Uh-oh Uber – Supreme Court Decision on what constitutes a Worker or Employee

19 February 2021

The much anticipated Supreme Court decision has today (Friday 19th February 2021) been issued in the case of Uber v Aslam, reaffirming the recent land mark decision that Uber drivers are in fact ‘workers’.

This case has been rumbling on since 2016 when James Farrar and Yaseen Aslam won an Employment Tribunal against Uber, only for Uber to appeal to the Employment Appeal Tribunal, and lose, a year later.

Uber took the case to the Court of Appeal in 2018 and, after the original ruling was upheld by the Court of Appeal, they moved on to the Supreme Court who, once again, ruled to uphold the original decision.

Why the fuss? This ruling will affect millions of workers and ensure greater protection for individuals in the gig economy. It will also shift focus on to organisations who rely on self-employed contracts as a means to ‘contract out’ of basic employment protections. In addition, it may also encourage litigation from individuals who currently find themselves in the grey area between worker and self-employed status.

Employment Status: The case, which has been largely responsible for the media hype surrounding ‘employment status’, will likely have major implications for Uber and many competing businesses operating within the gig economy. There are three main classifications of employment status in the UK: Employee; Worker; and Self-employed. Usually indicated by the level of control an employer has over you, if you were to fall within the definition of an employee or a worker (on a casual contract) then you would assume all or basic employment rights in accordance with the Employment Rights Act, 1996.

What is the Uber case? Previously there were approximately 30,000 Uber drivers operating across London, all of whom were engaged to work with Uber as independent contractors, meaning that they would be deemed as self-employed. Uber argued that they only acted as a booking agent and payment platform; that drivers worked for themselves, performing services under contracts that were made with passengers using the Uber app, and that the contract in place reflected that. To be labelled as independent contractors’ means that they would not be protected by employment legislation and would not have the right to sick pay, paid annual leave or qualify for minimum wage.

How can drivers be a worker if there was a contract in place? The judgment is clear to say that employers cannot rely on the written terms in place, but instead should focus on the reality of the employment relationship. In this case, the court stated that ‘the transportation service offered by drivers and performed for passengers was tightly defined and controlled by Uber’. For example, Uber set the fare price; they determined the amount of requests that drivers could refuse; they monitored the service through a star rating system; and they governed how the service was performed with policies and procedures.  As a result of the level of control Uber exerted over the drivers, the court stated that they would be considered as workers from the moment that they switch their Uber app on and become available for work in their area, to the time when they switch their apps off at the end of the day, or during a break.

What are the implications of this ruling for businesses: Employers should ensure that the reality of the contractual relationship is correctly reflected in the written contract. Following on from the judgment in Uber, employers should consider the following when determining whether an employment relationship exists:

  • Who determines and controls what goes on?
  • Are there any policies and procedures in place to dictate how the service is performed?
  • Who takes the financial risk?
  • Who supplies the equipment?
  • Can the individual appoint a substitute to carry out the work?

Employment status is complex in nature and if you are in any doubt as to whether the individuals you engage may in fact be classed as employees or workers, then please do not hesitate to get in touch with our specialist employment team here.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.