The HR experts at Croner Taxwise take us through the 5 key points that led to this conclusion below.
The Supreme Court’s ruling upholds that of the lower courts’ as it unanimously dismissed Uber’s appeal. The appeal concerned the employment status of private hire vehicle (PHV) drivers who provide their services through the Uber smartphone application (the Uber app).
The main question raised was whether an Uber driver is a “worker” for the purposes of employment legislation which gives “workers” rights to be paid at least the national minimum wage (NMW), to receive annual paid leave and to benefit from certain other protections.
Five key points
The Supreme Court judgment emphasises five aspects of the findings made by the employment tribunal which justified its conclusion that the claimants were working for and under contracts with Uber. These are:
- Where a ride is booked through the Uber app, it is Uber that sets the fare and drivers are not permitted to charge more than the fare calculated by the Uber app. It is therefore Uber which dictates how much drivers are paid for the work they do.
- The contract terms on which drivers perform their services are imposed by Uber and drivers have no say in them.
- Once a driver has logged onto the Uber app, the driver’s choice about whether to accept requests for rides is constrained by the company (it can, for example, impose what amounts to a penalty if too many trip requests are declined or cancelled by automatically logging the driver off the Uber app for 10minutes).
- Uber also exercises significant control over the way in which drivers deliver their services including by the use of a ratings system whereby passengers are asked to rate the driver after each trip. Any driver who fails to maintain a required average rating will receive a series of warnings and may have their relationship with Uber terminated.
- Uber restricts communications between passenger and driver to the minimum necessary to perform the particular trip and takes active steps to prevent drivers from establishing any relationship with a passenger capable of extending beyond an individual ride.
Implications for employers
This ruling could have significant consequences for both Uber as well as your client if they operate within the gig economy and work on a similar ‘on demand’ basis.
It is imperative that employers correctly categorise those who work for them. Despite what the terms of a contract might say, tribunals have the ability to assess the reality of the situation. If the relationship between the parties does not reflect what is outlined in the contract, tribunals can determine that individuals are a different employment status and are entitled to additional employment rights. This can leave employers liable for claims of holiday pay, the minimum wage, detriment for whistleblowing or even pension contributions.
Soucre: Croner Taxwise