21 Dec 2018
The Court of Appeal has refused to overturn previous judgements that Uber drivers are entitled to employment rights.
The result confirms that Uber drivers are classed as workers and not self-employed. This means that Uber may be forced to give its drivers holiday pay and sick leave, and pay them at least national minimum wage.
This is Uber’s third loss since two of its drivers first took the company to an employment tribunal in 2016. And it’s not over yet. Uber has one final chance to keep the self-employed status for drivers when it appeals to the Supreme Court.
It’s not only gig economy businesses that will be watching the verdict closely. The ruling on employment status could have a big impact on your business…
Why are Ubers different from taxis?
Most UK taxi drivers are self-employed and receive work through central booking agents. So why is this any different for Uber?
It comes down to an issue of control. The court found that Uber’s working conditions mean that drivers are not self-employed.
For instance, all Uber drivers receive performance reviews and ratings. Uber can suspend drivers for turning down work when on shift (i.e. when logged into the Uber app). And Uber sets all fare prices, so drivers have no power over what they charge.
Also, unlike other taxi companies, Uber is worth $120bn on the stock market. That shouldn’t influence a judge, but probably has an effect on public opinion…
Worker, employee, self-employed: what’s the difference?
Many UK businesses have a mixed workforce of employees, workers and self-employed. And there’s a grey area between.
An employee is someone that works for you under a contract of employment. Workers are people that may occasionally do work for your business. They may not have a written contract (although we would always recommend that they do—it’s safer for your business). If your worker does have a written contract, it might include terms likes ‘casual’, ‘zero hours’ or ‘as required’.
So it’s a little confusing. But what’s important is that both workers and employees have more rights than the self-employed. They also have more duties to their employers. For example, workers and employees must turn up to work on time and can’t send someone else in their place.
Many gig economy businesses rely on not giving basic employee rights to their workforce. And Uber says that most of its drivers value the flexibility of being self-employed.
What does this mean for me?
You might agree with the ruling, even if you are a gig economy employer. But it still presents a big challenge for businesses.
You may need to start giving holiday and sick pay to staff previously classed as self-employed. And all your workers will need to get at least national minimum wage. Your workers will have the right to take you to an employment tribunal if you break these rules.
The judgment also shows that if your day-to-day working relationship with staff is different to their contracts, then your contracts hold no weight.
This gives self-employed people more power to claim at an employment tribunal that they are under the control of your business.
What do I do next?
First, make sure that the employment status label you give to your workforce is the correct one. As mentioned above, that’s easier said than done.
If you struggle with the worker/employee/self-employed distinction, call Croner. We give expert advice on how to label your staff correctly.
Make sure your staff contracts reflect reality. If your contract says a person is “self-employed” but they can’t turn down work, then that contract won’t stand up in an employment tribunal.
We help you write contracts that truly represent the working relationship, and still give you the flexibility you need from staff. Without falling foul of the law.
Big changes are coming…
December 2018 was a tough month for the gig economy. The government’s ‘Good Work Plan’ promises to overhaul workplace rights, with a host of regulations set to impact most UK employers. Meanwhile, the Republic of Ireland has effectively banned zero-hour contracts with the introduction of the Employment (Miscellaneous Provisions) Bill.
Be prepared for big changes. Contact Croner today. We help you understand the rules affecting your business and help you stay on the right side of the law.
Speak to a Croner employment law expert. Call 01455 858 132.
Free to Download Employer Resources
Ready to focus on what you do best?
Get your free consultation and speak to an expert today.