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‘Gig economy’— Aslam and others v Uber B. V.

November 2016

Just before publication of this newsletter, the Tribunal gave judgment on the 28 October 2016 in the claim against Uber by several of its drivers. It decided that Uber’s drivers are ‘workers’ within the definition of the Employment Rights Act 1996.

 

 

Facts and Background

Workers in the ’gig economy’ have very few rights under employment law as they have in the past not been seen to be ‘workers’ or ‘employees’. Uber operates a business model that relies upon these short-term engagements and claims that those driving for them are not employees or workers.

Uber is a company that allows users, through its app, to submit a request for a lift which Uber then forwards to its nearest driver who then picks them up and transports them. The company automatically calculate the fare and transfers it from the passenger to the driver. Uber claims that its drivers should be classed as self-employed rather than employed, pointing to the fact that they drive their own cars and the money goes from the passenger’s account straight into the driver’s. They argue that they are merely facilitating the service through their app. Indeed, one Uber driver on Victoria Derbyshire’s show said not only did he feel he was self-employed, he felt that he was, if anything, “employing Uber” to bring him customers. Uber argued that each driver enters into a contract with the passenger for each journey they deliver.

However, Uber’s model has increasingly come under scrutiny, and so with the support of their union, the GMB, some Uber drivers sought to argue that they were entitled to statuory protection as workers”. Uber continued to argue they were self-employed. Counsel for the Claimants in this case argued that they were employed by Uber. Counsel pointed to the following as examples of the way in which Uber engaged these drivers as ‘workers’ under the Employment Rights Act 1996:

The interviews that Uber drivers must do even if it is called “onboarding”;

Also, the GMB found last year that an Uber driver received, on average, £5.03 per hour, after costs and fees were taken into account; well below the new National Living Wage rate of £7.20. However, this too is debated, with a free market think tank, the Adam Smith Institute, claiming that Uber drivers earn around £12 an hour even after expenses. However, this was not an issue that the Tribunal was attempting to deal with in this case.

Judgment

This judgment was highly anticipated with media outlets widely covering the events. The judgment handed down by Employment Judge A M Snelson concluded that Uber drivers came under the definition of ’workers’ in the Employment Rights Act 1996. The decision that was handed down on the 28 October 2016 was particularly scathing of Uber’s arguments that its drivers were self-employed. Indeed, the Employment Judge went so far as to summarise the evidence of Uber’s counsel with the famous line “The lady doth protest too much, methinks” (Hamlet, Act III, scene 2). The Employment Judge dismissed the argument that, for each journey undertaken, the passenger and driver entered a contract between them as patently absurd, as they did not even know the identity of the other and Uber sets the price and route.

The Tribunal concluded that S.230(3)(b) ERA was fully applicable. It stated that Uber could have devised a business model that did not make these drivers ‘workers’, it had just failed to do so.

What this might mean for employers

In practice this means that Uber drivers will have some additional protections, but not to the extent of those defined as ’employees’. This means that Uber drivers will be entitled to:

The National Living Wage and National Minimum Wage from Uber;

But as they are not being defined as ‘employees’ they are not entitled to several other protections, such as TUPE protection, the right to a statutory redundancy payment, and the ability to claim unfair dismissal.

For those employers whose business model is similar to Uber’s, this decision will be worrying and will lead to a reexamination of practices. Whilst this decision is limited to this case, and based upon the facts of this case alone, it suggests that UK courts will grant these workers at companies similar to Uber the same protections. In particular, companies such as Deliveroo that operate on very similar business models will find themselves most at risk.

Ultimately though, even before the judgment was handed down both sides in this case had said they would appeal the decision if it went against them. Whilst the Employment Tribunal might have decided that these drivers should be defined as ‘workers’ this case will almost certainly be appealed to the Employment Appeals Tribunal by Uber. So it is a case that is well worth keeping an eye on, especially with the newly launched inquiry into the ‘gig economy’ and atypical workers.

 

Matthew Cole

Employment Partner

e mcole@prettys.co.uk

t 01473 298221

 

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