not having to pay employer national insurance contributions.
HMRC has warned that if any companies are found to be in breach of existing laws they could be fined up to 100% of the tax owed.
It is considered likely that Uber will appeal because of the significant impact it will have on the company.
If you have staff and are concerned about their employment status, please get in touch for advice.
Posted on 02 Nov 2016