Decision brings long-running case on key aspects of workers status to an end
Almost since it started operating in the UK, the Uber taxi-hailing app has drawn questions about the employment status of the drivers who provide their services via the app. Uber has always maintained that it is merely a technology platform designed to connect self-employed drivers to customers. However, questions have arisen as to the accuracy of this position given how the drivers operate and are controlled by Uber when engaged to provide their services via the app.
Worker status continues to be a very fact-specific area of employment case law. Recent cases have examined contractual relationships from delivery services to referees and professional athletes. The three categories of relationship are independent contractor, worker and employee – see our article covering the distinctions on these roles (available from our website news page here) for more information.
Employers may wittingly or unwittingly mislabel a worker as a self-employed contractor. In turn, individuals may argue that they are in fact workers because worker status brings rights to paid holiday, rest breaks, and the National Minimum Wage, amongst other things. An employee has additional rights, for example in relation to unfair dismissal.
In the case of Uber, a group of drivers brought claims in the employment tribunal arguing that they were engaged by Uber as workers whilst they provided taxi services via the Uber app. To benefit from the associated rights, the drivers would need to establish that they were workers for the purpose of the Employment Rights Act 1996 (ERA), the Working Time Regulations 1998 (WTR) and the National Minimum Wage Act 1998 (NMWA). Uber argued that drivers engaged via the app did not meet the definition of a worker within the meaning of the ERA and equivalent provisions in the WTR and NMWA. Uber's argument was that the drivers entered the contract in business for themselves and could not be workers.
However, when the case came before an employment tribunal, it determined that when it looked past the contractual relationship at the reality of the relationship between the drivers and Uber, the drivers were not self-employed. Pointing to numerous factors, including that Uber controlled the drivers' levels of pay, communication with customers, and whether or not they could continue to operate under the app, the tribunal concluded that the relationship was that of a worker and employer and that the individual driver's claims should be allowed to proceed.
The EAT and Court of Appeal both denied Uber's appeals before Uber finally appealed to the Supreme Court.
The Supreme Court unanimously dismissed the appeal and therefore upheld the decision that Uber drivers are workers for the purposes of ERA, WTR and NMWA. In its decision, the court pointed out that it was critical to understand the rights being asserted by the claimants in this case were not contractual rights, but rights created by legislation. Therefore, the court upheld the employment tribunal's approach which was to determine whether or not the drivers were workers within the statutory interpretation rather than to determine their relationship via the contractual documents in place between the drivers and Uber.
Going further, the court noted that when interpreting statutory provisions, the requirement was to give effect to the purpose of the legislation, which is ultimately to protect individuals who have little or no say over their pay and working conditions because they are subordinate to an employer exercising control over their work and are therefore vulnerable to abuse.
The court emphasised several aspects of the employment tribunal's findings which justified the conclusion that the claimants were working for Uber:
- Where a ride is booked through the app, it is Uber that sets the fare and drivers are not permitted to charge more – it was therefore Uber who dictated how much drivers were paid for the work they do;
- The contract terms on which drivers performed their services are imposed by Uber and drivers have no say in them - this did not indicate that the drivers were in business for themselves as otherwise they would be able to negotiate terms;
- When a driver had logged into the app, the driver's choice about whether to accept jobs was controlled by Uber. The court and tribunal had highlighted one way that this was done was via monitoring the driver's rate of acceptance and cancellation of jobs and imposing what was, in effect, a penalty if too many trip requests were declined or cancelled;
- Uber exercises significant control over the way in which drivers deliver their services, such as by the use of a rating system that may lead to warnings and even termination of the driver. In effect, this gave Uber rights to impose disciplinary sanctions on the drivers; and
- Uber restricted communications between passengers and the driver to the absolute minimum required to perform a particular ride and took steps to prevent drivers from establishing any relationship with a passenger which could exist beyond an individual ride. This further undermined opportunities for drivers to operate as an independent business and the argument that the driver entered into a separate contract with each passenger.
The court noted that drivers were therefore in a position of subordination and depended on the app and Uber to the extent that they had little or no ability to improve their economic position through professional or entrepreneurial skills. In practice, this meant the only way they could increase their earnings was by working longer hours while constantly meeting all of the various measures Uber put in place to review their performance.
Another key decision from the court was that it upheld the tribunal's conclusion that drivers were working for Uber for all of the time in which they were actually logged into the Uber app within the territory in which the driver was licenced to operate and that they were ready and willing to accept jobs. This constituted "working time" for the purpose of the WTR and "unmeasured work" for the purpose of the National Minimum Wage.
The decision of the Supreme Court to deny Uber's appeal has settled one of the longest-running and possibly most consequential employment law cases of modern times. Several key principles used to determine worker status have now been clarified by the Supreme Court which may prove useful to workers and employers alike in assessing their employment relationships.
Of primary importance is the clear assertion that the first obligation on courts and tribunals in cases such as these is to consider the employment status of an individual within the meaning of legislation based on the actual working relationship between the parties. Although the written contractual terms set out between the parties remain important, courts and tribunals have significant discretion to ignore or disapply terms and conditions stated in contractual documents if they find that these do not represent the reality of the working relationship or the intentions of the parties.
Although the decision of the court in this case carries significance, it has ultimately underlined the widely understood point that worker status cases will ultimately turn on the facts of their case. This has already been well established, even within seemingly similar industries where individuals have been found to be independent contractors or workers within parcel and food delivery courier services.
As for the impact on Uber, the company has claimed that the decision only impacts on a small group of drivers it engaged prior to 2016, which may yet be disputed by drivers who joined the platform since.
Originally Published by Wrigleys Solicitors, February 2021
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