Supreme Court Decides Uber Drivers are Workers Not Self-Employed

The Supreme Court has concluded that Uber drivers are not actually self-employed, despite engaging them on that basis for many years.  The decision was the final stage of a long-running battle with self-employed drivers who are seeking worker rights, and the dispute has been going since 2016.  As the Supreme Court is Britain’s highest court, and it has the final say on legal matters.

Delivering his judgement, Lord Leggatt said that the Supreme Court unanimously dismissed Uber’s appeal that it was an intermediary party and stated that drivers should be considered to be working not only when driving a passenger, but whenever logged in to the app.

The court considered several elements in its judgement:

  • Uber set the fare which meant that they dictated how much drivers could earn
  • Uber set the contract terms and drivers had no say in them
  • Request for rides is constrained by Uber who can penalise drivers if they reject too many rides
  • Uber monitors a driver’s service through the star rating and has the capacity to terminate the relationship if after repeated warnings this does not improve

Looking at these and other factors, the court determined that drivers were in a position of subordination to Uber where the only way they could increase their earnings would be to work longer hours.  The Supreme Court’s ruling that Uber has to consider its drivers “workers” from the time they log on to the app, until they log off is a key point in terms of NMW calculations and accruing other rights.

It is important to note that the ruling only applies to the drivers that brought the case, however it is likely that Uber will implement any changes to how they engage their drivers across the board.

Uber has long argued that it is a booking agent, which hires self-employed contractors that provide transport.  The company has previously said that if Mr Farrar and Mr Aslam were to win their case, HM Revenue & Customs (HMRC) would then classify the firm as a transport provider, and Uber would need to pay VAT on fares.

The case highlights the fact that employment status is not something that can be simply decided by a business choosing to engage people as self-employed.  It is a good deal more complicated than that, and numerous facts as to how work is undertaken in reality will actually decide the employment status of the worker.  It is important to note that whatever is agreed contractually will not matter if it does not match the reality of how work is actually done.

Employment status is complicated, and we are delighted that our podcast on Monday 1 March 2021 will focus on all of these issues.  You can subscribe here

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