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In February, The Supreme Court delivered its long-awaited decision on whether Uber drivers are workers or self-employed contractors.

By Natasha Smith, Senior Associate

In February, The Supreme Court delivered its long-awaited decision on whether Uber drivers are workers or self-employed contractors (Aslam and others v Uber BV and others). The case was originally brought by 25 individual claimants in 2016 and has been through the Employment Tribunal, the Employment Appeals Tribunal, the Court of Appeal and finally the Supreme Court (the highest court in the UK).

Each of the previous courts found the drivers were workers on the basis that Uber exerted a high degree of control over the drivers. Uber appealed to the Supreme Court and in this landmark decision, the Supreme Court agreed that Uber drivers were in fact workers and they were not self-employed.

Whilst this case does not go as far as classing its drivers as employees, granting worker status to the Uber drivers means that they are entitled to certain rights such as the right to be paid national minimum wage and paid annual leave – which they would not get if they were self-employed.

The outcome of this decision therefore has huge implications for Uber (which has around 60,000 drivers working for it across the UK) as well as a number of other employers whose business model is based on the ‘gig’ economy i.e. where staff are paid in respect of each job/delivery they perform.

The Supreme Court reached this decision based on the following five key factors:

1. Uber sets the fare price and drivers are not able to charge more than the fare calculated by the Uber app.

2. Uber imposes the contracts and terms of service in place with customers, which drivers have no control over.

3. Once a driver has logged onto the Uber app, their choice or freedom to ‘accept’ jobs is restricted by Uber monitoring acceptance rates and imposing ‘penalties’ if too many trips are declined.

4. Uber exercises significant control over the way drivers deliver their services, using a passenger rating system which impacts whether drivers continue working for Uber.

5. Uber restricts direct communication between driver and passenger and prevents any relationship forming to extend beyond an individual ride.

The case has been referred back to the Employment Tribunal to determine the level of compensation to be awarded to the 25 drivers who successfully pursued the claims, however their lawyers expect it to be in the region of £12,000 each.

Uber has indicated it will argue that this decision only applies to a small group of drivers and is not intended to be a ‘one size fits all’ decision applicable to the whole company, particularly, as they say they have made changes to the way in which the driver app works since 2016.

However, given the length of time that it has taken to get to this point, and the size of this organisation, clearly this is going to take a great deal of time to resolve and it remains to be seen how many other claims may be bought if Uber refuses to accept its drivers’ positions on their status.

Given the explosion of the ‘gig economy’ over the last decade and clear shift in the modern job market, decisions being made in such high profile cases such as this one, will no doubt force other companies to carefully consider the way in which they operate.

Whilst the Uber decision is based on the particular facts of that case, large companies such as Deliveroo and Addison Lee, which are believed to operate on a similar basis to Uber, will perhaps be in the process of reviewing their own business models in an attempt to reduce the risk of defending costly and lengthy litigation.

If you would like to discuss any of the above issues or any other employment matter, please do not hesitate to contact Joseph Oates on email: jmo@cooperburnett.com or Natasha Smith on email: nes@cooperburnett.com or tel: 01892 515022.

 This blog is not intended as legal advice that can be relied upon and CooperBurnett does not accept any responsibility for the accuracy of its contents.

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March 10, 2021
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