On Friday 19 February 2021, the Supreme Court dismissed an appeal by the appellants (three companies, together known as “Uber”) in this case, holding that its drivers were workers and not self-employed contractors. This allows the drivers to claim a number of employment rights including the right to be paid the National Minimum Wage and paid annual leave, both retrospectively and on an ongoing basis. The Supreme Court held that the matter of employment status was not one of interpreting the written contract between the parties but a question of whether an individual met the relevant statutory definition of a ‘worker’ in order to qualify for protection under employment law.
Under the Employment Rights Act 1996, a ‘worker’ is defined as “an individual who has entered into or works under (or, where the employment has ceased, worked under) (a) a contract of employment, or (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertook to do or perform personally any work or services for another party to the contract whose status was not by virtue of the contract that of a client or customer of any progression or business undertaking carried on by the individual”. Whether or not an individual falls within this definition is a question of fact.
In this case, Uber ran an online platform through a smartphone app which connected customers to private hire vehicle drivers. Under various written agreements between Uber BV (the Dutch parent company) and the drivers and Uber and the passengers, the drivers were expressed to be self-employed contractors and Uber characterised itself merely as a booking agent.
In 2016, the Claimants (two Uber drivers) brought a claim in the Employment Tribunal, arguing that they were in fact ‘workers’ for the purposes of employment law and were entitled to certain statutory rights such as the right to be paid National Minimum Wage and the right to paid annual leave.
The Employment Tribunal agreed that the drivers were workers on the basis that, under the factual arrangement, Uber had significant control over the activities of its drivers and the relationships between the drivers and the customers. By way of example: Uber fixed the remuneration paid to the drivers and set the fares paid by passengers; the contractual terms between the parties were dictated by Uber and drivers were required to accept the standard terms; when logged onto the Uber app, drivers were required to maintain a certain level of acceptance of trips and were penalised by being logged out of the app if they did not; Uber controlled the information given to the driver in terms of destination and passenger details; Uber controlled the type of car used and the technology involved in providing the services; Uber imposed conditions on drivers regarding qualifications and quality of service; Uber essentially operated a performance management procedure via the ratings system; and Uber accepted the risk of loss and decided upon fare disputes and refunds. This position was upheld by the Employment Appeal Tribunal and Court of Appeal who agreed with the Employment Tribunal that the Uber drivers were workers.
The question before the Supreme Court was whether the Employment Tribunal could reasonably have come to the decision it did that Uber drivers were “workers” for employment law purposes. Notwithstanding that the Uber drivers did have a large degree of autonomy in terms of when and where they worked, the Supreme Court determined that the Employment Tribunal’s decision was a reasonable decision, on the basis of the extensive factors set out above demonstrating the control Uber had over its drivers. Indeed the Supreme Court confirmed that as the rights invoked by the Claimants were statutory rights, it was necessary to look at whether the Claimants fell within the statutory definition of a worker (as opposed to interpreting the meaning of the contract between the parties).
The Supreme Court also held that (i) the Employment Tribunal had been entitled to determine that periods during which its three conditions were met constituted ‘working time’ for the purpose of the Working Time Regulations 1998, (ii) drivers’ working hours should be classified as “unmeasured work”; and (iii) that the Claimants’ working hours were not “time work”. The effect of these decisions is that the periods in which the Claimants were considered to be “working” was not limited to that time which the driver was actually driving a passenger but included any period when the driver was logged into the Uber app within the territory in which the driver was licensed to operate.
Although the Supreme Court’s judgment is not a surprise it is an important reminder that the terms of any written agreement are only part of the analysis to determine employment status and the courts will look at the reality of the working relationship. Taylor Walton’s Employment Team is able to help with any enquiries you may have about employment status including carrying out employment status assessments where appropriate. Please contact us for further details.