Why the Uber tribunal judgment is important for ‘gig economy’ employers
Organisations need to check their own arrangements for potential claims
The recent judgment in the employment tribunal case Aslam v Uber could have significant ramifications for many organisations endeavouring to operate in the ‘gig economy’. An employment tribunal has held that drivers engaged by Uber were not self-employed contractors, but fell squarely within the legal definition of ‘worker’ under of the Employment Rights Act 1996 and equivalent definitions in the Working Time Regulations 1998 and the National Minimum Wage Act 1998. Any organisation engaging people in similar ways may be the next employer to face similar claims.
The key basis for the current disagreement was that the organisation said that it was the taxi passengers who contracted with the drivers and that it did not control when and how the drivers worked. Accordingly the drivers did not work for Uber and were not entitled to ‘worker’ rights. The drivers contended that they were workers undertaking personally to do work for Uber.
An individual’s employment status is important because certain employment rights only apply to employees, such as the right not to be unfairly dismissed and the right to a redundancy payment. Increasingly, however, employment rights are being granted to ‘workers’, including paid holidays and entitlement to the national minimum wage. Those engaged on a self-employed contractor basis are not entitled to any employment rights.
The tribunal determined the drivers were workers, with the result that they were legally entitled to the minimum wage, paid holidays, and whistleblower protection. The tribunal expressly stated that it could be possible for an organisation to operate in the way that this organisation contended, so that the drivers were not workers. However, when the tribunal analysed the detail of the company’s operation, statements and systems, it decided these drivers were workers.
Many will be familiar with the way the taxi app operates. The fact that the drivers did not know their passenger’s identity, picked them up to take them to an initially unknown destination, and received payment at a fee calculated by and paid to Uber, all showed that there was no genuine contract between the driver and the passenger.
The tribunal was particularly unimpressed with the lengths the company went to in its documents to suggest there was no working engagement and that it just gave drivers business opportunities, when in simple terms the company runs a transportation business and the drivers worked for them. Using the terminology of ‘rider experience’, preserving the integrity of the platform, log-off penalties and deactivation, did not impress the tribunal and in its view did not stop the drivers from being the company’s workers (particularly when the respective bargaining power of the organisation and the drivers was taken into account).
This judgment is a warning to any organisation that engages people as contractors on the assumption they will have no worker rights. Clever use of terminology and good documents can help define the way an organisation engages individuals, but these will not be definitive. Tribunals will take a careful look at the reality of the entire relationship when determining if the person engaged is really a worker or, indeed, an employee.
As the modern world of working relationships evolves, there may be ways of operating that do not involve those who are providing a service being workers or employees. However, someone who is actually a worker but who has not been considered as such, may have claims for annual leave, the minimum wage, detriment for whistleblowing or even pension contributions that their employer has not taken into account.
With the recent emergence of a new HMRC task force looking at employment status and taxation, coupled with the publicity around this case, it is important organisations ensure they correctly categorise those who work for them, to avoid expensive risks.
This is only a tribunal judgment so does not set a legal precedent. However, it was a case argued by leading barristers for an organisation and a trade union at the forefront of the worker-status argument. The company has confirmed it intends to appeal against the judgment, so this is a long way from being the end of the story.
Story via – http://www2.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2016/11/03/why-the-uber-tribunal-judgment-is-important-for-gig-economy-employers.aspx