Worker or self-employed?
The Supreme Court has given important guidance on the dividing line between who is a worker and who is self-employed in its judgment ending the long running litigation brought against Uber by a group of its drivers.
The drivers had contended that, although the contractual documentation they had signed with Uber styled them as self-employed, the reality of their relationship with the company was that they were to be properly regarded as workers. The most important effect of this would be that they would be entitled to paid holiday under the Working Time Regulations 1998 and also to the national minimum wage for all hours that they worked, not just while carrying passengers.
The Employment Tribunal agreed with their contentions and that decision has now been upheld by the Supreme Court. The main features of the judgment are:
- Where statutory rights such as paid holiday and minimum wage entitlement are concerned, entitlement is to be decided primarily by reference to the facts as applied to the relevant statutory provision, not the written documentation.
- In considering the application of the statutory provision, regard must be had to its purpose: in this case it was to protect people who have little to no say over the terms on which they work and are in a “subordinate and dependent” relationship with the person with whom they contract.
- The Employment Tribunal’s findings that:
- Uber sets the fare for a journey.
- The contract terms are imposed by Uber and the drivers cannot negotiate them.
- As soon as a driver logs on to the app, Uber imposes effective controls over accepting customer requests (with a system of penalties for refusals) and dictates routes and communications between drivers and passengers.
These findings led the Tribunal to the correct conclusion that the drivers were working under contracts for services with Uber and rejected Uber’s argument that it was simply an intermediary that enabled drivers to contract directly with passengers.
- The drivers were therefore to be regarded as “workers” for the purposes of entitlement to paid holiday under the Working Time Regulations.
- All time, from logging on to logging off the Uber app, was working time, not just time when carrying passengers and so would be subject to the national minimum wage.
The case does, to a large extent, turn on its own facts and the elements of control by Uber over the drivers were key to its decision. Those may not necessarily be present in other gig economy operations. What the decision does make clear, however, is that:
- Entitlement to statutory employment rights will be governed primarily by what happens in practice as between the individual and the organisation, not any written documentation.
- Control over the way in which the work is carried out and the reality of any apparent freedoms for the individual will be key in deciding whether s/he is self-employed or, in realty, a worker.
At Abbiss Cadres, our Employment Team can assist with reviewing employment and business models, evaluating risk as to individual’s status, and advising on structures to cost and mitigate those risks. For more information on how we can help, please get in touch.