INSIGHT: It is Uber Difficult When You Face a Tribunal

Posted on November 1, 2016

An Employment Tribunal has now ruled that two drivers who provide services to Uber are 'workers' within the meaning of the Employment Rights Act 1996.

The case could have an impact on other firms with large self-employed workforces in the so called ‘gig economy’ who could now face scrutiny. A gig economy is an environment in which temporary positions are common and organisations contract with independent workers for short-term engagements

Here the firms do not employ the workers but take commission from their earnings.

The Government recently announced a six month review of working practices and HMRC is setting up the “employment status and intermediaries” team to investigate firms following the growing trend for self-employed workforces.

Following the tribunal ruling it means the Uber workers will be entitled to a limited number of employment rights (but not those accruing to 'employees' - which this case was not about). Amongst other rights, they will be entitled to:-

5.6 weeks' paid annual leave each year
a maximum 48 hour average working week, and rest breaks
the national minimum wage (and the national living wage)
protection of the whistleblowing legislation.

As they are not employees, they will not be entitled to:-

the ability to claim unfair dismissal
the right to a statutory redundancy payment
the benefit of the implied term of trust and confidence
the protection of TUPE, if Uber sells its business

Of course, it is virtually certain that this tribunal decision will be appealed up and up, potentially to the Supreme Court. So, for now:-

any Uber drivers should bring tribunal claims on the assumption they are 'workers', and ask for the hearings to be stayed (put on hold) pending any appeals of today's decision
although this decision is fact-specific, and based on Uber's business model, it increases the chance of other 'gig economy' companies facing claims that their 'contractors' have worker status.

Susan Mayall, head of Employment Law at Pearson, said: “This is a ground-breaking case and thousands of people caught up in the same self-employment role will enjoy the same rights as workers.

“As I always say employment law is constantly changing and start ups and growing businesses, not just take aways and taxi firms, considering using the Uber model will no doubt be looking to the tribunals for guidance. A case like this means they would be eligible to pay their workers holidays and minimum wages, so watch this space and if in doubt contact me for a chat on where your responsibilities as an employer lie.”

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.