Uber has lost a crucial legal battle in its attempt to hold onto its London licence in the UK after a tribunal upheld a ruling that the ride-hailing app must treat its drivers as “workers” with minimum wage rights rather than as self-employed.
The landmark Employment Appeal Tribunal (EAT) ruling could have major ramifications for working rights in Britain’s growing gig economy.
In October 2016, a tribunal ruled that two Uber drivers, James Farrar and Yaseen Aslam, backed by the the GMB union, were Uber staff and entitled to holiday pay, paid rest breaks and the minimum wage.
Uber challenged the ruling arguing that its drivers were self epmployed, but today, the employment appeal tribunal upheld the original decision.
Thas said it would launch a further appeal against the latest ruling, claiming that 80% of its drivers would rather be classed as self employed.
Maria Ludkin, GMB legal director, said:
“This landmark decision is a yet more vindication of GMB’s campaign to ensure drivers are given the rights they are entitled to – and that the public, drivers and passengers are kept safe.”
“Uber must now face up to its responsibilities and give its workers the rights to which they are entitled.
Any judgment applies to all the estimated 50,000 people across the UK who drive for Uber, with up to 40,000 of those drivers being London based.
There are two further possible stages in the appeal process – the Court of Appeal and the Supreme Court.
Alan Price from Peninsula comments:
Uber were appealing the previous employment tribunal decision that their drivers were workers, rather than self-employed contractors. At the EAT, the company argued they acted as the driver’s agent by referring passengers to the driver through the app and receiving a payment for this, rather than being a “gig economy” employer.
The EAT has held that the tribunal was entitled to look beyond the contractual documents to find, in reality, drivers were incorporated in to the business and were significantly controlled by Uber when carrying out work. The tribunal had correctly decided that the reality of the situation was that Uber drivers were workers.
For Uber’s estimated 40,000 drivers in the UK, this is another positive sign that their true employment status is that of a ‘worker’ and, as such, they should be entitled to worker rights. They will have the right to seek minimum wage, paid holiday, working time rights and minimum rest breaks from Uber, with the financial implications of future rights and back pay claims falling on the business.
The decision is also a further indication to “gig economy” employers and companies with similar business models that they may need to reassess their treatment of their staff to ensure they are giving the correct rights. Since employment tribunal fees have been abolished, there is no deterrent for individuals to challenge their given status. Numerous tribunal claims are currently being brought against companies, including Deliveroo and The Doctors Laboratory, from individuals seeking confirmation of their employment status.
This will not be the end of the Uber case. It is highly likely Uber will continue to appeal the decision and, during the EAT hearing, there was even a suggestion that they could leapfrog the Court of Appeal and take their case directly to the Supreme Court. A number of other companies are also facing appeals in the coming months, with CitySprint in the EAT at the end of November and Pimlico Plumbers appealing the decision that a plumber was a worker at the Supreme Court in early 2018.
Imogen Reseigh, Senior Associate in the Employment department at Trowers & Hamlins LLP added:
“The decision in Uber reinforces that the use of apps and technology to facilitate new ways of working cannot be used to avoid honouring workers’ rights.
This decision was not unexpected following the growing number of cases where Tribunals have concluded individuals were workers and not independent contractors. It’s unlikely to be the end of the story, however, given other “gig economy” cases will soon reach the higher courts and Uber is likely to appeal.
In the meantime there may be pressure on the Government to focus on the Taylor Review of Modern Working Practice’s recommendation of creating “dependent contractors” who are eligible for worker’s rights.”