The Supreme Court has upheld the Employment Tribunal’s decision that Uber drivers are workers, and not self-employed contractors.
Why this matters
Individuals who are deemed to be workers under the law are granted an array of rights, including the right to be paid the National Minimum Wage, holiday pay and sick pay.
Definition of a worker
To qualify as a worker under the law, the individual in question must be obliged, under a contract, to “personally” carry out work or services for the other party to the contract. In addition, the person for whom the work is carried out must not be a client or customer of a business that is being run by the individual.
The claimants in this case (19 Uber drivers) alleged that they were Uber’s workers and brought claims for National Minimum Wage payments, holiday pay, and unlawful deduction from wages.
The drivers were engaged by Uber under an agreement which stated that the drivers were self-employed contractors. Uber’s case was that: (a) Uber is a technology platform which facilitates the provision of taxi services, rather than a provider of those services; (b) the contract is between the drivers (who provide the transportation services) and the passengers; and (c) Uber’s role is limited to acting as the drivers’ agent in facilitating this arrangement. On that basis, Uber argued that the drivers were all self-employed.
The Employment Tribunal decided that the Uber drivers were workers. The Tribunal’s primary reasons for reaching this conclusion were that, on the facts, it was implausible to deny that Uber is in business as a supplier of transportation services and “unreal” to regard Uber as providing a service to the drivers as an “agent” (as, in reality, the drivers were providing a service to Uber).
The Tribunal’s decision was approved by both the Employment Appeal Tribunal and the Court of Appeal. Uber then appealed to the Supreme Court, arguing that the Employment Tribunal and appellate courts had been wrong to ignore the terms of the contractual documents, which clearly set out that the drivers are self-employed.
Decision of the Supreme Court
The Supreme Court upheld the Employment Tribunal’s original decision. In doing so, it stated that, in deciding this question, it is necessary to look beyond the wording of the contract in order to determine the true nature of the relationship. The Court said that the evidence did not support Uber’s claim that it acted as an agent for the drivers. In reality, Uber entered into a contract with the passengers (namely, the booking), and engaged the drivers to carry out those services for Uber.
A key consideration for the Court was the respective degree of control that both Uber and the drivers had over the relationship with the passengers. The Court determined that, within this context, the following factors justified a finding that the drivers were workers:
- The remuneration paid to the drivers was fixed by Uber.
- The terms on which drivers performed the services were dictated by Uber.
- Once the driver had logged on to the app, he or she had little control over whether to accept requests for rides.
- Uber exercised a significant degree of control over the way in which the drivers provided their services (for example, with regard to the route selected).
- Uber takes active steps to prevent drivers from establishing any relationship with the passengers that could extend outside of the individual ride.
Lessons for employers
Employers should note that, whilst the wording of any of their contract with contractors will be relevant, the courts will always look beyond that wording in order to determine the true nature of the relationship.
It would therefore be advisable for employers to review their contractual arrangements with any contractors. If a worker relationship exists, then employers will either need to ensure that it is fulfilling its legal obligations in respect of that individual, or consider altering the nature of the relationship to try and ensure that it is one of genuine self-employment.