A ruling has decided that Uber drivers were in fact workers and not self-employed individuals. This decision is key and could mean that many more ‘self-employed’ drivers could benefit from rights such as holiday pay, paid rest breaks and the national minimum wage.
Uber offers its users the ability to arrange transportation all through the use of an app. The user simply types in their desired destination and a driver is sent for collection. Uber engages a significant number of drivers in the UK to carry out this service on its behalf. In this case concerning two of its drivers, Uber argued that its drivers were self-employed meaning that they should not benefit from the rights afforded to employees or workers. The London Employment Tribunal disagreed and ruled that the two drivers should be classed as ‘workers’.
In practice, it can sometimes be difficult to identify the correct employment status of an individual. Broadly speaking, there are 3 different categories of workers:
Employees benefit from all rights under employment legislation, including the right not to be terminated unfairly, holiday pay, rest breaks and national minimum wage. At the other end of the spectrum, self-employed individuals do not have comparable rights but are afforded the freedom to carry out work with greater flexibility and without the control of an employer. Workers are somewhere in the middle; whilst they do not benefit from all employment rights, they are entitled to rights such as holiday pay, rest breaks and national minimum wage.
The test for employment status has developed over time and can broadly be determined by asking the following questions:
• Was there mutuality of obligation? In an employment relationship, an employer is expected to provide work to the employee and the employee is required to undertake the work when offered. The employee cannot choose not to turn up to work without facing disciplinary sanction.
• Did the individual undertake to personally perform work or services? An employee would not be given the ability to send a substitute to perform their work.
• Was there significant control exercised by the employer? In an employment relationship, the employer has significant say in the manner in which work is performed. On the other hand, self-employed individuals have greater flexibility when performing their services and would usually provide their own tools and materials to carry out the job.
Individuals that do not meet all of the criteria relevant to an employee, may be deemed to be a ‘worker’.
Last week’s decision is not only monumental for Uber drivers, but also drivers that work for similar transportation companies. It is understood that Uber will be appealing against the ruling.
If you wish to know how this ruling may affect you, then please do contact our Employment Team on 01908 660966 or fill out our online form.