In accordance with a landmark judgement given by the Employment Tribunal on 28 October 2016 in Aslam and ors v Uber BV and ors, Uber drivers are to be classified as workers and as such, are entitled to basic workers’ rights, including entitlement to the national minimum wage, paid annual leave, and whistleblower protection.
The case was brought by two Uber drivers who claimed that they had been underpaid the national minimum wage and denied rights under working time regulations. They asserted, amongst other things, that the nature of relationship between themselves and Uber, in reality, was akin to that of a worker as opposed to a self-employed contractor.
Uber contended that it is a technology platform, as opposed to a transport provider and that the drivers are self-employed contractors offering their services to passengers via the Uber app. This was based on the assertion in Uber’s terms and conditions that the driver enters into a contract with each passenger to provide transportation service.
The Tribunal strongly disagreed with the submission that there was a driver/passenger contract; going as far to state that Uber had resorted “in its documentation to fictions, twisted language and even brand new terminology”. Such a contract, between driver and passenger would in reality involve neither party knowing the identity of the other and Uber setting the route, the price, and being paid the fare. Accordingly, the Tribunal concluded that the driver/passenger contract was “pure fiction”.
The Tribunal ruled in favour of the Claimants, concluding that Uber is a transportation business and the drivers provide the skilled labour through which the organisation delivers its services and earns its profits. The Tribunal provided numerous reasons for its assessment, including amongst others, that Uber interviews and recruits drivers; Uber controls key information as to the passenger’s identity and intended destination and does not share this with drivers; Uber requires drivers to accept and/or not to cancel trips and enforces this requirement by logging off drivers who breach it; Uber subjects drivers through its rating system to what is effectively a performance management/disciplinary procedure; Uber determines issues about rebates for passengers, sometimes without involving the driver affected; Uber handles passenger complaints; and Uber reserves the right unilaterally to amend drivers’ terms.
Accordingly, Uber drivers satisfy the legal definition of workers and are thus entitled to the requisite rights. The consequence of this ruling has far reaching effects, not just financially for Uber, but also for similar “platform based” technology businesses. Unsurprisingly, Uber has confirmed that it will be seeking to appeal the decision.
The effect on your business
This case acts as a reminder to businesses to consider the nature of their relationships with those they engage. The Tribunal will look at the true nature of the relationship, as opposed to that described within a contract if that contract does not reflect the practical reality. It is not sufficient to define someone as self-employed, if in reality, their role is akin to that of an employee or worker.
In light of the above, if you are unsure about the true nature of the relationship with those you engage and the potential effects on your business, you should not hesitate to contact our Employment Team.