In the case of Uber BV and Others v Aslam and Others, the drivers argued that they provide services for Uber as ‘workers’. Uber disagreed and claimed it is technology service provider acting as an agent for drivers in their business relationship with passengers.
In the eagerly awaited judgment last month, the Supreme Court unanimously held that Uber drivers should be classed as ‘workers’. 70,000 Uber drivers are therefore entitled to worker rights including paid holiday, rest breaks and the National Minimum Wage.
There were five key aspects of the relationship between the drivers and Uber which were significant in the landmark ruling:
- Remuneration is set by Uber for each ride the drivers carry out. The drivers are not permitted to set their own prices.
- Uber sets the contractual terms and conditions.
- Once drivers log into the Uber app, they can face penalties for cancelling or not accepting rides. This can include preventing them from working.
- Uber has significant control over the way in which drivers operate. They are subject to a rating system whereby if their rating falls below a certain level, they face penalties or termination of their contract.
- Uber prevents drivers and passengers from communicating outside of the Uber app and limits communication to that necessary to perform the trip.
The decision means Uber workers cannot earn less than the National Minimum Wage which is rising to £8.91 per hour in April 2021 once they have accepted a ‘ride request’. Uber workers will automatically receive a holiday pay top-up of 12.07% per fortnight, equivalent to 28 days of paid holiday annually, the legal minimum entitlement.
Uber workers will also benefit from auto enrolment into a company pension plan with the drivers contributing 5% and Uber making a 3% contribution. The pension contributions will start to be paid from Wednesday 17 March 2021. Uber workers will continue to choose the hours they work. The UK will be the first country in the world where Uber will implement this model and they have insisted that their fares will not rise as a result of these changes.
The workplace benefits come on top of the insurance cover that Uber introduced in 2018 that covers sickness, injury and parental leave. Uber has also stated it will set up a process for drivers to seek compensation for back-dated holiday pay and lost earnings, without the need to go through the employment tribunal.
The ruling is likely to have a significant impact on the gig economy. It is a welcomed reminder for all businesses to review arrangements where staff are labelled as self-employed in contractual documentation but in reality, they are operating and being treated as workers or employees. The Uber decision has made very clear that the tribunal will look beyond the written terms and consider the relationship in practice and the conduct of the parties and decide each case on its own facts.
For more information on employment rights or to discuss the Uber ruling in further detail, please contact our employment team via email or directly on 020 8858 6971.