After a landmark ruling which saw Uber drivers formally recognised as workers as opposed to self-employed individuals, the company have now given their staff key employment rights.

Last month, a UK Supreme Court ruling declared that drivers working for the ride-hailing app Uber were to be recognised as workers rather than self-employed.

This entitled the drivers to rights that they had previously not been eligible for including minimum wage, holiday pay and rest breaks.

Due to this, Uber has now acted, stating drivers would now earn at least the National Living Wage which is currently set at £8.72 an hour but is set to rise to £8.91 in April.

The company further outlined that all drivers will be paid holiday time based on 12.07 per cent of their earnings which will be paid out every two weeks. Other measures include automatic enrollment into a pension plan and free insurance in case of sickness and injury.

This change in status for employees is likely to have a large effect on the gig economy overall.

Rebecca Thornley-Gibson, partner at DMH Stallard, suggests that this could have a rippling effect regarding employment status in the wider gig economy:

Following last month’s Supreme Court ruling that their drivers are workers and entitled to these remuneration components, Uber were left with no choice but to meet their legal obligations.

The gig economy continues to face challenges on how to treat individuals who earn their living from it.

Non-traditional working structures do not always result in an abdication of employment rights and it is likely we’ll see further extension of employment rights to more individuals, as the ’employee/worker/self employed’ status issues continue to be brought to the courts for determination.

Ms. Thornley-Gibson further reflected on what more Uber still needs to address:

What Uber have not yet announced is how they will deal with past failures to make these payments and when drivers will receive these monies.  As that will be a significant cost to Uber and involve complex calculations, those fighting on behalf on the drivers will continue to be involved in discussions that should result in settling historic underpayments.

Barry Stanton, Partner and Head of Employment at Boyes Turner, also noted a major discrepancy in the rights offered to Uber drivers:

Whilst many unions have welcomed Uber’s decision overall they have noted the divergence from the Supreme Court decision, with the decision only to pay whilst driving, rather than when logged on to the App, which is at odds with earlier decisions on working time.

Mr. Stanton continued:

The Uber case has a number of implications for the gig economy as a whole. Courts and Tribunals will not be bound by the words of a contract. Wording in contracts that attempts to exclude employment or worker status will not be determinative.

Courts and Tribunals will be able to undertake the statutory exercise of interpreting whether someone is an employee or worker. For those seeking to avoid creating worker status it will be important to pay very careful attention to the reality of the situation when setting up a new operational model.

For a business wishing to operate at scale and reliably the notion of a true “gig” economy is at odds with the level of control that is required to make a model sustainable.  The Uber decision therefore has very serious implications for the costs associated with running that type of business.