“Uber and Out”

“Gig Economy” – Self employed or worker?

With minds focussed on getting through home-schooling, vaccines and the long-hoped-for holiday, it would have been easy to miss the BIG NEWS in the employment law world.

Uber drivers have – definitively – been deemed workers and not self-employed.

After several years going through the various appeal courts, the Supreme Court has, at last, come to this view.

What did the Court decide?

The Supreme Court did not accept that the contract was made between driver and passenger (in contrast to mini-cab or black-cab rides), or that it was acting merely as a platform-based booking agent for the driver.

Rather, the Court found the contract is between the passenger and Uber, which then engages drivers to carry out the bookings.  The reasoning was that Uber exerts significant control over a number of aspects such as: prices for rides; whether the driver can accept or decline rides once they have logged on; the five-star ratings system; and preventing the driver from getting further rides with the passenger.

The consequence is that the Uber drivers are not deemed to be genuinely self-employed operating their own separate business.  Hence their `worker’ status.

What’s more, the Court found that their `working time’ is not limited to when they are driving passengers to their destinations, but includes any period when the driver is logged into the Uber app.

What does being a `worker’ mean?

Workers have a strange intermediate status.  They are not full employees, so are not entitled to full employment rights such as redundancy pay or unfair dismissal protection.

But they are entitled to the minimum wage and holiday pay.  They also receive employer pension contributions, statutory sick pay and statutory maternity pay, assuming they meet the qualifying conditions. Nice.

For companies, having workers can cost quite a lot more in holiday pay, national insurance and pension contributions. There is also a fair bit more paperwork such as PAYE.

What’s the significance?

More and more people work in the so-called “Gig” economy, of which Uber drivers are but one example.  Some of these people are genuinely self-employed, but for many others, it’s less clear. This time, and to Uber’s cost, the courts found one way.

What about delivery drivers and couriers?

In many ways, the Supreme Court’s decision is not surprising.  In the last couple of years, there have a string of employment cases that have found delivery drivers and couriers to be workers and not self-employed: Hermes, Addison Lee, Hermes, Excel, City Sprint.

The basic theme running through the cases is that the companies exercise a significant degree of control over the delivery drivers and couriers, such that they can’t be deemed genuinely self-employed.

However, it is not quite the end of the story.  Last year, the High Court found that Deliveroo drivers were indeed self-employed because their contract gave them the right (which was used in practice) to substitute someone else to do the delivery on any one occasion.

So we may yet see some of these companies starting to use a substitution clause to get around worker rights.  Or, who knows, the Deliveroo case may yet be overturned on appeal.

Confused?

A lot of the problem here is that employment law is not geared towards modern gig economy practices: politicians – where are you?

But the wider question for all of us is the tension created by the modern 24-hour service culture at the touch of a smartphone on the one hand; and, on the other, how much we pay and treat the people who service that culture.

(c) Ben Thornber, Thornber HR Law