Employment Status

09 November 2016

The line between employees, workers and the ‘genuinely’ self-employed has come under increased scrutiny in recent weeks - and not just because of the much publicised Uber decision

Aslam and others v Uber

The line between employees, workers and the ‘genuinely’ self-employed has come under increased scrutiny in recent weeks - and not just because of the much publicised Uber decision. Last month, the Government announced a wide-ranging review by Matthew Taylor, the Chief Executive of the Royal Society of the Arts, into the changing world of work. This month has seen the announcement of an inquiry to be conducted by the Commons Select Committee on Business, Energy and Industrial Strategy. This will focus on the status and rights of agency workers, the self-employed, and those working in the 'gig economy'.

Together with the increased public scrutiny of employers using zero-hours contracts, it does feel as though there is a weight of opinion that the current balance of rights leave some individuals in too precarious a position and vulnerable to exploitation. Whether the Government can come up with a new way of categorising the work of individuals to provide increased security, without jeapordising the flexibility that can encourage innovation and growth, may be the most important employment law question for the future – perhaps even more important than what happens after Brexit.

Under UK law, employment rights are given only to those who qualify either as ‘employees’ or as ‘workers’. Employees work under a contract of employment and have full employment rights, including the right not to be unfairly dismissed. Workers, on the other hand, may still be self-employed for tax purposes and be completely flexible in how much work they choose to do, but nevertheless qualify for a number of rights, including the right to be paid the minimum wage and rights arising under the Working Time Regulations – including paid annual leave.

In Aslam and others v Uber, a number of Uber drivers are claiming that they count as workers and are bringing minimum wage and working time claims. To be workers they must show that they are engaged under a contract to work for Uber and that Uber cannot be described as merely a client or customer of the driver’s business.

At a preliminary hearing of the case an Employment Tribunal has now ruled that Uber drivers are indeed workers, with the result that their claims can go ahead. Uber had strenuously argued that all they did was provide a trading platform that put customers in contact with a number of drivers. They claimed that the drivers were working directly for the customer and were not doing work for Uber at all. The Tribunal rejected this argument. The reality of the situation was that Uber was not just a software company providing a trading platform; it was in the business of providing transportation to customers and marketed itself as such. Uber was concerned with providing a high quality service and was careful to select drivers who met their requirements. While drivers were free to choose when and for how long they worked, they were encouraged to accept potential rides when they were logged in to the system, the Uber App gave them a specific route to follow, and specified the fare to charge. Drivers could be penalised for cancelling rides that they had initially accepted and were not given any information about the identity of the customer.

The Tribunal concluded that the drivers could not be said to be running individual businesses. In reality they were working for Uber and qualified as workers. This is a case with huge ramifications for Uber and an appeal is expected. However, it does not mean that every app or website designed to help suppliers contact customers will raise similar issues. The Tribunal’s decision is based very much on the particular arrangements made between Uber and its drivers. The case does, however, show that a tribunal will look beyond the phraseology of a contract and a reach a conclusion about what it feels is the reality of the relationship.

Request a callback