Landmark Uber decision: business owners and worker rights
The Supreme Court’s landmark decision in the Uber case, ruling that Uber drivers are workers for the purposes of UK employment law, is hugely significant for businesses across the gig economy sector.
The Supreme Court decision
The Supreme Court unanimously dismissed Uber’s appeal against the 2018 Court of Appeal ruling, effectively meaning the estimated 40,000 Uber drivers registered in 2016 are categorised as workers. The significance of this status is that these Uber drivers, including those that were the subject of this litigation, are now entitled to national minimum wage and paid holiday under the Working Time Regulations. They are also protected against dismissal or suffering detrimental treatment as a result of whistleblowing.
It is important to note that the judgment is very specific on its own facts and Uber has said that it has since changed its business model.
Some of the determining factors in the Uber case included:
- Drivers' services being very tightly controlled by Uber, in particular the maximum they could charge for fares
- A requirement for drivers being ready, willing and able to accept work and accept a minimum amount of work if logged
- Penalties/sanctions being applied against drivers in the form of a requirement to log out if they did not want to accept work and access to the app being denied if customer ratings fell below a certain level.
Going forward, ‘multi apping’ will be more important, as discussed in the Uber case, with those you engage having the freedom to accept work across other platforms.
This impact of the decision though will extend beyond Uber and may have seismic repercussions for businesses across the gig economy sector that have similar working arrangements in place as Uber had at the time the case was brought with those they engage. If this is the case then they may be exposed in particular to claims for unlawful deduction of wages and breach of contract in both the employment tribunal and civil courts going back over a number of years and creating a huge liability for their organisations.
As well as the risk of employment claims, businesses also risk investigation by HMRC which is responsible for enforcement of the national minimum wage.
Tips for business owners
If you are a business owner working in the gig economy sector then there are a number of steps you ought to be taking now as a matter of urgency in light of the outcome of the Uber case, including:
- Carrying out employment status risk assessment to identify whether there is a risk that those you engage could be categorised as ‘workers’, applying the same criteria laid out by the Supreme Court in the Uber case. The extent of any measure of control you exercise over the services those you engage offer, together with any obligation to be ready, willing and able to accept work when logged in and subject to penalties or sanctions for not meeting such obligations, are all potential red flags.
- If an appreciable risk of worker status is identified as a result of carrying out such a review:
- Reviewing contracts of engagement to ensure they truly reflect the employment status of those your business engages in light of the Uber decision, amending and updating them where necessary, including the right to ‘multi app’.
- Reviewing working hours and pay records to make sure that those your business has engaged have received the national minimum wage. Where an issue is identified then this will need to be addressed and rectified. This is important, not only to avoid your business being exposed to past claims but to also ensure the position is regularized going forward and avoid not only the risk of future claims but also an investigation by HMRC.
If you are concerned about the impact the decision in Uber may have on your business then get in contact today with the employment team at BLM. We are here to listen and help businesses through what are challenging times.