Supreme Court decision - implications for the gig-economy

Uber BV v Aslam and others [19.02.21]

New ways of working organised through digital platforms pose pressing questions about the employment status of the people who do the work involved”. So said the UK Supreme Court today in its judgment in the high-profile case of Uber BV v Aslam and others (Uber). The court dismissed Uber’s appeal and found that Uber drivers are ‘workers’ for UK employment rights purposes.

Background

Mr Yaseen Aslam and other drivers, who were members of the GMB union, brought an employment action against Uber, stating that for employment rights purposes they were ‘workers’ who as such were entitled to be paid the minimum wage receive paid annual leave. Uber countered this argument by alleging that their drivers were in fact self-employed contractors and consequently, were not entitled to such rights. Indeed, the relevant contracts between the drivers and Uber described the drivers as ‘partners’ and, as such, Uber contended that there was no employer/worker relationship.

Employment Tribunal Decision

The Employment Tribunal (ET) held that the drivers were in fact ‘workers’ within the definition in Section 230(3)(b) of the Employment Rights Act 1996 and were therefore entitled to the minimum wage and holiday pay. The ET held that the drivers entered into contracts with Uber as ‘workers’ and were integrated into Uber’s business of providing transportation services. The ET found that the claimants’ working hours began whenever they were within their working territory, had the app switched on and were ready to take trips.

Employment Appeal Tribunal and Court of Appeal

Uber appealed, citing an error of law and incorrect findings of fact. However, the appeal was dismissed by the Employment Appeal Tribunal. The matter was further escalated to the Court of Appeal who also dismissed the appeal and held that the ET had correctly defined the relationship between Uber and the claimants in this action. The Court of Appeal decision was not, however, unanimous and included a powerful dissenting minority decision.

Uber then appealed to the Supreme Court.

Supreme Court

The Supreme Court unanimously dismissed Uber’s appeal. This now means that Uber drivers are ‘workers’ as opposed to the self-employed contractors which Uber argued they were. In light of this they are entitled to the rights available to workers which include holiday pay, minimum wage and rest breaks. Lord Leggatt, in his lead judgment, found that drivers are in a position of ‘subordination and dependency to Uber’ and that drivers are reliant on Uber as their only means of earning a wage.

The judgment emphasised five factors which led it to conclude that “the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber” such that worker status was “the only conclusion which the tribunal could reasonably have reached”. Those factors were:

  1. When a ride is booked through the Uber app, Uber sets the fare. Drivers are not permitted to charge more than the fare calculated by the app. A such Uber dictates how much drivers are paid for the work they do
  2. The terms and conditions between drivers and Uber are set by Uber and drivers have no say in them
  3. Once logged into the Uber App, the driver’s choice about whether to accept rides is constrained by Uber e.g. Uber imposes penalties on drivers for not accepting rides or cancelling them
  4. Uber exercises control over the way in which drivers deliver their service e.g. the use of a ratings system which if drivers fail to maintain an average rating can result in restriction/termination of their contract and
  5. Uber restricts communications between passenger and driver and takes active steps to prevent drivers from establishing relationships with passengers.


Comment

The decision in Uber is rightly considered an important one which further underlines the trajectory of the law concerning employment status in recent years and the willingness of the courts to look beyond the confines of what might be stated in written contracts.

However, just as with other high-profile cases, such as the Supreme Court decision in Pimlico Plumbers in 2018 that we reported on here, it must be emphasised that these cases are highly fact sensitive.

In Uber, the court had particular regard to a number of factors in determining that there was, in practice, such a degree of subservience between Uber and drivers that there was worker status – as above, particular factors included how remuneration was fixed, who dictated the contractual terms, and the degree of control exercised over a driver as regards acceptance of jobs, use of technology, route selection, car standard requirements, performance management through customer rating systems, and restrictions on direct communication between driver and passenger.

Clients will need to consider the unique circumstances of their engagement of contractors and other third parties in order to determine if ‘worker’ (or ‘employee’) status might apply, and to that extent the decision in Uber and the cases before it can only offer guidance rather than a clear determination.

Related item: Pimlico Plumbers – Supreme Court confirms worker status