Employment Law Update - Uber drivers and worker status


25 January 2019

The Court of Appeal has, by a majority, upheld the decision of the employment tribunal and the Employment Appeal Tribunal (EAT) that its drivers are workers rather than independent contractors.

Uber BV and others v Aslam and others [2018] EWCA Civ 2748

Facts

Uber runs a technology platform through which it provides taxi services to customers, by drivers that are designated as self-employed contractors. A group of drivers brought claims against the company, arguing that they are ‘workers’ rather than self-employed contractors, and, therefore, entitled to the national minimum wage and paid annual leave. The drivers succeeded in their claim before an employment tribunal and the EAT. Uber appealed to the Court of Appeal.

Court of Appeal  decision

The Court of Appeal has rejected Uber’s appeal, finding the drivers to be workers.

In considering the contractual documentation governing the relationship between the parties, particularly when the terms are standard and non-negotiable and the parties are in an unequal bargaining position, it is necessary to take a ‘realistic and worldly-wise’ approach. The written documentation stated that Uber only acted as an intermediary, providing booking and payment services. However, the majority of the Court of Appeal found there to be ample evidence of the fact that Uber is a transportation business, for which the drivers provide the labour. It held that there was a ‘high degree of fiction’ in the wording of the agreement between the parties. In reality, the company enforces a high degree of control over the drivers in order to protect its position as a licensed private hire vehicle operator in London. The drivers work for them rather than the other way around, as claimed by Uber. 

The court agreed with the tribunal’s conclusion that each driver should be regarded as a worker when they have signed into the app and are ready and willing to accept fares.

The dissenting judge, Lord Justice Underhill, disagreed with the majority that the contractual documentation could be disregarded on the basis that it is in accordance with a well-recognised model for relationships in the private hire car business. He made reference to previous decisions involving taxi companies, in which worker status had been rejected.  The judge emphasised, however, that his conclusion that the Uber drivers were not workers did not mean that those working in the gig economy should not enjoy the same rights and protections as other workers. If the relevant legislation does not extend protection far enough, this is a matter for Parliament to determine. 

Consequences

The Court of Appeal has given Uber permission to appeal to the Supreme Court, so it is likely that in another year or so we will have a further, definitive, ruling on whether Uber drivers are workers. The fact that the Court of Appeal judgment is a majority decision offers a glimmer of hope to Uber in pursuing its appeal. As with all cases involving employment status, it is very context-specific. However, a Supreme Court judgment may also go some way in establishing new boundaries for employment status in the context of the gig economy. In addition, the Government is proposing to clarify the statutory tests for determining employment status, under its recently published Good Work Plan.

 

The content of this article is for general information only. For further information please contact Liz Stevens or a member of Birketts' Employment Law Team.

This article is from the January 2019 issue of Employment Law Update, our monthly newsletter on employment legislation and regulation. To download the latest issue, please visit the newsletter section of our website. Law covered as at January 2019.

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