Employee Employment Law Services

Uber and Out – what next for worker status?

Uber and Out – what happens next re worker status

Issue

Uber hit the headlines because of test cases brought by two drivers regarding their status – were they workers or self-employed individuals?

Facts

Uber is a San Francisco based company which has around 40,000 drivers in England and Wales.  With union support, two test cases were brought by two drivers who claimed that they should be classed as workers rather than self-employed.

Decision

On Friday, the London Employment tribunal ruled that Uber drivers were in fact workers and therefore will be entitled to holiday pay, national minimum wage (or national living wage) and paid rest breaks.  In the ruling from the tribunal, Uber were accused of “resorting in its documentation to fictions, twisted language and even brand new terminology”.

How does this affect employers?

Uber have said that they will appeal this decision but nevertheless this case will be of concern to employers as it is potentially a ground breaking decision.  It will impact not only on thousands of Uber drivers but is potentially just the tip of the iceberg as many thousands of people are employed on a similar basis in different sectors.  It may well threaten other new business models like Deliveroo and Amazon Prime Now.

It is however important to note that each case will be case sensitive and will turn on the specific arrangements in place.  Nevertheless, those employers who rely on self-employed individuals will need to watch developments carefully.

Is this really a victory for low paid workers trapped in insecure jobs or the sacrifice of the flexibility that self-employment provides to many individuals?  Many Uber drivers were happy to be self employed as they enjoyed being their own boss, choosing their level of commitment and the flexibility this provided them.

The government has of course already asked Matthew Taylor to conduct an independent review into modern working practices and now employment practices may need to change in order to keep pace with modern business models.

What we can do for you

It will be important not to make any hasty decisions as an employer.  However, self-employed individuals may begin to challenge what their status is and caution needs to be exercised by both sides in such an arrangement.

We can advise both individuals and employers on what issues to be aware of and whether the ‘label’ put on an arrangement is correct or not.  This case shows that a tribunal will be happy to look behind the title given to an arrangement to establish its true nature.

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