Uber Lose Appeal: 40,000 Drivers Entitled to Rights

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15 Nov 2017

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This morning has brought the news that Uber has lost its appeal against the Employment Tribunal judgment that their drivers are workers; Uber had insisted that the drivers were self-employed contractors. This means that some 40,000 drivers are entitled to rights such as holiday and sick pay, rest breaks, national minimum wage, and more.

Amanda Beattie, Croner Employment Law Expert, says: “On 27 and 28 September 2017, Uber attended the Employment Appeal Tribunal in a bid to have the Employment Tribunal Judgment overturned, which decided that the status of their drivers that they engage were not in fact self-employed, but were workers of the company. “One of the major consequences of this Judgment for Uber is that as workers, their drivers will be entitled to holiday and sick pay, rest breaks, national minimum wage and protection against discrimination and being subjected to any detriment for whistleblowing. "Conversely, self-employed individuals are excluded from any of these claims at an Employment Tribunal. With Uber engaging around 40,000 drivers of this kind, the financial ramifications of this Judgment could be significant." Uber has already announced its intention to continue its fight and appeal this decision to the Court of Appeal.

Background of the Case

Amanda explains: "The Employment Tribunal’s Judgment outlined that Uber did have sufficient control over their drivers for a number of reasons, for example; Uber would set the default route for the driver to follow on a trip; instruct drivers as to how to do their work and controlled their performance; fixes the fares and the driver cannot agree a higher or lower fare with the passenger and they were required to carry out the service personally. These and other factors led the Tribunal to consider that the drivers were not self-employed but were workers. “Although each case turns on its own facts, Uber’s unsuccessful appeal highlights to companies who operate on a similar basis that their practice needs to be fundamentally changed. This is a further nail in the coffin for the ‘gig economy’ which we have seen become more prevalent over recent years.” Late last year, the Employment Tribunal found that two taxi drivers were workers, and not self-employed contractors as their contracts held them out to be. This meant that they were entitled to paid holiday, maximum working hours, minimum breaks, national minimum wage etc. There is now binding precedent that people who work under this business model, and other similar models in the gig economy, are workers with employment rights. Key to the decision was the lack of a right to substitution and the amount of control Uber had over the drivers.

Employment Tribunal Risk

Croner employment law experts expect that there will be an influx of claims from “self-employed contractors” – and so an increase in EC applications to deal with - who work in a similar way to Uber. Earlier this year, the Supreme Court ruled that tribunal fees are unlawful and a barrier to justice, abolishing them with immediate effect. As a result of this ruling, if an employee feels that you, as an employer, have treated them unfairly, there is nothing to stop them making a claim against you, which could have a devastating impact on your business. You need to act now to protect yourself and your organisation, especially when considering that all tribunal judgements are now published publically. Find out about our employment tribunal support here, or call 0808 145 3380 to learn more.                   “The Employment Tribunal’s Judgment outlined that Uber did have sufficient control over their drivers for a number of reasons, for example; Uber would set the default route for the driver to follow on a trip; instruct divers as to how to do their work and controlled their performance; fixes the fares and the driver cannot agree a higher or lower fare with the passenger and they were required to carry out the service personally. These and other factors led the Tribunal to consider that the drivers were not self-employed but were workers. “Although each case turns on its own facts, Uber’s unsuccessful appeal highlights to companies who operate on a similar basis that their practice needs to be fundamentally changed. This is a further nail in the coffin for the ‘gig economy’ which we have seen become more prevalent over recent years.”

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