The Uber case - what now?
Last month the Supreme Court unanimously upheld the employment tribunal decision that a group of 35 Uber drivers were workers for the Employment Rights Act 1996, the Working Time Regulations 1998, and the National Minimum Wage Act 1998. The court also confirmed that the drivers’ working time includes any period when they are logged in to the Uber app within the territory in which they are licensed to operate and ready and willing to accept trips.
Uber has said that all its drivers will now get at least the legal minimum wage, after expenses and holiday time at 12.07% of earnings, paid out fortnightly. It will also automatically enrol them in a company pension plan with contributions from Uber alongside their own. The Independent Workers Union of Great Britain is calling on HMRC to ensure that drivers receive a minimum rate of pay from the moment they log onto the app, not only when they are carrying out trips.
Why did the drivers win? What does it mean for your business? What should you do now?
1 The drivers’ remuneration was fixed by Uber and the drivers were not permitted to charge more than the fare calculated by the Uber app.
2 The contractual terms on which drivers performed their services were dictated by Uber
3 Once logged in to the app, drivers' choice about whether to accept requests for rides was constrained by Uber.
4 Uber monitored the drivers' rate of acceptance and cancellation of trips. It imposed penalties where the cancellation rate exceeded a certain level by logging the driver off the app for a specified period.
5 Uber vetted the type of car that could be used. It also owned the technology integral to the service and imposed a driver rating system to manage performance.
6 Uber restricted communication between passenger and driver to the minimum necessary to perform the trip.
What does it mean for your business?
In Uber, the Supreme Court said the purpose of the relevant legislation was to protect vulnerable people who were subordinate to, and dependent on another person who controlled their work. The greater the degree of control, the more likely it was that the individual was a worker.
When assessing your arrangements with your service providers, courts and tribunals won't just look beyond the contractual wording when deciding whether an individual is a worker or self-employed, they may ignore it altogether. So, if you use a complicated arrangement to disguise the true nature of a working relationship, you will fail.
This case sets a precedent for how tribunals will decide future cases regarding employment status.
What should you do now?
Audit your arrangements with your contractors in light of this judgment to determine your exposure to worker status claims
Decide whether you need sufficient control over those delivering services for you so that it is a subordinate relationship? If you do, they will get employment protection. If you don't want them to have that protection, you can't have that control.
Ensure that your written agreement reflects the arrangement.