Uber-controlling – Uber drivers found to be workers
The Supreme Court has given its judgement in the much-awaited decision concerning the employment status of Uber drivers. The Court has unanimously confirmed that the drivers are workers (and not self-employed) for the purposes of employment protection.
The status of whether or not the drivers are workers for the purposes of employment protection is important as it governs the drivers’ rights to employment protections such as the national minimum wage, paid holiday and working time regulations. The decision is significant as it provides guidance on how other individuals who are working in the gig economy, or on a self-employed basis, should be treated for the purposes of employment protections.
For those of you who are unfamiliar with Uber, they operate their business by means of a smartphone app by which passengers can book rides from taxi drivers. The drivers own their own cars and are free to choose when to make themselves available to accept bookings. Uber has always insisted that it is a technology company, and does not provide taxi services, and that therefore the company merely acts as an agent, with the contract being concluded between the driver and passenger for each journey. It is on this basis that Uber has treated its drivers as self-employed to date.
The key factor in the Supreme Court decision was the amount of control that Uber had over the drivers. The Court focused on the fact that Uber dictates the rate of pay and contractual terms, constrains the drivers’ freedoms to choose when to work once logged into the app, controls the way in which the service is delivered and restricts the drivers’ ability to communicate with the passengers. It was this level of control that Uber operated over the drivers that led the Court to conclude that the drivers were indeed workers, rather than self-employed individuals operating a business on their own account.
The Court also had regard to the fact that its role was to give effect to the purpose of employment legislation, namely to give protection to vulnerable individuals who have little or no say over their pay and working conditions because they are in a subordinate and dependent position.
Whilst the decision as to the employment status of any individual turns on the specific circumstances, this case is a good reminder that requiring control over the individuals who are working for you may be a key factor in determining whether they are workers or employees. It is natural that in many organisations there is a need, or there are sound business reasons, to have control over the individuals who are providing services. This could, for example, be required, to ensure service standards, for health and safety reasons, or to protect business connections. However, the more control that an organisation operates over the individuals who are providing services, the greater the risk that those individuals will be classified as workers or employees, which may mean that they qualify for protection and benefits that were not originally envisaged between the parties.
The case also serves as a reminder that a well drafted contract is, in itself, not the sole solution to these issues, as a court will focus on the reality of the relationship in assessing employment status. It is possible that, despite the contrary agreement of the parties, the individual should be classed as a worker or an employee for statutory or tax purposes.
We would recommend that all organisations review their self-employed consultancy arrangements on a regular basis to ensure they have correctly classified the individual’s status. It is important to assess the nature of the relationship accurately prior to the start of any contract, but if those relationships are on-going then a regular review should be diarised. It is entirely possible for a relationship to start out as one of genuine self-employment and to morph into one with more control as it develops over time.
If you do require any assistance with properly categorising the individuals who provide services to you then we would be happy to assist and can carry out evaluations on either a group or individual basis as required. We can also help ensure that your contracts actually reflect the nature of the relationship and do not call into the doubt the status of the individuals unnecessarily.