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How does the Employment Tribunal decision on Uber workers affect you?

November 2, 2016

Last week, as was widely reported in the news, the Employment Tribunal decided that Uber drivers were workers. Uber had claimed that the drivers were not its workers but that they were self-employed, in business on their own account. Uber said that it just provided a platform (the app) that allowed the drivers to provide services to customers looking for a taxi. This was dismissed by the Tribunal. In doing so, it looked in detail at the terms and conditions of the app for both the drivers and the users of the Uber service, and other relevant documents. However, the Tribunal’s review went beyond what was written down and they looked at the reality as well. They considered all the circumstances include Uber’s marketing, the process by which the drivers were engaged, what was said by Uber to the licensing authority and what happened in practice when drivers provided their services. While there was no dispute that the drivers did not have to switch on the app or offer their services, this was not enough to stop them being Uber’s workers.

When it comes to employment law rights, a worker sits between an employee and someone who is self-employed. A worker doesn’t have rights to protection from unfair dismissal as an employee does but they are entitled to paid holiday and the national minimum wage for the time that they are working. Those who are genuinely self-employed don’t have these rights. While the tribunal’s decision is likely to be appealed, if it is not overturned, these worker rights for Uber drivers will increase its costs, which ultimately are likely to be passed on to the customer.

This is not the only case about employment status that is in the Tribunal system at the moment, couriers are also bringing claims about their employment law status, and this along with the Uber decision is likely to affect all those that engage people other than as employees. The key issue is whether the basis on which you engage people corresponds to the reality of the situation. This case shows that tribunals will overlook documents and focus on how you actually operate your business, including how you promote it to the outside world. Uber’s marketing showed clearly that it sold a variety of transport products; it was not just a technology platform. The suggestion by Uber that there was a contract between the customer and the driver (not Uber) and that it worked for the drivers (not the other way round) did not correspond with the reality. This meant that it couldn’t rely on the documents it produced to show that the drivers were not their workers.

The Government and HMRC are increasingly focusing on this issue and it is likely to be the subject of future headlines. It is therefore important to look at the actual situation and consider how much control you want over an individual that you engage. Do they have to provide their service personally and carry out all the work that you want them to do? If the answer to these questions is yes, those that you engage are unlikely to be self-employed and the associated costs of the individual being your employee or worker need to be factored into your business. You also need to make sure that you manage them properly to avoid potential future issues such as unfair dismissal, which is often avoided by taking action at an early stage as soon as an issue starts to develop.

Louise Paull – LawBite Employment LawBrief. For further legal advice you can contact Louise via our online legal advice portal.