The London Central Employment Tribunal has held that two drivers engaged by gig economy stalwart Uber are not self- employed contractors but workers. This means that these two drivers are entitled to:

• 5.6 week’s paid annual leave each year
• A maximum 48 hour average working week (unless they opt out) and rest breaks
• The National Minimum Wage and national living wage
• Protection of the whistleblowing legislation.

As they are not employees then they will not be entitled to:

• The ability to claim unfair dismissal
• The right to statutory redundancy payments.
• The protection of TUPE
• Benefit of the implied term of trust and confidence

The Tribunal’s judgment sets out a scathing critique of Uber’s submissions that it is a technology platform as opposed to a transport provider and that its drivers are self-employed contractors offering their services to passengers via the Uber app. In the Tribunal’s view, any driver who has the app switched on, is within the territory in which he or she is authorised to work, and is able and willing to accept assignments is – for so long as those conditions are satisfied – working for Uber under a worker contract.

The Tribunal highlighted that Uber runs an enterprise whose central function is the carrying of people in cars from one point to another and that it operates in part through a company that is regulated as a private hire vehicle operator, but that it resorts in its documentation to ‘fictions’, such as fake invoices that it generates on behalf of its drivers but that are never sent to passengers, and ‘twisted language’ in its contracts with drivers. The Tribunal considered that the ‘remarkable lengths’ to which Uber had gone to compel agreement with its legal analysis merited ‘a degree of scepticism’. Moreover, the Tribunal noted that in other correspondence, for example in submissions to the Greater London Authority Transport Scrutiny Committee, Uber had boasted of providing job opportunities and potentially generating tens of thousands of jobs in the UK, and paying its drivers on a commission basis. The Tribunal also agreed with the findings of the North California District Court, in a similar case brought by Uber drivers in California, that ‘Uber does not simply sell software; it sells rides.’

In the Tribunal’s view, the case put forward by Uber did not correspond with the practical reality. The notion that Uber in London was a mosaic of 30,000 small businesses linked by a common platform was ‘faintly ridiculous’. Save for a few individuals who operate more than one vehicle on their Uber account, each such business consisted of an individual with a car seeking to make a living by driving it.

The Tribunal concluded that the drivers were workers in the instant case and that the guidance in the principal authorities favoured its view, rather than that put forward by Uber. It considered that the problem stemmed from the unequal bargaining positions of the parties, noting that many Uber drivers do not have English as a first language and will not be accustomed to interpreting ‘dense legal documents couched in impenetrable prose’, which the Tribunal considered simply misrepresented the true rights and obligations on both sides. However, the Tribunal noted that nothing in its reasoning should be taken as doubting that Uber could have devised a business model that did not involve it employing drivers; it was simply that Uber’s chosen model failed to achieve that aim.

Uber has confirmed that it is appealing the decision and this could mean that the case is appealed up to the Supreme Court. But what does this mean?

1. Any Uber driver could bring a Tribunal claim on the assumption they are a worker and ask for the hearing to be stayed pending any appeals.
2. Although the decision is fact specific and based on Uber’s business model it could increase the chance of other gig economy companies facing claims that their contractors have worker status. Cycle couriers are making similar claims against firms including CitySprint, Addison Lee, eCourier and Excel. Law firms are also talking to workers at Deliveroo, which delivers meals by cycle and motorbike.
3. A Department for Business spokesperson said: “We are keen to ensure our employment rules keep up to date to reflect new ways of working and that’s why the government has asked Matthew Taylor to conduct an independent review into modern working practices.”

If you engage contractors and want to discuss their employment status then feel free to contact us.